As enacted

Contents

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.

Section 2 of the Value Added Tax Act, No. 14 of 2002

(hereinafter referred to as the “principal enactment”) is hereby amended as follows :—

(1)

in subsection (1) of that section —

(a)

by the substitution for the words “as the case may be-” of the words “as the case may be, subject to the provisions of section 2A, at the following rates :—”;

(b)

in subparagraph (ii) of that subsection—

(1)

by the substitution for the words “for any taxable period commencing on or after

January 1, 2004” of the words “for any taxable period commencing on or after

January 1, 2004 and ending on or before —

(a)

November 18, 2004 in respect of goods specified in the Third

Schedule ; and

(b)

December 31, 2004 in respect of goods for which the Third Schedule does not apply.”.

(2)

by the substitution for the words “at zero per centum.” of the words “at zero per centum;”;

(c)

by the addition immediately after sub-paragraph (ii) of that subsection of the following new sub-paragraphs :—

“(iii)

for the period commencing on

November 19, 2004 and ending on or before December 31, 2004 and for any taxable period commencing on or after

January 1, 2005 at the rate of five per centum (Basic Rate ) (of which tax fraction is 1/21) on the value of such goods supplied or imported as referred to in the Third Schedule other than such goods chargeable with tax at zero per centum ;

(iv)

for any taxable period commencing on or after January 1, 2005 at the rate of eighteen per centum (Luxury Rate) (of which Tax Fraction is 9/59, on the value of such goods or services supplied or goods imported as referred to in the

Fourth Schedule other than such goods or services chargeable with tax at zero per centum ; and

(v)

for any taxable period commencing on or after January1, 2005 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 Third

Schedule or the Fourth Schedule of this

Act.

(2)

in subsection (2) of that section —

(a)

in paragraph (a) of that subsection by the substitution for the words “on any tea supplied by” of the words “on any tea supplied prior to

January 1, 2005 by”;

(b)

in paragraph (b) of that subsection by the substitution for the word “supplies.” of the words “supplies ;”;

(c)

by the addition immediately after paragraph (b) of that subsection of the following new paragraphs :—

“(c) (i) on the supply with the approval of the Textile Quota Board established by the Textile Quota Board Act, No.

33 of 1996, of any goods manufactured in Sri Lanka by such supplier to be utilized for the purpose of manufacture of garments for export either by manufacturers who are registered with the Textile Quota

Board or through Export Trading

Houses registered with the Board of

Investment of Sri Lanka; or

(ii)

on the supply of finished garments manufactured in Sri Lanka by such supplier with the approval of the

Textile Quota Board established by the Textile Quota Board Act, No. 33

of 1996, to be exported through

Export Trading Houses registered with the Board of Investment of Sri

Lanka under section 17 of the Board of Investment of Sri Lanka Law No.

4 of 1978, until such time as the activities of such garment manufacturers are monitored by the Textile Quota

Board and the Textile Quota 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 goods are in fact exported by the recipient of the supplies.

(d)

on the supply with the approval of the Export

Development Board, established by the Sri

Lanka Export Development Act, No. 40 of 1979 with the concurrence of the Ministry of the Minister in charge of the subject of

Finance of any goods manufactured in Sri

Lanka by such suppliers to be utilized for the purpose of manufacture of goods other than the goods referred to in paragraph (c) of this subsection by manufactures who are registered with the Export Development Board as exporters, until such time as the activities of such manufacturers 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 qurterly basis as stipulated by the

Commissioner-General to the satisfaction of the Commissioner-General, that such furnished goods are in fact exported by the recipient of the supplies.

(3)

in subsection (3) of that section —

(a)

in paragraph (e) thereof, by the substitution for the words “on or before December 31,

2002:” of the following words “on or before

December 31, 2002;”; and

(b)

by the addition immediately after paragraph (e) of that subsection of the following new paragraph :—

(f)

any fabric or accessories imported by any person for the purpose of manufacture of garments for export, 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 and under the supervision of the

Director-General of Customs or the

Board of Investment as the case may be.”.

Read on from s 3