ACT, No. 12 OF 2013

12of2013.pdf
NadunReplacecont

PARLIAMENT OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
FINANCE ACT, No. 12 OF 2013
[Certified on 23rd April, 2013]
Printed on the Order of Government
Published as a Supplement to Part II of the Gazette of the Democratic
Socialist Republic of Sri Lanka of April 26, 2013
PRINTEDATTHE DEPARTMENTOFGOVERNMENTPRINTING,SRILANKA
TO BEPURCHASED AT THE GOVERNMENT PUBLICATIONS BUREAU, COLOMBO 5
Price : Rs. 10.00 Postage : Rs. 10.00

Finance Act, No. 12 of 2013 1
[Certified on 23rd April, 2013]
L.D.—O. 5/ 2013.
ANACT TO AMEND THE FINANCE ACT, NO. 16 OF 1995, THE FINANCE
ACT, NO. 25 OF 2003 AND THE FINANCE ACT, NO. 12 OF 2012;
TO PROVIDE FOR THE IMPOSITION OF ACROP INSURANCE LEVY; AND
TO PROVIDE FOR MATTERS CONNECTED THEREWITH AND INCIDENTAL
THERETO.
BE it enacted by the Parliament of the Democratic Socialist
Republic of Sri Lanka as follows :-
1. This Act may be cited as the Finance Act, No.12 of Short title.
2013.
PART I
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 16 OF 1995
2. The Finance Act, No. 16 of 1995 (hereinafter in this Amendment of
section 5 of Act,
Part referred to as the “ principal enactment”) is hereby
No.16 of 1995.
amended, in section 5 thereof by the insertion immediately
after subsection (1) thereof of the following subsection:-
“(1A) Notwithstanding the preceding provisions
of this section such semi- luxury dual purpose motor
vehicle levy shall not be charged, with effect from
January 1, 2013, in respect of a light truck registered
as a dual purpose vehicle under the Motor Traffic
Act (Chapter 203) .”.
3. Section 17 of the principal enactment is hereby Amendment of
amended, as follows :– section 17 of the
principal enactment.
(1) by the insertion immediately after the definition of
the expression“diesel motor vehicle” of the
following definition :-
“ “dual purpose vehicle” shall have the same
meaning assigned to it under the Motor
Traffic Act (Chapter 203);”;
2—PL 007089—4,090 (03/2013)
2 Finance Act, No. 12 of 2013
(2) by the insertion immediately after the definition of
the expression “luxury motor vehicle” of the
following definition :-
“ “ light truck” means a dual purpose vehicle with
a driver’s compartment having a single row
accommodation along the same transverse
axis for the driver and passenger, adapted or
constructed wholly or mainly for the purpose
of carriage of goods;”;
(3) by the repeal of the definition of the expression
“semi- luxury dual purpose motor vehicle”
and substitution therefor of the following
definition:-
“ “semi- luxury dual purpose motor vehicle” means
a luxury motor vehicle or semi- luxury motor
vehicle which is registered as a dual
purpose vehicle under the Motor Traffic Act
(Chapter 203); ”.
Validation. 4. Any person or body of persons who charged or
collected the semi-luxury dual purpose motor vehicle levy,
in respect of a light truck, as provided for in the principal
enactment during the period commencing from January 1,
2013 and ending on the date on which the certificate of the
Speaker is endorsed in respect of this Act, shall be deemed
to have acted with due authority and such charge or
collection shall be deemed to have been validly made:
Provided that the aforesaid provisions shall not affect
any decision or Order made by any court or any proceedings
pending in any court in respect of such levy charged or
collected during such period.
Finance Act, No. 12 of 2013 3
PART II
AMENDMENT OF PART II OF THE FINANCE
ACT, NO. 25 OF 2003
5. Part II (Tourism Development Levy) of the Finance Amendment of
Act, No. 25 of 2003 is hereby amended in section 11, by the section11 of
Part II of Act,
substitution for the words “Sales Agents licensed under No. 25 of 2003.
