7. Amendment of section 22 of the principal enactment

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

Section 22 of the principal enactment is hereby amended as follows:-

(1)

in subsection (3) of that section-

(a)

by the substitution for the words “which tax can be levied” wherever such words appear, of the words and figures “which tax can be levied other than any tax levied under Chapter

IIIA of the Act”;

(b)

by the repeal of the fourth proviso to that subsection and the replacement therefor of the following proviso:-

“Provided further, any input tax paid on the purchase of goods or services specified in the Fourth Schedule (Luxury rate) by any person which is allowable under this Act shall be restricted to fifteen per centum. “.

(2)

in paragraph (d) of the second proviso to subsection (5), by the substitution for all the words and figures from “such deferred tax under section 2,” to the words

“whichever is later:” of the words and figures –

“such deferred tax under section 2;

(e)

there is an excess of input tax including tax deferred under section 2 of any registered person who is registered with the Textile Quota

Board being a supplier of goods or services to any registered person referred to in paragraph (c) of subsection (2) of section 2 or any registered person who is registered with the

Export Development Board being a supplier of goods to exporters of goods, referred to in paragraph (d) of subsection (2) of section 2

the value of supplies to suppliers referred to in paragraph (c) or (d) for the taxable period was more than fifty per centum of his total taxable supplies for that taxable period, such part of the excess or such excess as the case may be, including any excess brought forward from any taxable period under this Act or under the Goods and Services Tax Act, No.34 of 1996 for any taxable period ending on or before July 31, 2002, shall be refunded, subject to the provisions of section 58 in the following manner-

(a)

if the excess is in respect of the taxable period commencing on or after August 1, 2002 but ending prior to January 01, 2006, such excess shall be refunded not later than one month after the end of the taxable period or from the date of receipt of the return for such taxable period whichever is later;

(b)

if the excess is in respect of a taxable period commencing on or after January 1, 2006 –

(i)

the excess shall be refunded to a registered person referred to in paragraphs (c), (d) or (e), not later than fifteen days after the end of the taxable period or from the date of receipt of the return for the taxable period whichever is later, provided such refund is subject to the furnishing of a bank guarantee or an insurance bond by the registered person, which is valid for a period of three months; and

(ii)

the excess shall in all other cases be refunded not later than forty-five days after the end of taxable period or from the date of receipt of the return for the relevant taxable period whichever is later:”;

(3)

in subsection (6) of that section by the addition immediately after paragraph (iv) thereof, of the following:-

“For the avoidance of doubt it is hereby declared that for the purpose of this subsection, where the return has not been furnished, the input tax shall be deemed not to have been deducted from the output tax.”.

Read on from s 8