Act of Parliament · As enacted
Nation Building Tax Act 2009
Official English translation. The Sinhala text prevails.
Official translationFrom Department of Government Printing, unchanged
s 1Short Title
This Act may be cited as the Nation Building Tax
Act, No. 9 of 2009 and shall come into operation on February 1, 2009.
The provisions of this Act shall apply to every person who—
imports of any article, other than any article comprised in the personal baggage of the passenger, into Sri Lanka, [“baggage” shall have the same meaning as in section 107A of the Customs
Ordinance (Chapter 235)]; or
carries on the business of manufacture of any article; or
carries on the business of providing a service of any description.
Every person referred to in subsection (1) shall, hereafter in this Act, be referred to as “person to whom this
Act applies”.
A tax to be called the “Nation Building Tax”
(hereinafter referred to as “the Tax”) shall, subject to the provisions of this Act, be charged from every person to whom this Act applies calculated at the rate of one per centum, in the following manner:—
in the case of a person referred to in paragraph (a) of subsection (1) of section 2, who imports any article into Sri Lanka on or after January1, 2009 the tax shall be chargeable in respect of the liable turnover of such person arising from the importation into Sri
Lanka of such article; and
in the case of a person referred to in paragraph (b) or (c) of subsection (1) of section 2, for every quarter commencing on or after January 1, 2009 (hereinafter referred to as “relevant quarter”, the tax shall be chargeable in respect of the liable turnover of such person for such relevant quarter.
In this section “liable turnover”—
with reference to any person referred to in paragraph (a) of subsection (1) of section 2 arising from the importation of any article, means the value of that article ascertained for the purpose of Value Added
Tax under section 6 of the Value Added Tax Act,
No. 14 of 2002;
with reference to any person and to any relevant quarter referred to in paragraph (b) of subsection (1) of section 2, means the sum receivable whether received or not from the sale in Sri Lanka, in that quarter, of every article manufactured by such person;
with reference to any person referred to in paragraph (c) of subsection (1) of section 2 and to any relevant quarter means the sum receivable, whether received or not, from the provision in Sri Lanka of any service referred to in that paragraph.
Notwithstanding the provisions of subsection (2), the liable turnover for any relevant quarter of any person to whom this Act applies, referred to in paragraph (ii) or (iii) of that section shall not include—
any bad debt incurred by such person in that quarter;
any value added tax under the Value Added Tax
Act, No. 14 of 2002 paid in that relevant quarter;
any excise duty under the Excise Duty (Special
Provisions) Act, No. 13 of 1989, paid in that quarter:
Provided however, any bad debt recovered in any relevant quarter, shall be included in the relevant turnover of that relevant quarter.
Notwithstanding the provisions of subsection (1), the tax shall not be chargeable from any person referred to in paragraph (b) or paragraph (c) of subsection (1) of section 2, for any relevant quarter if—
liable turnover of such person for that relevant quarter does not exceeds the sum of six hundred and fifty thousand rupees;
such person has paid for that relevant quarter optional Value Added Tax under Chapter IIIB of the
Value Added Tax Act, No. 14 of 2002.
s 4Payment of the Tax
Every person to whom this Act applies, being a person referred to in paragraph (b) or paragraph (c) of subsection (1)
of section 2 shall, notwithstanding that no assessment has been made on him for any relevant quarter, pay—
an amount equivalent to one third of the Tax payable for that relevant quarter on or before the twentieth day of the second month of that relevant quarter;
an amount equivalent to one third of the Tax payable for that relevant quarter on or before the twentieth day of the third month of that relevant quarter; and
an amount equivalent to the balance of the Tax payable for that relevant quarter on or before the twentieth day of the month immediately succeeding the end of that relevant quarter, to the Commissioner General, in such manner as may be specified by him in that behalf.
For the purpose of this section the expression “one third of the tax payable” in relation to any relevant quarter means one third of the Tax calculated on the sum estimated by such person to be the liable turnover for that relevant quarter.
The Director General of Customs shall collect from every person referred to in paragraph (a) of subsection (1) of section 2, the tax chargeable from such person in respect of every article imported by such person, at the time such article is imported, and shall make an endorsement on the import invoice relating to such article specifying the amount so collected.
Any amount collected by the Director General of
Customs in accordance with the preceding provisions of this section in relation to any article imported by any person to whom this Act applies shall be deemed to be the Tax chargeable in respect of the liable turnover arising from the importation of such article and shall be deemed to have been paid by such person to the Commissioner-General on the day on which such amount was so collected.