Tourism Development Act, No. 14 of 1968.” of the following
words:-
“Sales Agents licensed under Tourism Development
Act, No. 14 of 1968:
Provided further , such levy shall not be charged
on any institution having an annual turnover not
exceeding rupees twelve million or a quarterly
turnover not exceeding rupees three million.”.
PART III
AMENDMENT OF PART IV OF THE FINANCE
ACT, NO. 12 OF 2012
6. The heading of Part IV of the Finance Act, No. 12 of Amendment of
2012 (hereinafter in this Part referred to as the “principal the Heading of
Part IV of Act
enactment”) is hereby repealed and the following heading No.12 of 2012.
substituted therefor:-
“EXEMPTION OF CERTAIN ENTERPRISES FROM THE
APPLICATION OF THE PROVISIONS OF CERTAIN
ACTS”.
7. Section 16 of the principal enactment is hereby Amendment of
amended in subsection (2), by the repeal of paragraph (a) section 16 of the
principal
thereof, and the substitution therefor of the following enactment.
paragraph:-
“(a) shall carry out such activities either in a Free Port
or a Bonded Area declared by regulations under
this Act ;” .
4 Finance Act, No. 12 of 2013
Amendment of 8. Section 17 of the principal enactment is hereby
section 17 of the amended in subsection (2), by the repeal of paragraph (a)
principal
thereof, and the substitution therefor of the following
enactment.
paragraph:-
“(a) shall carry out such activities either in a Free
Port or a Bonded Area declared by regulations
under this Act ;” .
Amendment of 9. Section 18 of the principal enactment is hereby
section 18 of the amended in subsection (2), by the repeal of paragraph (a)
principal
thereof, and the substitution therefor of the following
enactment.
paragraph:-
“(a) shall carry out such activities either in a Free
Port or a Bonded Area declared by regulations
under this Act ;” .
Insertion of 10. The following sections are hereby inserted
sections 18A, 18B immediately after section 18 of the principal enactment and
and 18C in the
shall have effect as sections 18A, 18B and 18C thereof:-
principal
enactment.
“Granting 18A. (1) Subject to the provisions of
exemption to
subsections (2) and (3), there shall be exempted,
certain
enterprises from the application of the provisions of the
from the Acts referred to in the Schedule hereto, any
application enterprise engaged in any one or more of the
of the following businesses, within the meaning of
provisions of
an agreement entered into with the Board of
certain Acts.
Investment of Sri Lanka, under the Board of
Investment of Sri Lanka Law, No. 4 of 1978-
(a) entrepot trade involving import, minor
processing and re- export;
(b) off-shore business where goods can be
procured from one country or
manufactured in one country and
shipped to another country without
bringing the same into Sri Lanka;
(c) providing front end services to clients
abroad;
Finance Act, No. 12 of 2013 5
(d) headquarters operations of leading
buyers for management of finance
supply chain and billing operations;
(e) logistic services such as bonded
warehouse or multi- country
consolidation in Sri Lanka.
(2) Any enterprise referred to in subsection
(1) which is engaged in the physical
importation of goods, wares or merchandise
for re- export shall,
(a) carry out such activities either in a Free
Port or a Bonded Area declared by
regulations under this Act ;
(b) notwithstanding the provisions of
subsection (1), be subject to the
provisions of the Customs Ordinance,
in any movement of goods to and from
such Free Port or the Bonded Area , to
and from the Sri Lankan territory as if
such goods had been imported into Sri
Lanka or exported from Sri Lanka, as
the case may be .
(3) Any enterprise referred to in subsection
(1), which is not engaged in physical movement
of goods, wares or merchandise, may carry out
such operations outside a Free Port or a Bonded
Area as referred to above.
