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

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Penalties Tax payers should comply with the requirements imposed under the VAT Law. Failure to do so will result in the imposition of penalties by the CGIR or fines and terms of imprisonment by a Magistrate. Fines and penalties in respect of some of the offences are given below. Late Registration - fine not exceeding 25000 and/or term of imprisonment not exceeding 6 months by Magistrate Failure to file the return - Penalty not exceeding 50000/- by CGIR or Rs.25,000/- fine and or 6 months imprisonment by Magistrate. Sec. 21(10) Failure to pay tax on due Dates - 10% of unpaid tax plus 2% for each subsequent months up to 100% of the tax Incorrect return - Twice the amount of tax under paid plus Rs. 25000. Non compliance of the * Fine between Rs.25,000/and 250,000/-Sec.20(8) requirements to issue a tax * Should the offence continues after invoice conviction Rs,500/- per each day. Sec.20(8) Issue a tax invoice when not entitled to * Fine Rs.25,000/- and /or six months imprisonment – Sec. 67 For non-displaying of registration * Penalty of Rs.50,000/- - Sec. 15(5) Certificate and non-displaying of exempt supplies Sec. 67 of the Act deals with other penal provisions. 84
Chapter - 15 Accounting Basis & Record Keeping 15.1 Accounting • Invoice Basis Every registered person shall account for VAT on an invoice basis ie output tax must be declared in the taxable period in which an invoice is issued and input tax must be declared in the taxable period in which an invoice is received. • Cash Basis However any person engaged in a taxable activity where it is not possible to collect payments quickly for the supplies made by him (eg. Contractors) can obtain approval from the C.G.I.R under Section 23 to account for tax (VAT) on a cash basis Once the approval is obtained for cash basis reporting such person is required to declare his out put tax when the cash is received and input tax only when the payment is made. • All directions issued by the CGIR under Sec. 23 of the GST Act giving approval for cash basis accounting are valid for VAT. 15.2 Keeping of Records • Registered persons are required to keep and maintain records in respect of the taxable activity carried on by them to enable the officers of the C.G.I.R to ascertain the liability. • The form of the records to be maintained and the particulars to be set forth therein are as prescribed by gazette extra-ordinary 1024/8 of 21.04.1998 for GST purposes. • Records include books of accounts (whether in manual, mechanical or electrical format) recording receipts for payments or income or expenditure and include, all documents that are necessary to verify the entries in such books of accounts, details of any warehouses and stock of goods etc. as are enumerated in Section 64(3) of the Act. 85
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But for the best to the September 0
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Preface The Value Added Tax Act was
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Chapter - 1 Introduction 1.1 Purpos
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However from the point of view of t
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The following test which has been a
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iv. Import of any fabric, yarn, gre
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Chapter - 3 The definitions of conc
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Eg. 1 : If “A” wants to termina
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c. Time of supply in relation to su
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Thus, any trade, business, etc. are
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a business in Sri Lanka and not to
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When the recipient is not a registe
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• There are two types of registra
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(ii) continued without making an ap
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(d) (e) (f) input credit has been c
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4.13 Activity Code Number “Suppli
Page 34 and 35: the H.S. classification it may be b
Page 36 and 37: 5.8 Payment of tax on Assessments T
Page 38 and 39: 5.11. Collection of VAT on Imports
Page 40 and 41: 6.3 Approval For Deferment Facility
Page 42 and 43: iv. If an importer declares only pa
Page 44 and 45: 6.6 Deferment on Local Supplies (Te
Page 46 and 47: 7.4 Tax Invoice Tax invoice should
Page 48 and 49: 7.11 Use of tax fraction to compute
Page 50 and 51: Lower Rate - 10% Goods and services
Page 52 and 53: Chapter - 9 Calculation of Tax 9.1
Page 54 and 55: accounted for in respect of all the
Page 56 and 57: transferred to a taxable activity a
Page 58 and 59: Eg. If A is an ice-cream vendor who
Page 60 and 61: (3) In the above case if the regist
Page 62 and 63: • claim (deduct) only the allowab
Page 64 and 65: • “Value of Supply” has to be
Page 66 and 67: VAT chargeable = 900,000 x 20% = 18
Page 68 and 69: • The Director General of Customs
Page 70 and 71: 10.5.6 Milk - item (iv) • Liquid
Page 72 and 73: (i) Insurance - xi(i) • Only the
Page 74 and 75: in Sri Lanka and consumed in Sri La
Page 76 and 77: Chapter - 11 Refunds 11.1 Unlike in
Page 78 and 79: 11.7 Set off of refunds against fut
Page 80 and 81: • To make an additional assessmen
Page 82 and 83: a genuine taxpayer who does not wis
Page 86 and 87: 15.3 Keeping of records regarding e
Page 88 and 89: 15.8 Example of a VAT Account VAT A
Page 90 and 91: the trading house or the other pers
Page 92 and 93: 16.4 Concessions available to Expor
Page 94 and 95: v. Importation of services are not
Page 96 and 97: Chapter - 17 Hire Purchase Transact
Page 98 and 99: (a) Under the existing provisions V
Page 100 and 101: y the hire-purchase company to the
Page 102 and 103: Chapter - 18 Leasing & VAT 18.1 Lea
Page 104 and 105: installments. Any VAT not recovered
Page 106 and 107: 18.13 Leasing inputs • Leasing in
Page 108 and 109: 18.15 Leasing Advance Sometimes it
Page 110 and 111: Thus output tax of B on the termina
Page 112 and 113: Chapter - 19 Mortgages 19.1 Mortgag
Page 114 and 115: • Services provided by internatio
Page 116 and 117: Chapter - 21 Some Obligations Under
Page 118 and 119: However an adjusted figure must be
Page 120 and 121: Chapter 23 Construction Contracts 2
Page 122 and 123: Government agencies mentioned above
Page 124 and 125: Chapter - 24 Rulings 24.1 Following
Page 126 and 127: • None of the companies covered b
Page 128 and 129: which he has supplied to the garage
Page 130 and 131: instructions can be exempted if suc
Page 132 and 133: ii. iii. any other registration tha
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i. Membership fees and or subscript
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Chapter - 25 Zero Rated Supplies 25
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(ii) (iii) (iv) Services directly c
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Supply of facilities for crew chang
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4. Yard to Port Transporting contai
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Chapter - 26 Travel Trade, Tourism
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ii. iii. But “travel insurance“
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26.6 VAT ON MICE Tourism VAT rate a
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x. Supply of goods & vehicles free
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and for VAT purposes the two compon
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(i.e the lottery organizer) on whic
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The VAT charged on above should be
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1.2.3 Other imported materials exce
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The sub-contract awarder should pay
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2.3.1 Imported goods (except fabric
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5.2.2 To BOI garment manufacturing
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Annexure - 2 First Schedule to the
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4. Supply of any services to any Di
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Services 1. Electricity more than 3
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Sale before 01.08.2002 - GST Regime
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GST = (CIF + CD + Surcharge + Ex.Sp
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to indicate the date of payment of
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The period within which the Board o
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Mrs. S.N.P. Abrew - Senior Assessor
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VAT Guide to Value Added Tax - sri lanka inland revenue ...

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