Finance (Amendment) Act 1981

The following new section is hereby inserted immedi-section 119A in the Finance Act No. 11 of 1963.

ately after section 119, and shall have effect as section 119a, of the Finance Act, No, 11 of 1963 (hereinafter referred to as “the principal enactment”) :—

‘Recovery of business turnover tax not to be

‘fvivalid ‘by reason only of non-Pepistration

-of-hotels 4nd” guest houses.

1194.

Any recovery of business turn-over tax for any period commencing on

‘Every ‘reférerite to “the business of opérating a hotel or a guest house registered with the Ceylon Tourist Board ” in a relevant

be deemed to have complied with the provisions of. section 123 if he

be deemed not to be in default on the payment of business turnover tax under section 122 in respect of such business for such period if he pays the total amount of such tax within the aforesaid thirty days, and where he fails to pay the total amount of such tax within the aforesaid thirty days, such amount shall be deemed to be in default and the provisions of this Part of this Act relating to the recovery of business turnover tax in default shall accordingly apply to the recovery of such amount.

Where at the hearing in any court or tribunal, of any appeal, action, application or other proceeding (whether such appeal, action, application or proceeding was pre-ferred or instituted before or after the date of coming into operation of this Part of this

In this section “relevant Order”

Gazette No. 118/12 of November 5,

Gazette No. 291/9 of November 15, wi.

Section 120 of the principal enactment, as last amended by Act No. 29 of 19380, is hereby further amended in paragraph (¢) of subsection (8) of that section, by the substitution for sub-paragraph (vy) of that paragraph,”

of the following sub-paragraph :—

“(v) the business of any bank to the extent of its transactions attributable to the operation of the foreigh currency banking unit of such bank ;”.

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The following new section is hereby inserted immedi-ately after section 137, and shall have effect as section 137a, of the principal enactment :—

‘Deduction of turnover tax from payments.

1374, (1) Every person who makes any payment in pursuance of a contract to which he is a party or on behalf of any other person who is a party to a contract shall, whether or not such contract was entered into before the coming into operation of this section, deduct from such payment, business turnover tax which shall be a percentage of such payment at a rate to be prescribed by the Minister by Order published in the

Gazette and the amount of tax so deducted shall be a debt due from such person to the

Republic and shall be recoverable forthwith or may be assessed and charged upon such person in addition to any business turnover tax if any payable by him under this Part of this Act:

Provided that where the total considera-tion payable for the performance of such contract does not exceed five hundred thousand rupees no such deduction shall be made,

Any person who deducts business turn-over tax in accordance with the provisions of sub-section (1) shall—

issue to the person from whose pay-ment the deduction is made a statement showing—

the gross amount of such pay-ment

the rate and amount of tax so deducted

the net amount actually paid

remit within seven days of making such deduction the sum so deducted to the

the name and address of the person to whom the payment was made;

the gross amount of. such pay-ment;

the rate and amount of tax So deducted

the net amount actually paid.

Where the turnover of a person includes a sum from which business turnover tax has been deducted in accordance with sub-section (1), he shall be entitled on produc-tion of a statement relating to such sum issued in accordance with subsection (2) a set-off against the tax payable by him of the amount shown on such statement as the amount of tax deducted.

For the purposes of this section

any contract in respect. of. construction work of whatever nature

any contract for the supply of goods or services in respect of any con-tract specified in paragraph (i) ;

any sub-contract in respect of any contract specified in paragraph (i)

Any person who fails to deduct business turnover tax in terms of subsection (1) or fails to remit under subsection (2)

Any person who has made any deduc-tion under subsection (1) or any remittance in pursuance of subsection (2) shall be deemed to have acted under the authority of the person by whom the tax was payable and of all other persons concerned, and is hereby indemnified in respect of such deduc-tion or remittance, as the case may be,

Where any person has entered into two or more contracts and the Assessor, having regard to the nature and the parties to such contracts, is of opinion that the recipient of the payments made in respect of such contracts by such person is one and the same person or his. agent, the sum paid or payable shall be aggregated for the purposes. of. subsection. (1).’.

Section 159 of the principal enactment (as last Amendment amended by Act No. 26 of 1978) is hereby further amended of the in sub-section (1) of that section by the substitution, for the principal |

definition of “turnover ”, of the following new definition :—-

:

‘turnover ”, in-relation to. any business, means the total amount. received

: or. receivable from transactions entered into in respect of. that business or for services "performed in carrying on that business and ineludes—

in the case of.a bank, the receipts of such bank by. way. of or on. account of, interest, discounts, dividends,. exchange, service charges, commissions, brokerage and any other income. derived by such bank in the course of its business or otherwise but shall not include receipts attributable to the operation of the foreign currency banking unit of such bank.

in the case of a findncier, money-lender or pawnbroker, the moneys given out by him as loans, the interest received or receivable by him on such loans and the sums received by him as fees or other charges in respect of such: loans

in the case of an auctioneer and, subject to the provisions of paragraph (d), in the case of a broker or a commission agent—

in the case of any broker (other than a share broker or a produce broker), or commission agent, who—

in the case of a person carrying on any educational establishment or school, the total amount, excluding profits from investment of the moneys of the educational establish-