4. Amendment of section 22 of the principal enactment

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

Section 22 of the principal enactment is hereby amended as follows :—

(1)

in the second proviso to subsection (1) of that section, by the substitution for the words “the Customs

Ordinance shall be charged” of the words and figures

“the Customs Ordinance (Chapter 235) or acess under subsection (1) of section 14 of Sri Lanka Export

Development Act, No. 40 of 1979, shall be charged”;

(2)

in subsection (3) of that section, by the substitution in the fourth proviso thereto, for the words “the purchase of goods or services specified in the Fourth

Schedule (Luxury Rate) by any person which is allowable under this Act shall be restricted to fifteen per centum.” of the words “the purchase or importation of goods or the purchase of services specified in the Fourth Schedule (Luxury Rate)

which is allowable by any person under this Act shall be restricted to fifteen per centum other than in relation to the input tax paid on any goods imported including any goods received from a bonded area, by a registered person who imports or receives such goods, being raw-material to be used by such person for the purpose of manufacture and export of goods so manufactured”;

(3)

in subsection (5) of that section, by the substitution for the words “the input tax allowable under this

Act exceeds the amount of the output tax” of the words and figures “subject to subsection (10), the input tax allowable under this Act exceeds the amount of the output tax”;

(4)

in subsection (6) of that section—

(a)

in paragraph (ii), by the substitution for the words “not connected with a taxable activity”

of the words “not connected with a taxable activity or not included in the value of taxable supply”;

(b)

in the second proviso, by the substitution for the words and figures “such input tax for any taxable period commencing on or after January 1, 2003” of the words and figures “such input tax for any taxable period commencing on or after January 1, 2003 but prior to January 1,

2007.”.

(5)

by the addition immediately after subsection (9) of that section, of the following new subsection :—

“(10) The amount of input tax allowable under the preceding provisions of this section for any taxable period, shall be further restricted to a lesser amount of eighty five per centum of the output tax declared for that taxable period or the input tax allowable under the provisions of this Act. The residue, if any, of allowable input tax including the excess input tax as at December 31, 2006, in the case of a registered person who imports goods for re-sale without processing referred to in the third proviso to subsection (5) of section 22 restricted to eighty-five per centum, shall be deemed to be a part of the input tax allowable in the subsequent taxable period or periods, subject however to the same restriction:

Provided however, the above restriction shall not apply in relation to input tax attributable to—

(i)

supplies which are zero rated;

(ii)

supplies on which the tax is differed under this Act, being supplies; made to exporters registered with Textile Quota Board established under the Textile Quota Board

Act, No. 33 of 1996 or with the Export

Development Board extablished under the

Export Development Act, No. 40 of 1979, by a registered person with the Textile Quota

Board or the Export Development Board as the case may be, referred to in paragraph (c)

of subsection (2) of section 2; and

(iii)

project related goods or services during the project implementation period, incurred by a person who is registered under subsection (7)

of section 22.”.

Read on from s 5