VAT Guide to Value Added Tax - sri lanka inland revenue ...

provision. Automatic payments from accounts, automatic teller machine
transactions, electronic fund transfers etc. too are covered.
Transfer of ownership will cover any transfer.
(c)
The issue, allotment, transfer of ownership, drawing, acceptance or
endorsement of any debt security, being any interest in or right to
be paid money is exempt.
Debt securities include deposits with banks and finance companies and
other financial institutions, transferable certificates of unsecured notes,
promissionary notes, convertible notes, bills of exchange, mortgages and
contributory mortgages, debts, government stocks, treasury bills etc.
(d)
The issue, allotment and transfer of ownership of any equity
security, participatory security is exempt.
Equity security includes company shares, share options and rights
“Participatory Security” means that of an investment jointly undertaken
by more than 5 people or managed by a professional manager Eg. Unit
Trusts, Common Funds.
The activities of the stock exchange are covered under this in relation to
transfer of ownership of quoted shares. The activities of unit trusts and
fund managers of unit trusts are also covered
(e)
(f)
(g)
(h)
Stock Brokers.
Although the issue allotment, transfer of an equity security or a
participatory security is exempt form VAT the services rendered by the
agents of such broking firms are not.
Underwriting
Fees charged by the underwriter is exempt.
Provision of loans, advances and credit is exempted
Any type of a guarantee is not considered under this. Interest on loans
are exempted but penal interest etc. charged on lease rentals is not
exempted.
Hire Purchase
The finance charges in a hire purchases agreement were exempted
under GST but in the VAT Act it is restricted to finance charges in
respect of second hand goods. Please see comments in para 17.2(ii)
71