Act of Parliament · As enacted
Value Added Tax (Amendment) Act 2015
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
This Act may be cited as the Value Added Tax
(Amendment) Act, No. 11 of 2015 and subject to subsection (2) of this section, shall be deemed to have come into operation on January 1, 2015 unless the date on which certain provisions shall come into operation are specified in such sections.
The amendments made to section 17, 19, 21, 25A(5),
26, 28, 34, 41, 44, 47 and 66 by this Act shall come into operation on such date as the Minister may appoint by Order published in the Gazette.
s 2Amendment of section 2 of the Value Added Tax Act, No.14 of 2002
Section 2 of the Value Added Tax Act, No.14 of 2002
(hereinafter referred to as the “principal enactment”) is hereby amended as follows:-
in item (iii) of sub-paragraph (v) of subsection (1)
of that section by the repeal of the words and figures
“(iii) for the period commencing on” up to the words
“at zero per centum” and the substitution therefor of the following:-
“(iii)
for the period commencing on November 23, 2010 and ending on December 31, 2010
and for any taxable period commencing on or after January 1, 2011, and ending on
December 31, 2014, at the rate of twelve per centum (of which the tax fraction is 3/28); and
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for any taxable period commencing on or after January 1, 2015 at the rate of eleven per centum (of which the tax fraction is 11/111), on the value of such goods or services supplied, or goods imported, other than the goods or services chargeable with tax at zero per centum”; and
by the repeal of item (vi) of sub-paragraph (e) of subsection (2) of that section and the substitution therefor of the following new sub-paragraph:-
“(vi)
any person registered under the provisions of subsection (7) of section 22 of this Act, including any strategic development project in terms of subsection (4) of section 3 of the Strategic Development Project Act,
No.14 of 2008, as is referred to in sub-paragraph (i) of paragraph (f) of Part II of the
First Schedule where purchases are allowed to be made from persons registered for
Simplified Value Added Tax Scheme, during the project implementation period insofar as such supplies are project related supplies;”.
in sub-paragraph (e) of subsection (2) of that section, by the substitution for the words “such purpose and which are specified in the Order published in the Gazette.” of the words “such purpose and published in the Gazette.”.
s 3Amendment of section 3 of the principal enactment
Section 3 of the principal enactment is hereby amended as follows:-
in paragraph (f) of subsection (1) of that section, by the repeal of the words “(f) any person or partnership”
up to the words “Part II of the First Schedule.” and the substitution therefor of the following:-
“(f)
any person or a partnership having total supplies of goods for any consecutive period
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of three months in any calendar year not less than rupees–
five hundred million, for any such period of three months falling within any period commencing on or after
January 1, 2013, but ending on or before December 31, 2013;
two hundred and fifty million, for any such period of three months falling within any period commencing on or after January 1, 2014, but ending on or before December 31, 2014; and
one hundred million, for any such period of three months falling within any period commencing on or after
January 1, 2015, including the supplies under the preceding paragraphs of this section and any supplies exempted under Part II of the First Schedule;”.;
in paragraph (i) of subsection (2) of that section, by the substitution for the words “for the purposes of this Act” of the words “the substitution for the words
“for the purposes of this Act, including any business in which any director of a company or partner of a partnership is a director or partner of such other business or businesses; and”.
s 4Amendment of section 5 of the principal enactment
Section 5 of the principal enactment is hereby amended by the repeal of subsection (10) of that section and the substitution therefor of the following new subsection:-
“(10)
For any period-
prior to October 25, 2014, where any goods supplied under a lease agreement is subsequently transferred to the lessee at the
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termination of such agreement for a consideration not exceeding ten per centum of the total consideration of the lease agreement, such consideration shall be deemed to be a lease rental recovered under such agreement, and where such consideration is more than ten per centum of the total consideration of the lease agreement, such supply shall be deemed to be a separate supply.
on or after October 25, 2014, where any goods supplied under a lease agreement is subsequently transferred to the lessee at the termination of such agreement for a consideration, such consideration shall be treated as a lease rental obtained under such lease agreement.”.
s 5Amendment of section 7 of the principal enactment
Section 7 of the principal enactment is hereby amended by the repeal of sub-paragraph (vii) of paragraph (b) of subsection (1) of that section and the substitution therefor of the following new sub-paragraph:-
“(vii)
the provision of services to overseas buyers by a garment buying office registered with the Textile
Quota Board established under the Textile Quota
Board Act, No.33 of 1996 or the Simplified Value
Added Tax Scheme, as the case may be, where payment for such service is received in foreign currency, through a bank in Sri Lanka in so far as such services are identified by the Commissioner-General as being services essential for facilitating the export of garments to such overseas buyers.”.
