Act of Parliament · As enacted
Nation Building Tax (Amendment) Act 2011
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
(Amendment) Act, No. 10 of 2011 and shall be deemed to have come into operation from January 1, 2011.
s 2Amendment of the section 2 of the Act No. 9 of 2009
Section 2 of the Nation Building Tax Act, No. 9 of 2009 (hereinafter referred to as the “principal enactment”) is hereby amended in subsection (1) of that section, by the substitution in substction (c) thereof, for the words “a service of any description.”, of the following :—
“a service of any description; or
carries on the business of wholesale or retail sale of any article other than such sale by the manufacturer of that article being a manufacturer to whom the provisions of paragraph (b) applies.”.
s 3Amendment of the section 3 of the principal enactment
Section 3 of the principal enactment is hereby amended as follows:—
in subsection (1) of that section—
by the substitution for all the words and figures from “every person to whom this Act applies, calculated” to “in the following manner:-”, of the words “every person to whom this Act applies, calculated at the appropriate rate specified in the Second Schedule to this Act, in the following manner:—”
in paragraph (ii) thereof, by the substitution for the words and figures “paragraph (b) or (c) of subsection (1)”, of the words “paragraphs (b), (c) or (d) of subsection (1)”
in subsection (2) of that section—
by the substitution in paragraph (i) thereof, for the words and figures “under section 6 of the Value Added Tax Act, No. 14 of 2002;” of the words and figures “under section 6 of the
Value Added Tax Act, No. 14 of 2002, but does not include the value of any excepted article referred to in the First Schedule to this Act;”;
by the substitution in paragraph (ii) thereof, for the words “of every article manufactured by such person;” of the words “of any article manufactured by such person, other than any excepted article referred to in the First Schedule to this Act;”;
by the substitution in paragraph (iii), for the words “any service referred to in that paragraph.”, of the following:—
“any service referred to in that paragraph, other than any excepted service referred to in the First Schedule to this Act;
with reference to any person referred to in paragraph (d) of subsection (1) of section 2 and to any relevant quarter means the sum receivable whether received or not from the sale in that quarter, of any article, other than—
pharmaceuticals;
any article subject to the Special
Commodity Levy under the Special
Commodity Levy Act, No. 48 of 2007, where such article is subsequently sold by the importer of such article; and
gems or jewellery, if sold on the payment of foreign currency by any person authorized by the Central Bank of Sri Lanka to accept payment in foreign currency.”.
in subsection (3) of that section—
by the substitution, for the words and figures
“in paragraph (ii) or (iii) of that section” of the words and figures “in paragraph (ii), (iii) or (iv) of that section”;
( b) by the addition immediately after paragraph (iii) thereof, of the following paragraphs:—
“(iv)
rebate paid under the Export
Development Rebate in relation to any international event as be approved by the Minister of Finance;
any turnover from the supply of any goods or services in relation to any international events as approved by the Minister of Finance (with effect from May 12, 2010).”.
in subsection (4) thereof,
by the substitution for the words and figures
“paragraph (b) or paragraph (c) of subsection (1) of section 2”, of the words and figures
“paragraph (b), paragraph (c) or paragraph (d)
of subsection (1) of section 2”;
in paragraph (i), by the substitution for the words “liable turnover of such person for that relevant quarter does not exceeds” of the words and figures “such quarter is a relevant quarter which commenced prior to January 1,
2011 and the liable turnover of such person for that relevant quarter does not exceed;”;
in paragraph (ii) thereof—
by the substitution for the words “that relevant quarter optional Value Added
Tax” of the words and figures “that relevant quarter which commenced prior to January 1, 2011, Optional Value Added Tax”;
by the substitution for the words and figures “Value Added Tax Act, No. 14 of 2002.” of the following:—
“Value Added Tax Act, No. 14 of 2002;
by the addition immediately after paragraph (ii) of the following new paragraphs :—
such relevant quarter is any quarter commencing on or after January 1, 2011
and the liable turnover of such person from the supply of any goods or services other than services referred to in paragraph (iv)
and paragraph (v), does not exceed the sum of five hundred thousand rupees; and
such quarter is a quarter commencing on or after January 1, 2011 and the liable turnover of such person from —
operating a hotel, guest house, restaurant or other similar business;
the processing of any locally procured agricultural produce in the preparation for sale;
providing educational services by any institution established locally for that purpose; or
supply of labour (manpower), and which do not exceed the sum of twenty five million rupees.”.
s 4Replacement of the section 4 of the principal enactment
Section 4 of the principal enactment is hereby repealed and the following section substituted therefor:—
4. Every person referred to in paragraph (b), paragraph (c) or paragraph (d) of subsection (1) of section 2 to whom this Act applies,shall, notwithstanding that no assessment has been made on such person for any relevant quarter, pay—
the tax payable for the first month of that quarter on or before the twentieth day of the second month of that quarter;
the tax payable for the second month of that quarter on or before the twentieth day of the third month of that quarter;
the balance tax payable for that quarter on or before the twentieth day of the month immediately succeeding the end of the relevant quarter, calculated by deducting the tax paid under paragraphs (i) and (ii) from the tax payable for that quarter, to the Commissioner-General, in such manner as may be specified by him in that behalf.”.
