As enacted

Contents

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

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) by the substitution, for sub-paragraph (iv) of the following:-

“(iv) (a)

for any taxable period commencing on or after January 1, 2005 but prior to July 01, 2005 and for the period July 1, 2005

to August 1, 2005 at the rate of eighteen per centum (Luxury Rate) of which the

Tax Fraction is 9/59; and

(b)

for the period commencing on August 2, 2005 and ending on September 30,

2005 and for any taxable period commencing on or after October 1, 2005

at the rate of twenty per centum

(Luxury Rate) of which the Tax Fraction is 1/6, 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 the tax at zero per centum ; and”.

(2)

in sub-paragraph (ii) of paragraph (c) of subsection (2), by the substitution for the words and figures

“the Board of Investment of Sri Lanka. Law, No.4 of 1978,” of the words and figures “the Board of

Investment of Sri Lanka Law, No.4 of 1978; or”;

(3)

by the substitution in subsection (2) for all the words from “Board of Investment of Sri Lanka Law No.4 of 1978” to the words “by the recipient of the supplies.”

of the following:-

“(iii)

on the supply of garments by a manufacturer approved by the Textile Quota Board established under the Textile Quota Board Act,

No. 33 of 1996 being garments manufactured from fabric supplied by an exporter of garments registered with the Textile Quota

Board who exports directly or through an

Export Trading House which has entered into an agreement under section 17 of the Board of Investment of Sri Lanka Law, No.4 of 1978, with the Board of Investment of Sri Lanka established under the aforesaid Law; or

(iv)

on the supply of any service which results in the improvement of the quality, character or value of any garment manufactured by any manufacturer of garments for export either directly or through any Export Trading House which has entered into an agreement with the

Board of Investment of Sri Lanka under section 17 of the Board of Investment of Sri

Lanka Law, No.4 of 1978, being a supply made by any supplier approved by the Textile Quota

Board established under the Textile Quota

Board Act, No.33 of 1996, until such time as the activities of such garment manufacturer or service provider is monitored by the Textile Quota Board and the Textile Quota Board furnishes to the satisfaction of the Commissioner-General, the reconciliation on the disposal of such goods on a quarterly basis as stipulated by the

Commissioner-General stating that such finished goods are in fact exported by the recipient of the supplies.”;

(4)

in the second proviso to subsection (3)-

(a)

by the addition, immediately after sub-paragraph (iv) of paragraph (a) of that subsection, of the following:-

“(v)

any plant or machinery imported, including any plant or machinery received from a customs bonded area, by a registered person who imports or receives such plant or machinery for the usage by such person for the manufacture of goods to be exported by such person;

(vi)

any goods imported, including any goods received from customs bonded area, by a registered supplier approved by the Textile Quota Board referred to in paragraph (c) of subsection (2) of section 2 who imports or receives such goods for the manufacture of goods or the provision of services to a manufacturer of garments for export, registered with the Textile Quota Board established under the Textile Quota

Board Act, No.33 of 1996, under the VAT deferment scheme;

(vii)

any plant or machinery imported including any plant or machinery received from a customs bonded area by a registered person approved by the

Textile Quota Board referred to in paragraph (c) of subsection (2) of section 2 who imports or receives such plant or machinery for the usage by such person for the manufacture of goods or supply of services referred to in paragraph (c) of subsection (2) of section 2 for manufacture of goods to be exported;

(viii)

any goods imported including any goods received from customs bonded area, by a registered supplier approved by the Export Development Board referred to in paragraph (d) of subsection (2) of section 2 who imports or receives such goods for the manufacture for such supply;

(ix)

any plant or machinery imported including any plant or machinery received from a customs bonded area by a registered person approved by the

Export Development Board, referred to in paragraph (d) of subsection (2) of section 2, who imports or receives such plant or machinery for the usage by such person for the manufacture of goods referred to in paragraph (d) of subsection (2) of section 2 for manufacture of goods to be exported.”;

(b)

in paragraph (c) of the second proviso of that subsection, by the substitution for the words and figures “any ship imported on or after

January 1, 2003”, of the words and figures

“any ship imported on or after January 1, 2003

but prior to November 16, 2005,”.

Read on from s 3