s 6Amendment of section 8 of the principal enactment
Section 8 of the principal enactment is hereby amended by the repeal of the first proviso to that section and the substitution therefor of the following new proviso:-
“Provided that, in the case of a registered person referred to in paragraph (f) of section 3 of this Act, the value of the
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supply of goods exempted under this Act made by such registered person directly or on behalf of any other person, which is in excess of twenty five per centum of the value of total supply of goods of such registered person other than the value of the supply of-
zero rated articles;
locally produced fresh milk, and with effct from
November 1, 2015 locally grown fruits and vegetables or locally produced rice; and
goods subject to Special Commodity Levy where the supply is made by the importer himself, shall notwithstanding the provisions contained in the
Special Commodity Levy Act, No. 48 of 2007, be deemed to be treated as liable supplies of such registered person and chargeable to tax at the rate specified in section 2 of this Act using the tax fraction on the tax inclusive consideration:”.
s 7Amendment of section 10 of the principal enactment
Section 10 of the principal enactment is hereby amended as follows:-
in subsection (1) of that section—
in paragraph (iii), by the substitution for the words and figures “(iii) on or after
January 1, 2013, carries on” of the words and figures “(iii) on or after January 1, 2013, but prior to January 1, 2015 carries on”.
by the insertion immediately after paragraph (iii), of the following new paragraph:-
“(iv)
on or after January 1, 2015 carries on or carries out any taxable activity in
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Sri Lanka shall be required to be registered under this Act, if-
at the end of any taxable period of one month or three months, as the case may be, the total value of the taxable supplies of goods or services or goods and services of such person, made in Sri Lanka in that taxable period of one month or three months, as the case may be, has three million seven hundred and fifty thousand rupees; or
in the twelve months period then ending, the total value of the taxable supplies of goods or services or goods and services of such person, made in Sri Lanka has exceeded fifteen million rupees; or
at any time, there are reasonable grounds to believe that the total value of the taxable supplies of goods or services or goods and services of such person in
Sri Lanka, in the succeeding one month or three months taxable period, as the case may be, is likely to exceed three million seven hundred and fifty thousand rupees or in the succeeding twelve months period is likely to exceed fifteen million rupees.”.
in subsection (2) of that section, by the substitution for the words “is not less than rupees two hundred
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and fifty million.” of the words and figures “is not less than rupees-
five hundred million for any such period of three months falling within any period commencing on or after January 1, 2013, but ending on or before December 31, 2013;
two hundred and fifty million for any such period of three months falling within the period commencing on or after January 1,
2014 but ending on or before December 31,
2014; and
one hundred million for any such period of three months commencing on or after January 1, 2015.”.
s 8Amendment of section 16 of the principal enactment
Section 16 of the principal enactment is hereby amended as follows:-
in subsection (2) of that section, by the substitution for the words “protection of revenue, cancel his registration.” of the words “protection of revenue, cancel his registration or list such registration as an inactive registration for the purposes of this Act until further inquiries are made prior to such cancellation.”.
by the repeal of subsection (2A) of that section and the substitution therefor of the following new subsection:-
“(2A)
Where the Commissioner-General-
cancels any registration under subsection (2), he shall cause a list of names and the registration numbers of such registered persons to be published
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in three daily newspapers in Sinhala,
Tamil and English languages, having a wide circulation; or
decides such registration as inactive, shall publish the names and registration numbers of the persons whose registration has been decided as inactive in the official web site of the
Department of Inland Revenue and the list so published shall be updated on monthly basis, notwithstanding the provisions of section 73.”.
s 9Amendment of section 17 of the principal enactment
Section 17 of the principal enactment is hereby amended, by the substitution for the words “in writing”
wherever such words appear in subsection (2) of that section of the words “in writing or by electronic means”.
s 10Amendment of section 19 of the principal enactment
Section 19 of the principal enactment is hereby amended, by the substitution for the words “in writing” of the words “in writing or by electronic means”.
s 11Amendment of section 21 of the principal enactment
Section 21 of the principal enactment is hereby amended, other than subsection (1) thereof by the substitution for the words “in writing” wherever such words appear, of the words “in writing or by electronic means”.
