As enacted

Contents

2. Amendment of section 2 of the Value Added Tax Act…

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

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:—

(1)

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”;

(2)

in subsection (2) of that section:-

(a)

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;

(b)

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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(c)

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 -

(i)

any exporter or provider of zero rated services specified in terms of section 7;

(ii)

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;

(iii)

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);

(iv)

any manufacturer who supplies goods manufactured in Sri Lanka to any exporter;

(v)

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;

(vi)

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;

(vii)

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.

(3)

in subsection (3) of that section:—

(a)

the first proviso to that subsection is amended as follows:-

(i)

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;”;

(ii)

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.”;

(b)

the second proviso to that subsection is amended as follows:—

(i)

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”;

(ii)

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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(iii)

by the repeal of subparagraph (viii) and (ix)

of paragraph (a);

(iv)

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)

a bank guarantee in a case where the tax deferred is less than rupees ten thousand; or

(b)

a Treasury Bill as a guarantee in a case where the tax deferred is not less than rupees ten thousand ; or

(c)

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.”.

Read on from s 3