2. Amendment of section 2 of Act…

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

Section 2 of the Value Added Tax Act, No. 14 of 2002, (hereinafter referred to as “the principal enactment”)

is hereby amended as follows:—

(a)

in sub-paragraph (iii) of subsection (1) of that section, by the substitution for the words and figures

“any taxable period commencing on or after January 1, 2005” of the words and figures, “any taxable period commencing on or after January 1, 2005, but prior to January 1, 2009”;

(b)

in subparagraph (v) of subsection (1) of that section by the repeal of all the words and figures from “(v)

for any taxable period” upto the words “the Fourth

Schedule of this Act” and the substitution therefor of the following:—

“(v)

(i)

for any taxable period commencing on or after January 1, 2005 but prior to

January 1, 2009, at the rate of fifteen per centum (Standard rate) (of which the Tax

Fraction is 3/23) on the value of such goods or services supplied or goods imported other than in respect of the following:—

(a)

goods or services chargeable with tax at zero per centum; and

(b)

goods or services specified in the

Fourth Schedule of this Act;

(ii)

for any taxable period commencing on or after January 1, 2009, at the rate of twelve per centum, (Standard rate)

(of which the Tax Fraction is 3/28) on the value of such goods or services supplied or goods imported other than in respect of —

(a)

goods or services chargeable with tax at zero per centum; and

(b)

goods or services specified in the

Fourth Schedule of this Act;”.

(c)

by the repeal of paragraph (d) of subsection (2) of that section and the substitution therefor of the following:—

“(d)

on the supply with the approval of Export

Development Board established by the Sri

Lanka Export Development Board Act, No.

40 of 1979 with the concurrence of the

Minister of the Ministry in charge of the subject of finance—

(i)

of any goods manufactured in Sri Lanka by such suppliers and supply by such supplier to any manufacturer to be utilized for the purpose of manufacture of goods other than the goods referred to in paragraph (c) of this subsection by such manufacturers who are registered with the Export Development Board as exporters; or

(ii)

of any service by such suppliers provided to any manufacturer which results in the improvement of the quality, character or value of any goods manufactured by such manufacturer of goods for export who is registered with Export Development

Board as an exporter, being a service provided by such suppliers approved by the Export Development Board established under the Sri Lanka Export

Development Board Act, No. of 40 of 1979 as a supply of services identified for this purposes,

Until such time as the activities of such manufacturers or service providers are monitored by the Export Development Board with the approval of the Ministry of the

Minister in charge of the subject of Finance and the Export Development Board, furnishes the reconciliation on the disposal of such goods on a quarterly basis as stipulated by the Commissioner-General to the satisfaction of the Commissioner-General, that such finished products are in fact exported by the recipient of the supplies.”.

Read on from s 3