s 12Amendment of section 22 of the principal enactment
Section 22 of the principal enactment is hereby amended as follows:-
by the repeal of the first proviso to subsection (6)
of that section and substitution therefor of the following new proviso:-
“Provided that, notwithstanding the provisions of subsection (2), and the exemptions specified in item (i) and item (ii) of paragraph (f) of Part II of the
First Schedule to this Act, any registered person
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who is engaged in supplying of goods or services to–
any special project as is referred to in item (ii) above where the payment is borne by the
Government; or
any strategic development project as is referred to in item (i) above if such supplies are project related supplies and are allowable to be claimed by the said Strategic
Development Project within the provisions under the Strategic Development Act, No. 14
of 2008, may be allowed to claim the input tax on the purchase of goods or services connected to supply of goods or services made to such projects:”;
in subsection (13) of that section, by the substitution for the words “issued by the Central
Bank for this purpose.” of the words “issued by the
Central Bank for this purpose and read with the guidelines issued and published in Gazette
Notification by the Commissioner-General of
Inland Revenue.”.
s 13Amendment of section 25A of the principal enactment
Section 25A of the principal enactment is hereby amended as follows:-
in subsection (1) of that section by the substitution for the words and figures “the provisions of Chapters
I, II, III and item (xi) of the First Schedule to this
Act” of the words and figures “the provisions of
Chapters I, II, III and item (x) of paragraph (b) of
PART II of the First Schedulr to this Act”;
in paragraph (b) of subsection (2) of that section, by the substitution for the words and figures “on or
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after January 1, 2013.” of the words and figures “on or after January 1, 2013 but prior to January1, 2015;
or”;
by the insertion immediately after paragraph (b) of that subsection the following new paragraph:-
“(c)
where the value of such supplies for a period of three months exceeds three million seven hundred and fifty thousand rupees or for a period of twelve months exceeds fifteen million rupees, as the case may be, if such registration has taken place for any period on or after January 1, 2015.”;
in subsection (5) of that section, by the substitution for the words “in writing” of the words “in writing or by electronic means”.
s 14Amendment of section 25C of the principal enactment
Section 25C of the principal enactment is hereby amended in subsection (3) of that section as follows:-
in paragraph (c) of that section, by the substitution for the words “twenty per centum; and” of the words
“twenty per centum;”;
by the repeal of paragraph (d) of that subsection and the substitution therefor of the following new paragraph:-
“(d)
commencing from January 1, 2011, but prior to January 1, 2015 shall be twelve per centum;”; and
by the addition immediately after paragraph (d) of that subsection, the following new paragraph:-
“(e)
commencing from January 1, 2015, shall be eleven per centum.”.
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s 15Amendment of section 25F of the principal enactment
Section 25F of the principal enactment is hereby amended in paragraph (h) of that section as follows:-
in sub-paragraph (b) of that paragraph by the substitution for the words “twelve months as at the date of such agreement” of the words “twelve months as at the date of such agreement, or”;
by the addition immediately after sub-paragraph (b) of that paragraph, the following new sub-paragraph:-
“(c)
of leasing facilities under any finance lease agreement or operating leasing agreement on any asset other than any land or building, if such agreement is entered into on or after
October 25, 2014 and not being an agreement for re-schedule of any agreement entered into prior to October 25, 2014.”.
s 16Insertion of new section 25K in the principal enactment
The following new section is hereby inserted immediately after section 25J of the principal enactment and shall have effect as section 25K of that enactment:-
25K. The Minister may on the recommendation of the Commissioner-General of Inland Revenue make regulations for the purpose of authorizing or facilitating the use of electronic communications or electronic records in respect of matters specified in section 8 of the Electronic Transactions Act, No.19 of 2006.”.
s 17Amendment of section 26 of the principal enactment
Section 26 of the principal enactment is hereby amended in subsection (2) thereof by the substitution for the words “in writing” of the words “in writing or by electronic means”.
s 18Amendment of section 28 of the principal enactment
Section 28 of the principal enactment is hereby amended in subsection (1) thereof by the substitution for the words “in writing” of the words “in writing or by electronic means”.
“The use of electronic communications or electronic records.
