Act of Parliament · As enacted
Value Added Tax (Amendment) Act 2013
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
s 1Short Title and date of operation
This Act may be cited as the Value Added Tax
(Amendment) Act, No. 17 of 2013 and shall be deemed to have come into operation on January 1, 2013 unless different dates of operation are specified therefor, in the relevant sections.
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” ) as last amended by the Value Added Tax (Amendment) Act, No.7 of 2012 is hereby further amended as follows:—
in paragraph (a) of the first proviso to subsection (1)
of that section, by the substitution for the words “any garments” of the words “any garments or fabric”;
in subsection (2) of that section:-
by the substitution for the words “shall be administrated by the Commissioner-General” in the proviso to paragraph (c) thereof, of the words
“shall be administrated by the Commissioner-General as stipulated in paragraph (e) of this subsection;
by the substitution for the words “shall be administrated by the Commissioner-General” in the proviso to paragraph (d) thereof, of the words
“shall be administrated by the Commissioner-General as stipulated in paragraph (e) of this subsection;
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by the repeal of paragraph (e) of subsection (2)
and the substitution therefor of the following :—
“(e) on the supply of goods or services by any registered person, who is registered in the
Simplified Value Added Tax Scheme administrated by the Commissioner-General to -
any exporter or provider of zero rated services specified in terms of section 7;
any registered person who supplies goods or services to any Strategic
Development Project in terms of subsection (4) of section 3 of the
Strategic Development Projects Act,
No. 14 of 2008, as is referred to in sub-paragraph (i) of paragraph (f) of
Part II of the First Schedule, during the project implementation period so far as such supplies are project related supplies;
any registered person engaged in any specific project referred to in sub-paragraph (ii) of paragraph (f) of
PART II of the First Schedule
(effective from April 1, 2011);
any manufacturer who supplies goods manufactured in Sri Lanka to any exporter;
any supplier who provides value added services to an exporter which results in the improvement of the quality, character or value of any goods manufactured for export;
any person registered under the provisions of subsection (7) of section 22 of the Act, during the
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project implementation period so far as such supplies are project related supplies;
any registered person who supplies any goods or services, to any registered person referred to in sub-paragraph (i), (ii), (iii), (iv), (v) or (vi)
above, provided that, the
Commissioner-General is, on the information available, is satisfied that the value of such supplies exceeds fifty per-centum of the total supplies of such registered person who supplies such goods or services, until such time as the activities of such registered person is carried out to the satisfaction of the Commissioner-General in the manner stipulated by the
Commissioner-General in the guidelines issued for such purpose and which are specified in the Order published in the
Gazette.
in subsection (3) of that section:—
the first proviso to that subsection is amended as follows:-
in paragraph (a), by the substitution for the words “customs bonded area;” of the words and figures “customs bonded area or a free port referred to in PART IV of the
Finance Act, No. 12 of 2012;”;
in paragraph (f), by the substitution for the words and figures “who has registered with the Textile Quota Board established under the Textile Quota Board Act, No.33 of 1996, with the approval of the Textile Quota Board
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or the Board of Investment, as the case may be.” of the words and figures “who has registered with the Simplified Value Added
Scheme administrated by the
Commissioner-General with the approval of the Commissioner-General.”;
the second proviso to that subsection is amended as follows:—
by the repeal of item (vi) of paragraph (a)
and the substitution therefor of the following:—
“(vi) any goods imported, including any goods received from customs bonded area by a person registered with the Simplified Value Added
Scheme administrated by the
Commissioner-General who imports or receives such goods for the manufacture of goods or the provision of services to a manufacturer of goods for export referred to in item (i) of paragraph (e)
of subsection (2) of section 2”;
by the repeal of item (vii) of paragraph (a)
and the substitution therefor of the following:-
“(vii) any plant or machinery imported, including any plant or machinery received from a customs bonded area by a person registered with the
Simplified Value Added Tax Scheme administrated by the Commissioner-General who imports or receives such plant or machinery for the usage by such person for the manufacture of goods or provision of services referred to in item (i) of paragraph (e)
of subsection (2) of section 2, for the manufacture of goods to be exported”;
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by the repeal of subparagraph (viii) and (ix)
of paragraph (a);
in the end of that proviso, by the substitution for the words commencing from “The deferment of the payment of tax”
to the end of that paragraph of the following:—
“The deferment of the payment of tax shall be subject to a furnishing of :—
a bank guarantee in a case where the tax deferred is less than rupees ten thousand; or
a Treasury Bill as a guarantee in a case where the tax deferred is not less than rupees ten thousand ; or
a corporate guarantee which covers the amount of tax due subject to the conditions specified in the agreement in which the deferment is considered, on the goods imported, received or purchased:
Provided that, in the case of such deferment under paragraph (b) no guarantee shall be required where such goods have been imported by a Government institution to be re-exported within one month from the date of importation.”.