Any amount collectible under subsection (1) shall for the purpose of collection and recovery of such amount and notwithstanding anything to the contrary in this Act, be deemed to be customs duty chargeable under the Customs
Ordinance and accordingly, the provisions of the Customs
Ordinance shall apply to the collection and recovery of such amount.
Where any article imported into Sri Lanka is sold—
by the Director General of Customs for the recovery of any duty, levy or any charge collectible under the Customs Ordinance; or
by the Sri Lanka Ports Authority established by the
Sri Lanka Ports Authority Act, No. 51 of 1979, for the recovery of any dues collectible under that Act;
or
by the Commissioner General, the purchaser of such article shall be deemed to be a person referred to in paragraph (a) of subsection (1) of section 2, and the provisions of this Act shall apply to him accordingly.
s 6Credit for Tax paid
Where any person to whom this Act applies, being a person referred to in paragraph (b) of subsection (1) of section 2—
is deemed, by virtue of subsection (2) of section 5
to have paid in any relevant quarter, the tax in respect of any article imported by him;
has paid the tax under section 4 in respect of any article purchase by him from another person referred to in that paragraph, being in either case an article which is used exclusively in his business of manufacture, he shall be entitled to credit for the tax so paid against the tax payable under section 4 for that relevant quarter:
Provided that where such credit for any relevant quarter exceeds the tax so payable for that quarter, the excess shall be deemed to be an advance payment of the tax made under section 4 for the relevant quarter immediately succeeding that relevant quarter.
s 7Notice of chargeability
Every person to whom this Act applies, being a person referred to in paragraph (b) or paragraph (c) of subsection (1) of section (2) whose liable turnover for any relevant quarter exceeds the sum referred to in subsection (4) of section 3, shall give notice in writing to the Commissioner
General, of his chargeability to the tax for that quarter, not later than the fifteenth day of the last month of that relevant quarter. The notification shall disclose the name, the postal address, the taxpayer-identification number if any, or the income tax file number if any, and such other information as the Commissioner General may specify by Order published in the Gazette.
s 8Certain provisions of the Inland Revenue Act to apply
The provisions in sections 106, 107, 108 and 112 of
Chapter XII relating to Returns etc, Chapter XXII relating to
Assessments, Chapter XXIII relating to Appeals, Chapter
XXIV relating to Finality of Assessments and Penalty for
Incorrect Returns, Chapter XXV relating to Tax in Default and Sums Added Thereto, Chapter XXVI relating to
Recovery of Tax, Chapter XXVII relating to Miscellaneous,
Chapter XXIX relating to Penalties and Offences, Section 209 of Chapter XXX relating to Administration and Chapter
XXXI on General matters, of the Inland Revenue Act, shall mutatis mutandis apply to the furnishing of returns, assessments, appeal against assessments, finality of assessments and penalty for incorrect returns, tax in default and sums added thereto, recovery of tax, miscellaneous, penalties and offences, administration and general matters under this Act subject to the following modifications:—
every reference to the year of assessment in any such provision of the Inland Revenue Act, shall be deemed to be a reference to the “relevant quarter”
in this Act;
every reference to assessable income or taxable income in any such provision of the Inland Revenue
Act, shall be deemed to be a reference to the “liable turnover” in this Act; and
every reference to income tax in any such provision of the Inland Revenue Act, shall be deemed to be a reference to the tax charged and levied in terms of the provisions of this Act.
s 9Sinhala text to prevail in case of inconsistency
In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.
s 10Interpretation
In this Act, unless the context otherwise requires,—
“article” includes any goods, material or any agricultural or horticultural produce, but does not include any excepted article specified in Part I of the Schedule to this Act;
“body of persons”, “business”, “Commissioner
General” and “company” shall have the same respective meanings which they have in the Inland
Revenue Act;
“Inland Revenue Act” means the Inland Revenue Act,
No. 10 of 2006 ;
“manufacture” means any process for—
making an article;
assembling or joining any article whether by chemical process or otherwise;
adapting for sale any article;
packaging, bottling, putting into boxes, cutting into pieces, cleaning, polishing, wrapping, labeling, or in any other way whatsoever preparing for sale any article otherwise than in a retail stores for the purpose of sale in such store exclusively and directly to the consumer;
“person” includes any company, body of persons or any partnership;
“quarter” means the period of three months commencing on the first day of January, April,
July or October of any year:
Provided that the quarter which commences on the first of February 2009 shall comprise two months;
“service” does not include any excepted service specified in Part II of the Schedule to this Act; and
“year” means a calendar year.