“Payment of the tax
s 5Replacement of section 6 of the principal enactment
Section 6 of the principal enactment is hereby repealed and the following section substituted therefor:—
6. Where any person to whom this Act applies, utilizes wholly or partly any goods purchased from a manufacturer registered for payment of tax under this Act or imported by himself, in the manufacture of goods liable to tax under this Act, such manufacturer shall be entitled to tax credit in respect or such tax paid on such goods in proportion to the value of goods manufactured by such person which are liable to tax under this Act.”.
s 6Insertion of new section 6A in the principal enactment
The following new section is hereby inserted immediately after section 6 of the principal enactment and shall have effect as section 6A of that enactment :—
6A. (1)
The turnover from the business of any Islamic Financial Transaction shall be chargeable to tax in terms of the provisions of this Act.
The Commissioner - General of Inland
Revenue shall in order to determine the extent of liability to tax of any particular Islamic
Financial Transaction, issue from time to time, such rules and guidelines as may be required for the purpose of -
identifying the circumstances which would amount to an
Islamic Financial Transaction ;
and
ascertaining the profits and income arising out of any
Islamic Financial Transaction.”.
“Tax Credits.
“Turnover from Islamic
Financial
Transactions to be chargeable to tax.
s 7Amendment of the section 10 of the principal enactment
Section 10 of the principal enactment is hereby amended as follows:
in the definition of the expression “article”, by the substitution for the words “any agricultural or horticultural produce, but does not include any excepted article”, of the words “any agricultural or horticultural produce, but for any period ended prior to January 1, 2011 does not include any excepted article”;
in the definition of the expression “service”, by the substitution for the words “does not include any excepted service”, of the words “for any period ended prior to January 1, 2011 does not include any excepted service”,
in the definition of the expression “person”, by the substitution for the words “any company, body of persons or any partnership”, of the words “any company, body of persons or any partnership”.
s 8Amendment of the Schedule to the principal enactment
The Schedule to of the principal enactment is hereby amended as follows:—
by the renaming of the “SCHEDULE” hereto as the
“FIRST SCHEDULE”;
in Part I of such Schedule—
in item (xiii), by the substitution for the words
“pharmaceuticals; and”, of the words
“pharmaceuticals;”
in item (xv), by the substitution for the words
“borne by the Goverment” of the words “borne by the Government ;”
by the addition immediately after item (xv)
thereof of the following items:—
“(xvi)
any goods imported or supplied to a specified project carried on, out of foreign funds or donations received by the Goverment,as approved by the
Minister considering the economic benefit to the country.
bitumen classified under HS code
No. 2714 ;
any article imported or sold by any society registered under Co-operative
Societies Act, No. 5 of 1972 or under the respective statutes enacted by the
Provincial Councils providing for such registration or Lak Sathosa Limited registered under the Companies Act,
No. 7 of 2007 ;
tractors classified under HS codes 8701.10. 10, 8701. 10. 90, 8701. 90. 10
and 8701.90.20 ;
raw materials or packing materials imported for the manufacture of pharmaceuticals subject to the approval of the relevant authority ;
gold imported (effective from March 1, 2010) ;
plant, machinery or equipment imported on temporary basis for the use of large scale infrastructure development projects approved by the
Minister in charge of the subject of
Finance as being of benefical for the economic development of Sri Lanka, on condition that goods will be re-exported after the completion of work
(effective from July 1, 2010);
foreign currency notes imported, being notes clssified under HS Codes 4907.00.90 (effective from June 1,
2010) ;
raw materials or packing materials imported for the manufacture of ayurvedic preparations which belong to the Ayurveda Pharmacopoeia or ayurveda preparation subject to the approval of the relevant authority ;
pure-bred breeding animals under HS
0102.10 or HS 0104.20.10, milking machines under HS 8434.10, dairy machinery under HS 8434. 20 and spare parts under HS 8434.90, at the point of importation.