s 3Amendment of section 3 of the principal enactment
Section 3 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.8 of 2006 is hereby further amended as follows:-
in paragraph (e) of that section by the substitution for the words “under any tender agreement,” of the following:-
“under any tender agreement;
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any person or a partnership having a total supplies for any three months period in any calendar year not less than rupees five hundred million including the supplies under preceding paragraphs of this section and any supplies excluded under section 2 or exempted under PART
II of the First Schedule,”;
by the repeal of the proviso to that section and the substitution therefor of the following:-
“Provided that, such tax shall be charged on such wholesale or retail supply of goods made prior to
January 1, 2013, if –
any registered person makes an application to that effect to the Commissioner-General;
any other person makes an appeal to that effect to the Commissioner-General, and obtains a registration as provided for in section 10
or section 12.”;
by the addition immediately at the end of that proviso of the following new proviso:—
“Provided further, the chargeability to tax referred to any registered person specified in paragraph (f)
shall be other than the supplies exempted from tax as specified in PART II of the First Schedule to the Act.”.
s 4Amendment of section 5 of the principal enactment
Section 5 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.14 of 2007 is hereby further amended in subparagraph (12) thereof by the substitution for the words “a separate supply by such
Assessor:” of the following –
“a separate supply by such Assessor;
Notwithstanding the provisions of Consumer
Affairs Authority Act, No.9 of 2003, the maximum retail price quoted for the goods to be sold in a wholesale or retail business may be adjusted where necessary for the chargeability to tax where liability to tax is specified in paragraph (f) of section 3 of this Act:”.
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s 5Amendment of section 10 of the principal enactment
Section 10 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.15 of 2009 is hereby further amended as follows:—
in item (ii) of subsection (1) of that section, by the substitution for the words and figures “on or after
January 1, 2009 carries on or carries out” of the words and figures “on or after January 1, 2009, but prior to
January 1, 2013 carries on or carries out”;
immediately after paragraph (c) of item (ii) of subsection (1) of that section , by the insertion of the following new item :—
“(iii) on or after January 1,2013 carries on or carries out any taxable activity in 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 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 twelve 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 rupees or in the succeeding twelve months period is likely to exceed twelve million rupees: ”.
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In subsection (2) of that section, by the substitution for the words and figures “shall not include the supplies of any wholesale or retail trading activity excluded from the payment of tax under section 3.” of the words and figures “shall not include the value of supply of goods purchased locally without any process in a wholesale or retail trading activity unless the value of total supplies for a period of three months in one calendar year including the supplies excluded under section 2 or exempted under PART II of the
First Schedule to the Act, is not less than rupees five hundred million.”.
s 6Amendment of section 11 of the principal enactment
Section 11 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.7 of 2003 is hereby further amended in the proviso to subsection (1)
thereof, by the substitution for the words “shall not be liable to notify the Commissioner-General.” of the following:-
“shall not be liable to notify the Commissioner-General:
Provided further, with effect from January 1, 2013, any person registered under section 12, subsection (2) of section 80 or subsection (1) of section 75, as the case may be, of the
Goods and Services Tax Act, No. 34 of 1996 shall be deemed to have obtained an identification number for the clearing of goods where such registered person fulfils the criteria specified in item (iii) of subsection (1) of section 10 or a registered person during the project implementation period as specified in subsection (7) of section 22 of this Act.”.
s 7Amendment of section 12 of the principal enactment
Section 12 of the principal enactment is hereby amended by the substitution for the words “may make an application in the specified form to the Commissioner-General for registration under this Act:” of the words and figures “may make an application for any taxable period prior to January 1, 2013, in the specified form to the Commissioner-General for registration under this Act:”.
