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") is hereby amended as follows :-

(1)

in subsection (1) of that section-

(a)

by the repeal of sub-paragraph (iv) (b) thereof and the substitution therefor of the following :-

"(b) (i) for the period commencing on August 2,

2005 and ending on September 30, 2005, at the rate of twenty percentum (Luxury

Rate) of which the tax fraction is 1/6;

(ii)

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

November 23, 2010, in respect of goods at the rate of twenty percentum (Luxury

Rate) of which the tax fraction is 1/6;

(iii)

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

December 31, 2010, in respect of services at the rate of twenty percentum (Luxury

Rate) which the tax fraction is 1/6;

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on the value of such goods or services supplied as referred to in the Fourth Schedule, other than such goods chargeable with the tax at zero percentum;

(b)

in sub-paragraph (v) of that subsection-

(i)

in item (ii) thereof, by the substitution for the words and figures "commencing on or after January 1, 2009" of the words and figures "commencing on or after January 1, 2009 and ending on December 31,

2010"; and

(ii)

by the addition, immediately after item (ii)

thereof, the following new item :-

"(iii) for the period commencing on

November 23, 2010 and ending on

December 31, 2010, and for any taxable period commencing on or after

January 1, 2011, at the rate of twelve per centum (of which the tax fraction is 3/28) on the value of such goods or services supplied, or goods imported, other than goods or services chargeable with tax at Zero percentum.".

(2)

in subsection (2) of that section-

(a)

in sub-paragraph (iv) of paragraph (c) thereof, by the substitution for all the words from "until such time as the activities" to the end of that sub-paragraph of the following :-

"until such time as the activities of such garment manufacture or service provider are carried out in the manner stipulated by the

Commissioner-General in the guidelines issued for this purpose, on the submission of the reconciliation relating to -

(a)

the disposal of such goods, stating that such finished goods have in fact been

Act, No. 9 of 2011

exported by the recipient of the supplies; or

(b)

the supply of value added services, stating that such services have in fact been used for the manufacture of garments which have been exported:

Provided that, with effect from April 1,

2011, deferment of tax under this paragraph shall be administrated by the Commissioner-General.";

(b)

in sub-paragraph (d) thereof, by the substitution for all the words from "until such time as the activities" to the end of that sub-paragraph, of the following :-

"until such time as the activities of such manufacture of goods or service provider are carried out in the manner stipulated by the

Commissioner-General of Inland Revenue in the guidelines issued for this purpose, on the submission of the reconciliation relating to -

(a)

the disposal of such goods, stating that such finished goods have in fact been exported by the recipient of the supplies; or

(b)

the supply of value added services, stating that such services have in fact been used for the manufacture of goods which have been exported:

Provided that, with effect from April 1,

2011, deferment of tax under this paragraph shall be administrated by the Commissioner-General.";

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(c)

by the addition immediately after sub-paragraph (d) thereof the following new paragraph :-

"(e) on the supply of goods or services other than the goods or services referred to in sub-paragraphs (c) or (d), the Commissioner

- General may after affording the applicant who is a registered person, an opportunity of being heard, and having regard to the nature of the business carried on or carried out by such applicant, defer the payment of tax, subject to the conditions stipulated by the Commissioner - General in the guidelines issued for this purpose, in respect of supplies made to :-

(i)

a registered person engaged in any specific project referred to in sub paragraph (ii) of paragraph (f) of

PART II of the First Schedule;

(ii)

an exporter or to a manufacturer who supplies goods manufactured in Sri

Lanka to an exporter;

(iii)

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;

(iv)

any person registered under the provisions of subsection (7) of section 22 of the Act, during the project implementation period so far as such supplies are project related supplies until such time as the activities of such suppliers of goods or providers of service are carried out as stipulated by the

Commissioner-General in the guidelines

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issued by him for this purpose, and on the submission of the reconciliation relating thereto, stating that such goods or services are in fact made to a registered person referred to in this sub-paragraph and such goods or services are utilized for the purposes of such specified activities.".

Read on from s 3