Extending 18B. (1) Any new enterprise established on
the or after the date of the coming into operation
application of
the of this Act, which is engaged in any one or
provisions of more of the following businesses, within the
the Inland meaning of an agreement entered into with the
Revenue Act,
No. 10 of Board of Investment of Sri Lanka, under the
2006 to Board of Investment of Sri Lanka Law, No. 4 of
certain 1978, shall be eligible, subject to the provisions
enterprises.
of subsections (2) and (3), for the exemptions
6 Finance Act, No. 12 of 2013
granted under the relevant sections of the
Inland Revenue Act, No. 10 of 2006, if such
enterprise satisfies the requirements specified
in the relevant section by which the exemption
applicable is granted–
(a) entrepot trade involving import, minor
processing and re- export;
(b) off-shore business where goods can be
procured from one country or
manufactured in one country and
shipped to another country without
bringing the same into Sri Lanka;
(c) providing front end services to clients
abroad;
(d) headquarters operations of leading
buyers for management of finance
supply chain and billing operations;
(e) logistic services such as bonded
warehouse or multi- country
consolidation in Sri Lanka.
(2) Any new enterprise referred to in
subsection (1) which is engaged in the physical
importation of goods, wares or merchandise
for re- export shall, –
(a) carry out such activities either in a Free
Port or a Bonded Area declared by
regulations under this Act;
(b) notwithstanding the provisions of
subsection (1), be subject to the
provisions of the Customs Ordinance,
in any movement of goods to and from
such Free Port or the Bonded Area , to

Finance Act, No. 12 of 2013 7
and from the Sri Lankan territory as
if such goods had been imported into
Sri Lanka or exported from Sri Lanka,
as the case may be.
(3) Any new enterprise referred to in
subsection (1), which is not engaged in physical
movement of goods, wares or merchandise, may
carry out such operations outside a Free Port or
a Bonded Area as referred to above.
Extending 18C. (1) Any new enterprise established on
the
or after the date of coming into operation of
application
of provisions this Act, and identified as a Strategic
of the Development Project in terms of the provisions
Strategic
of section 3 of the Strategic Development
Development
Projects Act, Projects Act, No. 14 of 2008, which is engaged
No. 14 of in any one or more of the following businesses,
2008 to
certain within the meaning of an agreement entered
enterprises. into with the Board of Investment of Sri Lanka,
under the Board of Investment of Sri Lanka
Law, No. 4 of 1978, shall be eligible, subject
to the provisions of subsections (2) and (3), for
the exemptions granted under the Strategic
Development Projects Act, No. 14 of 2008 –
(a) entrepot trade involving import, minor
processing and re- export;
(b) off-shore business where goods can be
procured from one country or
manufactured in one country and
shipped to another country without
bringing the same into Sri Lanka;
(c) providing front end services to clients
abroad;
8 Finance Act, No. 12 of 2013
(d) headquarters operations of leading
buyers for management of finance
supply chain and billing operations;
(e) logistic services such as bonded
warehouse or multi – country
consolidation in Sri Lanka.
(2) Any new enterprise referred to in
subsection (1), which is engaged in the physical
importation of goods, wares or merchandise
for re- export shall–
(a) carry out such activities either in a Free
Port or a Bonded Area declared by
regulations under this Act;
(b) notwithstanding the provisions of
subsection (1), be subject to the
provisions of the Customs Ordinance,
in any movement of goods to and from
such Free Port or the Bonded Area, to
and from the Sri Lankan territory, as if
such goods had been imported into Sri
Lanka or exported from Sri Lanka, as
the case may be.
(3) Any new enterprise referred to in
subsection (1) which is not engaged in physical
movement of goods, wares or merchandise, may
carry out such operations outside a Free Port or
a Bonded Area as referred to above.”.
Amendment of 11. Section 19 of the principal enactment is hereby
section 19 of the amended by the substitution for the words and figures
principal
enactment. “sections 16, 17 and 18” of the words and figures “ sections
16, 17, 18, 18A, 18B and 18C”.