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s 8Amendment of section 14 of the principal enactment
Section 14 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.7 of 2003 is hereby further amended by the repeal of subsection (2) thereof and the substitution therefor of the following:-
“(2) Any person –
registered under subsection (1) of this section ; or
deemed to be registered under section 75 or subsection (2) of section 80 of the Goods and
Services Tax Act, No.34 of 1996 on August 1, 2002
and carrying on or carrying out a taxable activity subject to the conditions specified in section 3
for the registration of wholesale and retail trade or fulfilling the requirements specified in item (iii)
of subsection (1) of section 10 of this Act, shall be a registered person for the purposes of this
Act.”.
s 9Amendment of section 16 of the principal enactment
Section 16 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.9 of 2011 is hereby further amended as follows:-
in subsection (1) of that section, by the substitution for the words and figures “does not exceed the value set out in section 10.” of the following:-
“does not exceed the value set out in section 10:
Provided that, any registered person who had had a total value of taxable supplies not exceeding rupees three million for a period of three months and rupees twelve million for a period of twelve months in the year ending as at December 31,
2012, shall request for the cancellation of his registration with effect from January 1, 2013, unless such registered person has reasons to believe that the taxable supplies of such registered person is likely to exceed the value of supplies specified in sub-paragraph (iii) of paragraph (c) of subsection (1) of section 10.”;
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in subsection (5) of that section, by the substitution for the words and figures, “by another person who is a registered person.” of the following:-
“by another person who is a registered person:
Provided that, in the case of a registered person whose registration is cancelled as specified in the proviso to subsection (1) -
where the assets (other than stock in trade)
are not transferred to another registered person at the time immediately prior to the date of cancellation, the Commissioner-General shall taking into consideration the value of the acquisition of the assets and the period of use of such assets based on the rates of depreciation applied for income tax purposes on such assets and other matters as may be relevant, determine the value of assets which are not so transferred.
the liability to stock in trade shall not exceed the unabsorbed input tax as at December 31, 2012.”.
s 10Amendment of section 21 of the principal enactment
Section 21 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.14 of 2007 is hereby amended in subsection (1) thereof, by the substitution for all the words commencing from “(1) Every registered person shall” to the words “to be set out in such form:” of the following:—
“(1) Every registered person shall furnish to the
Commissioner-General –
for any taxable period ending prior to January 1,
2013, not later than the twentieth day of the month after the expiry of each taxable period ;
for any taxable period commencing on or after
January 1, 2013 not later than the last day of the month after the expiry of each taxable period
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a return either in writing or by electronic means of his supplies during that taxable period. Every such return shall be in the specified form and shall contain all such particulars as may be required to be set out in such form.”.
s 11Amendment of section 22 of the principal enactment
Section 22 of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.7 of 2012 is hereby further amended as follows:-
in subsection (1) of that section, by the repeal of the first proviso to that subsection and the substitution therefor of the following :-
“Provided that, the amount of tax due on the supply of –
garments within such percentage as is permitted to sell locally by the Board of
Investment of Sri Lanka, established by the
Board of Investments of Sri Lanka Law, No.
4 of 1978 under any agreement entered into by the manufacturer of garments for export under section 17 of the aforesaid law as approved by the Board of Investment of
Sri Lanka or the Director-General of
Customs , shall be rupees twenty five for each such garment so supplied within Sri Lanka;
fabric including any product as specified in the following sub-paragraphs made out of fabric within such percentage as is permitted to sell locally by the Board of
Investment of Sri Lanka, established by the
Board of Investment of Sri Lanka Law, No.
4 of 1978, under any agreement entered into by the manufacturer of fabric for export under section 17 of the aforesaid law, as approved by the Board of Investment of
Sri Lanka or the Director-General of
Customs shall be at the following rates:—
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“(i) linen or curtains at rupees forty per kilogram;
towels at rupees twenty five per item;
bags made out of fabric at rupees forty per item ;
excess fabric as cut pieces not more than two metres in length of each piece at rupees twenty five per kilogram;
any other fabric at rupees forty per kilogram.”.