(effective from 18.01.2011);
import of samples in relation to business which is worth not more than rupees twenty-five thousand, subject to which terms and conditions as prescribed by the Director - General of
Customs.”.
in Part II of that Schedule—
in item (vii), by the substitution for the words
“services of a construction contractor, not being a sub-contractor, insofar as”, of the following words and figures:—
“Services—
prior to January 1, 2011, of a construction contractor, not being a sub-contractor; or
on or after January 1, 2011, of a construction contractor or sub-contractor”, in so far as”;
in item (xii), by the substitution for the words
“operating a hotel, guest house, restaurant or other similar business”, of the words and figures “For any period ended prior to January 1, 2011, operating a hotel, guest house, restaurant or other similar business”;
in item (xiii), by the substitution for the words
“local produce”, of the words “local produce”;
in item (xxiii), by the substitution for the words “Act, No. 34 of 2002,”, of the words
“Act, No. 34 of 2002;”;
by the addition, immediately after the item (xxiii), the following new items :—
the services provided by foreign consultancies for the large scale infrastructure development projects being projects which have been approved by the Minister of Finance, as beneficial for the economic development of Sri Lanka (effective from July 1, 2010)
services provided to any specific project carried on, out of foreign funds or donations received by the
Government, as approved by the
Minister considering the economic benefit to the country;
services provided to the port or airline in relation to international transportation;
services provided in relation to ship building for the international market for payments made in foreign currency;
telecommunication services;
supply of locally developed soft ware;
services provided by any Government
Department, Ministry or any undertaking fully owned by the
Government;
services provided by Sri Lankan
Airlines Ltd.;
services provided by Mihin Air (Pvt.)
Ltd.;
services provided by Air Lanka
Catering Services Ltd.;
services provided by any society registered under the Co-operative
Societies Law No. 5 of 1972 or under any Statute enacted by a Provincial
Council, or Lak Sathosa Limited, registered under the Companies Act,
No. 7 of 2007;
s 9
The following new Schedule, as the Second Schedule, is added immediately after the First Schedule:—
“SECOND SCHEDULE
[Section 3]
Tax Rates of Nation Building Tax payable by any person to whom this Act applies
PART I
For the period ending on April 30, 2009
on the liable turnover
01 per centum.
PART II
For the period commencing on May 1, 2009 but prior to December 31, 2010—
on the liable turnover (other than in respect of turnover from the sale of rice manufactured from locally procured paddy for the period from July 1, 2009 to December 31, 2010)
03 per centum.
on the liable turnover from rice manufactured out of locally procured paddy for the period from July 1, 2009 to December 31, 2010
1.5 per centum.
PART III
For any quarter commencing on or after January 01, 2011–
on the liable turnover (other than any turnover from the wholesale or retail sale) of any article
02 per centum.
on the liable turnover from wholesale or retail sale of any article–
three fourth of liable turnover of any distributor–
Nil
Addition of
Second
Schedule to the principal enactment.
one half of the liable turnover from
(the wholesale or retail sale of) any article other than any turnover of a distributor–
Nil
the balance liable turnover
02 per centum.
For the purposes of Part III of the
Second Schedule the expression
“distributor”, shall have the same meaning as is assigned to it in section 13 of the Economic Service Charge
Act, No. 13 of 2006.”.
s 10Apportionment of revenue to the Provincial Councils,
The Commissioner-General shall transfer 33 1/3 per centum of the total sum collected as Nation Building Tax to the respective Provincial Council within such intervals and in such proportions as the Secretary to the Treasury may, from time to time, taking into consideration the required budget of each such Council, direct.
s 11Exemption of certain small and medium enterprises from the payment of taxes payable by them
Any person or partnership carrying on an enterprise, having an annual turnover of a sum not exceeding rupees one hundred million who is liable to pay the Nation
Building Tax under this Act and who has defaulted in the payment of such Nation Building Tax as is payable by him under this Act in respect of any taxable quarter ending on or before December 31, 2010 due to the existence generally of any conflict environment or due to any financial constraints of such person or partnership shall be exempted from the payment of such charge as is in default under this Act:
Provided that, the Commissioner - General of Inland
Revenue shall on a request made in that behalf, issue to such person or partnership a Certificate of Exemption in respect of the sum in default:
Provided futher, the person or partnership to whom the
Certificate of Exemption is issued shall simultaneously forward to the Commissioner - General of Inland Revenue, a written assurance to the effect that such person or partnership will be responsible for the payment of all sums which may become payable by him under this Act, in respect of any future taxable quarter commencing on or after January 1, 2011.
s 12Indemnity
Where the Commissioner - General of Inland
Revenue or the Director - General of Customs as the case may be collects under the provisions of section 4 or section 5 respectively of the principal enactment, the levy calculated at the rate specified in section 3 of this Act, during the period commencing on January 1, 2011 and ending on the date of the coming into operation of this Act from a person to whom the provisions of this Act applies, such collection shall be, deemed for all purposes to have been, and to be, validly made, and the Commissioner - General of Inland Revenue and the Director - General of Customs , as the case may be, are hereby indemnified against all actions, civil or criminal in respect of such collection.
s 13Sinhala text to prevail in case of an inconsistency
In the event of any inconsistency between the
Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.