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s 19Amendment of section 34 of the principal enactment
Section 34 of the principal enactment is hereby amended in subsection (2) thereof by the substitution for the words “in writing” of the words “in writing or by electronic means”.
s 20Amendment of section 41 of the principal enactment
Section 41 of the principal enactment is hereby amended in subsection (1) thereof by the substitution for the words “in writing” of the words “in writing or by electronic means”.
s 21Amendment of section 44 of the principal enactment
Section 44 of the principal enactment is hereby amended in subsection (1) thereof by the substitution for the words “in writing” of the words” in writing or by electronic means”.
s 22Amendment of section 47 of the principal enactment
Section 47 of the principal enactment is hereby amended by the substitution for the words “in writing” of the words “in writing or by electronic means”.
s 23Amendment of section 66 of the principal enactment
Section 66 of the principal enactment is hereby amended by the substitution for the words”in writing” of the words “in writing or by electronic means”.
s 24Amendment of section 83 of the principal enactment
Section 83 of the principal enactment is hereby amended in the expression of the definition “taxable period”
as follows:-
by the insertion immediately before paragraph (a)
of the following:-
“(1)
for any period prior to April 1, 2011-”; and
by the addition immediately after paragraph (b), of the following:-
“(2)
for any period commencing on or after April 1, 2011-
a period of one month (other than in
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respect of the specified institutions referred to in section 25B) –
where any person registered with the Simplified Value Added Tax
Scheme and accorded Registered
Identified Purchaser status as specified in the guidelines issued and published in the Gazette by the Commissioner-General for that purpose referred to in paragraph (e) of subsection (2) of section 2;
where any person has commenced a business or started a project and undertakes to comply with the requirements of subsection (7) of section 22 of the
Value Added Tax Act, No.14 of 2002 or subsection (6) of section 22 of the Goods and Services Tax
Act, No.34 of 1996;
a period of three months commencing respectively on the first day of January, the first day of April, the first day of
July and the first day of October of each year in respect of a registered person who is not referred to in paragraph (a)
or who has opted to submit quarterly returns on the approval by the
Commissioner-General;”.
s 25Amendment of PART II of the First Schedule to the principal enactment
The First Schedule of the principal enactment is hereby amended in PART II thereof as follows:-
The Heading of PART II of the principal enactment is hereby amended by the substitution for the words
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and figures “For any taxable period commencing on or after January 1, 2004,-” of the words and figures “For any taxable period commencing on or after January 1, 2004 (subject to effective dates specified in subsequent amendments to the
Schedule).”;
in paragraph (a) of that PART-
by the repeal of item (viii) and the substitution therefor of the following:-
“(viii)
agricultural tractors or road tractors for semi-trailers (with effect from the date on which this Act comes into operation);”
by the addition immediately after item (xxv)
of the following new item:-
“(xxvi) ethyl alcohol imported or manufactured and supply as a by-product which is liable to customs duty and cess on importation or excise duty under the Excise Duty
Ordinance on manufacturing of such products.”;
in paragraph (b) of that PART-
in sub-item (ii) of item (A) of sub-paragraph (b) of item (ii) of that paragraph by the substitution for the words and figures “on or after April 1, 2012.” of the words and figures
“on or after April 1, 2012, if such lease agreement is entered into on or before October 24, 2014.”;
in sub-item (iii) of item (A) of sub-paragraph (b) of item (ii) of that paragraph, by the substitution for the words and figures “on or
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after January 1, 2013.” of the words and figures “on or after January 1, 2013, if such lease agreement is entered into on or before
October 24, 2014;”;
in item (B) of sub-paragraph (b) of item (ii) of that paragraph, by the substitution for the words and figures “on or after January 1,
2005;” of the words and figures “on or after
January 1, 2005, if such agreement is entered into on or before October 24, 2014;”;
in item (C) of sub-paragraph (b) of item (ii) of that paragraph, by the substitution for the words and figures “paragraph (c)”of the words and figures “paragraph (c), if such agreement is entered into on or before October 24,
2014.”;
in item (b) of sub-paragraph (h) of item (x) of that PART,
by the substitution for the words “date of such agreement;” of the words “date of such agreement; or” and
by the addition immediately after sub item (b) of sub-paragraph (h) of item (x), the following new sub-item:-
“(c)
of leasing facilities under any finance lease agreement or operating leasing agreement on any asset other than land or building if such agreement is entered into on or after October 25, 2014 not being an agreement for re-schedule of any agreement entered into prior to October 25,
2014;”.