in subsection (5) of that section –
in paragraph (e) of the second proviso, by the repeal of all the words commencing from “(e) there is an excess of input tax” to the words “more than fifty per centum”and the substitution therefor of the following:-
“(e) there is an excess of input tax including tax deferred under section 2, of any registered person who is registered with the Simplified
Value Added Tax Scheme administrated by the Commissioner-General referred to in paragraph (e) of subsection (2) of section 2
with effect from April 1, 2011, being a supplier of goods to exporters of goods, referred to in that paragraph for the taxable period was more than fifty per centum.”;
in the third proviso, by the substitution for the words and figures, “in items (i), (ii), (iii) or (iv) of paragraph (e) of subsection (2)”, of the words and figures “in items (i), (ii), (iii), (iv), (v) or (vi ) of paragraph (e) of subsection (2)”;
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in subsection (6) of that section, by the addition immediately after sub-paragraph (iv) of that subsection, the following new sub-paragraph:-
“(v) on any tax invoice issued prior to the commencement of the liability to tax unless such tax invoice is connected to any business approved under subsection (7) of this section”;
by the repeal of paragraph (ii) of the second proviso to subsection (10), and the substitution therefor of the following new paragraph:-
“(ii) supplies on which the tax is differed under this
Act, being supplies made to exporters by a supplier so far as both are registered persons with the
Simplified Value Added Tax Scheme administrated by the Commissioner-General referred to in paragraph (e) of subsection (2) of section 2 subject to the conditions specified in the guidelines specified by the Commissioner-General; and
by the insertion immediately after subsection (10), the following new subsection:-
“(11) Subject to the provisions of subsection (5) of section 16, any unabsorbed balance of the allowable input tax, calculated in terms of the provisions of this section, as at December 31,
2012, not claimable after January 1, 2013, due to the cancelation of the registration of any registered person whose total supplies does not exceed rupees three million for a period of three months and rupees twelve million per year in the year commencing from January 1, 2012
and ending on December 31, 2012, may be set off against the taxes administrated by the
Commissioner-General on a request made in writing to the Commissioner-General for such purpose:
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Provided that, the tax under this subsection shall be set off after the finalization of the liability on the cancellation of the registration with the approval of the Commissioner-General.”.
s 12Amendment of section 25A of the principal enactment
Section 25A of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.7 of 2012 is hereby further amended as follows:-
in paragraph (iv) of subsection (1) of that section, by the substitution for the words and figures
“commencing on or after January 1, 2009:” of the words
“commencing on or after January 1, 2009, or the Central
Bank of Sri Lanka established by the Monetary Law
Act, (Chapter 422) (with effect from July 1, 2003):”
by the repeal of subsection (2) of that section and the substitution therefor of the following:-
“(2) Every specified Institution or other person, carrying on the business of supplying of any financial services in Sri Lanka, shall be required to be registered :-
where the value of such supply for a period of three months exceeds five hundred thousand rupees or for a period of twelve months one million eight hundred thousand rupees, as the case may be, if such registration has taken place for any period prior to January 1, 2013;
where the value of such supply for a period of three months exceeds three million rupees or for a period of twelve months exceeds twelve million rupees, as the case may be, if such registration has taken place for any period on or after January 1, 2013.”.
by the repeal of subsection (3) of that section and the substitution therefor of the following:-
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“(3) Every specified institution or other person required to be registered under subsection (2), shall make an application for registration in the specified form to the Commissioner-General not later than thirty days from the date of completion of the requirements specified in subsection (2):
Provided that, any institution registered under this
Act and which is also a specified institution within the meaning of this Chapter, shall be deemed for all purposes to be a specified institution registered under this Chapter:
Provided further, the Commissioner-General shall register any person who has not made an application for registration under this Chapter if the Commissioner-General having regard to the nature of the activities carried on or carried out by such person, is of opinion that such person is required to be registered under this Chapter. In the circumstances such person shall be afforded an opportunity of being heard prior to being registered under this Chapter and register such person accordingly with effect from such date as may be determined by the Commissioner-General.”.
by the addition immediately after subsection (4) thereof, of the following new subsection:-
“(5) Every registered person shall notify the
Commissioner-General in writing of any change –
in the name, address and place at which any taxable activity is carried on or carried out by such person;
in the nature of the taxable activity carried on or carried out by such person;
in the person authorized to sign returns and other documents; and
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in ownership of the taxable activity, not later than fourteen days after the occurrence of such change.”.
s 13Amendment of section 25B of the principal enactment
Section 25B of the principal enactment is hereby amended in subsection (1) thereof by the repeal of paragraph (b) and the substitution therefor of the following:-
“(b) six months for any taxable period commencing on or after January 1, 2011:
Provided that, in the case of a specified institution or any other person whose accounts are made up for a twelve months period ending on the 31st day of March the six months period may be commenced on the 1stday of April and the 1st day of September for that period of twelve months. In such event a separate return for the period commencing from the 1stday of January to the 31st day of March shall be submitted at the time of such change with the approval of the Commissioner-General.”.
s 14Amendment of section 25C of the principal enactment
Section 25C of the principal enactment as last amended by the Value Added Tax (Amendment) Act, No.9 of 2011 is hereby further amended as follows:-
in subsection (1) of that section -
by the substitution in the proviso to that subsection, for the words “The estimated amounts shall be adjusted to reflect the actual amount on half yearly basis.” of the words “The estimated amounts shall be adjusted to reflect the actual amounts with the audited statement of accounts on yearly basis and such adjustment shall be submitted within six months after the closing date of the relevant accounting period.
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by the repeal of paragraph (a) and substitute the following :—
“(a) in the case of specified employees under
Chapter XIV of the Inland Revenue Act, No.
10 of 2006, the gross remuneration payable to such employees and reflected in the pay sheet maintained under section 119 of the
Inland Revenue Act, No.10 of 2006;” and
in subsection (2) of that section, by the substitution for the words and figures “under section 110 of the
Inland Revenue Act, No. 38 of 2000.” of the words and figures “under section 119 of the Inland Revenue Act,
No. 10 of 2006.”.
in subsection (5) of that section –
by the substitution in paragraph (a) thereof, for the words and figures “under item (xi) of the First
Schedule but taxable under this Chapter;” of the words and figures “under item (x) of paragraph (b) of PART II of the First Schedule but taxable under this Chapter;”;
by the substitution in paragraph (d) thereof, for the words “(d) the profit or income on interest arising or accrued from inter-company transactions” of the words “(d) the profit or income (not being profit from a business) on interest arising or accrued from inter-company transactions”;
by the substitution in paragraph (f) thereof, for the words “(f) the dividend income arising to any person,” of the words “(f) the dividend income
(not being profit from a business) arising to a person,”;
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by the repeal of paragraph (h) thereof and the substitution therefor of the following :—
“(h)
the profits or income (not being profits from a business) from the exchange of currency other than such profits or income arising or accruing to any person primarily engaged in the business or exchange of currency or any “specified institution” within the meaning of this Chapter or a person not registered with the Central Bank of Sri Lanka, but providing services similar to such services provided by a finance company, included in the profit calculated as specified in subsection (1) of this section shall be treated as zero.”;
by the repeal of subsection (8) thereof and the substitution therefor, of the following:-
“(8) Every specified institution or any other person shall for the purpose of the calculation of tax, submission of returns and information to be furnished relating to such return, payments of tax, issue of assessments, imposition of penalty for non-submission of the returns or the information required for the purpose of this Chapter, follow –
the guidelines specified by the Commissioner-General; and
the relevant guidelines specified in the Order published in the Gazette, having considered the uniform application of the calculation of the liability and any other matter specified in the guideline provisions of this Chapter.”.
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s 15Amendment of section 25D of the principal enactment
Section 25D of the principal enactment as last amended by the Value Added Tax Act, No.8 of 2006 is hereby further amended by the substitution for the words “any registered specified institution” of the words “any registered specified institution or other person”.
s 16Amendment of section 25H of the principal enactment
Section 25H of the principal enactment is hereby amended in paragraph (b) of subsection (1), by the substitution for the words and figures “every quarter commencing on
January 1, 2011.” of the words and figures “every quarter commencing on January 1, 2011 and ending on December 31,
2012,”.
s 17Amendment of section 25I of the principal enactment
Section 25I of the principal enactment as last amended by the Value Added Tax (Amendment)Act, No.9 of 2011 is hereby further amended as follows:-
in subsection (1) of that section :—
by the substitution for the words, “referred to in subsection (2), may apply for registration” , of the words and figures “referred to in subsection (2), may prior to December 31, 2012 apply for registration”;
in paragraph (b) of subsection (1), by the substitution for the words and figures “ shall be valid for a period of twelve years from the date of commencement of the quarter” of the words and figures “shall be valid for any quarter ending prior to January 1, 2013 from the date of commencement of the quarter”;
by the addition immediately after paragraph (b) of that subsection, the following new paragraph :-
“(c) Any registration obtained under this
Chapter shall be treated as cancelled with effect from the period commencing from
January 1, 2013:
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Provided that, any person or partnership registered under this Chapter whose turnover exceeds rupees twelve million per year and fulfils the criteria for registration under section 10 shall obtain a registration accordingly.”.