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in item (xi) of that paragraph, by the substitution for the words “the project relates exclusively to the aforesaid supply, lease or rental;” of the words “the project relates exclusively or partially to the aforesaid supply, lease or rental;”;
by the repeal of item (xiii) of that paragraph and the substitution therefor of the following new item:-
“(xiii)
imported-
unprocessed timber logs, ships or rattans; or
any article subject to the
Special Commodity Levy under the Special Commodity
Levy Act, No. 48 of 2007
subject to the condition that such articles are sold without any processing except adaptation for sale;”;
by the repeal of item (xxxi) of that paragraph and the substitution therefor of the following new item:-
“(xxxi)
telecommunication services liable to the telecommunication levy under the Telecommunication Levy Act,
No.21 of 2011, and the services specifically excluded from such liability in the definition of the expression “telecommunication services”in that Act (effective from
January 1, 2014);”;
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by the addition immediately after item (l) of paragraph (b), of the following new item:–
Locally manufactured coconut milk (with effect from November 1, 2015).”.
in paragraph (c) of that PART:-
by the repeal of item (xxx) of that paragraph and the substitution therefor of the following new item:-
“(xxx)
samples in relation to a business worth not more than rupees-
twenty five thousand, on such imports made prior to January 1, 2015; and
fifty thousand on such imports for any period on or after
January 1, 2015, subject to such terms and conditions as specified by the Director-General of
Customs;”; and
by the addition immediately after item (xxxvii), of the following new item:-
“(xxxviii)
machinery, equipment or spare parts imported by Sri Lanka
Ports Authority to be used exclusively within the ports of the Sri Lanka Ports Authority”.
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by the addition immediately after paragraph (k) of that PART the following new paragraph:-
“(l)
with effect from October 25, 2014, the import or supply of -
(i)
any motor vehicle identified under the Harmonized Commodity
Description and Coding Numbers for custom purposes and liable to the
Excise (Special Provisions) Duty under the
Excise
(Special
Provisions) Act, No. 13 of 1989 on the importation of such vehicle or any motor vehicle liable to the same duty on the manufacture of any such vehicle;
any motor vehicle remain unsold as at October 25, 2014, which would otherwise have been liable to the same duty on the importation or manufacture of the same, if imported or manufactured after
October 25, 2014, other than any vehicle supplied under a financial leasing agreement entered into prior to October 25, 2014, which are disposed after the repossession of the same by the lessor on which input tax had been claimed;
cigarettes identified under the
Harmonized Commodity Description and Coding System Numbers for custom purposes and liable to the Excise
(Special Provisions) Duty under Excise
(Special Provisions) Act, No. 13 of 1989 and cess under Sri Lanka Export
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Development Act, No. 40 of 1979 on the importation or manufacture of the same including cigarettes in the stocks remain unsold as at October 25, 2014
which would have been liable to the same duty on the importation or manufacture the same, if imported or manufactured after October 25, 2014;
or
liquor identified under the Harmonized
Commodity Description and Coding
System Numbers for custom purposes and subject to the Customs Duty and cess on the importation or Excise Duty on manufacture of the same including liquor imported or manufactured prior to October 25, 2014 remain unsold as at October 25, 2014 which would have been liable to the same duty and cess on importation or Excise Duty on manufacture of the same, if imported or manufactured after
October 25, 2014.”.
s 26Amendment of section 13 of the Value Added Tax (Amendment) Act, No.7 of 2014
The Amendment introduced to the principal enactment by section 13 of the Value Added Tax
(Amendment ) Act, No.7 of 2014 is hereby amended by the substitution of paragraph (c) of that section of the following new paragraph:-
“(c)
by the substitution for the words “Senior Assessor”
wherever such words occur in the principal enactment, of the words “Deputy Commissioner or
Senior Deputy Commissioner”.
s 27Validation
Any person who is authorized to collect the Value
Added Tax as provided for in this Act during the period commencing from January 1, 2015 and ending on the date
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on which the Certificate of the Speaker is endorsed in respect of this Act, shall be deemed to have acted with due authority and such collection shall be deemed to have been, and to be, validly made and such person is hereby indemnified against all actions civil or criminal, in respect of such collection:
Provided that, the aforesaid provisions shall not affect any decision or Order made by any Court or any proceedings pending in any Court in respect of any tax collected as provided for in this Act during the said period.
s 28Sinhala 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.
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