Finance Act, No. 12 of 2013 9
12. The following sections are hereby inserted Insertion of
immediately after section 19 of the principal enactment and sections 19A and
19B in the
shall have effect as section 19A and 19B thereof:-
principal
“Regulations. 19A. (1) The Minister may make regulations enactment.
in respect of all matters which are required to
be prescribed or for which regulations are
authorized to be made under this Act.
(2) Without prejudice to the generality of
subsection (1), the Minister may, by
regulations–
(a) declare Free Ports and Bonded Areas
for the purposes of this Part of this
Act;
(b) specify the investment limits and
other criteria required for the
enterprises referred to under this Part
of this Act;
(c) specify the conditions and
exemptions in relation to local sales;
(d) specify the procedure to be followed
in granting exemptions under this
Part of this Act; and
(e) specify monitoring authority and the
mechanism for monitoring.
(3) Every regulation made by the Minister
under subsection (1) shall be published in the
Gazette and shall come into operation on the
date of such publication or on such later date
as may be specified therein.
(4) Every regulation made by the Minister
shall as soon as convenient after its publication
in the Gazette be brought before Parliament
for approval. Every regulation which is not so
approved shall be deemed to be rescinded from
the date of disapproval but without prejudice
to anything previously done thereunder.
10 Finance Act, No. 12 of 2013
(5) Notification of the date on which any
regulation is deemed to be rescinded shall be
published in the Gazette.
Interpretation. 19B. In this Part of this Act, unless the
context otherwise requires-
“Board of Investment of Sri Lanka” means the
Board of Investment of Sri Lanka
established under the Board of Investment
of Sri Lanka Law, No. 4 of 1978;
“Bonded Area” means an area supervised by
the Board of Investment of Sri Lanka or
the Director-General of Customs or any
other Authority and declared by
regulations under this Act;
“Controller of Exchange” means the Head of
the Department of Exchange Control
established under the Exchange Control
Act (Chapter 423) ;
“Controller of Imports and Exports” means
the Controller of Imports and Exports
appointed under section 2 of the
Imports and Exports (Control) Act
(Chapter 236) ;
“Customs Ordinance” means the Customs
Ordinance (Chapter 235) ;
“Director-General of Customs” means the
Director-General of Customs appointed
under section 2 of the Customs
Ordinance;
“entrepot trade” includes any manufacturing
activity approved under this Part and
carried out by a new enterprise for re-
export with a domestic value addition
at a minimum rate of ten per centum,
within a Free Port declared by
regulations under this Part of this Act;
Finance Act, No. 12 of 2013 11
“Free Port” means an area within a sea port or
an inland dry port operated under the
supervision of the Sri Lanka Ports
Authority and declared by regulations
under this Act;
“logistic service” includes inter alia-
(i) transshipment activities;
(ii) warehousing for temporary
storage of input or finish goods
for local exporters; and
(iii) freight forwarding for clients
abroad;
“ Sri Lanka Ports Authority” means the
Sri Lanka Ports Authority established
under the Sri Lanka Ports Authority
Act, No. 51 of 1979;
“ Sri Lankan territory” means the territory of
the Republic of Sri Lanka and does not
include any Free Port or a Bonded Area
declared under this Part of this Act.”.
13. The following Schedule is hereby added Addition of a
Schedule in the
immediately after section 20 of the principal enactment:-
principal
enactment.
“Schedule (section 18A)
1. Value Added Tax Act, No. 14 of 2002;
2. Nation Building Tax Act, No. 9 of 2009 ;
3. Sri Lanka Export Development Act, No. 40 of 1979 ;
4. Special Commodity Levy Act, No. 48 of 2007;
5. Ports and Airports Development Levy Act, No.18 of
2011;
6. Excise (Special Provisions) Act, No. 13 of 1989.”.
12 Finance Act, No. 12 of 2013
PART IV
IMPOSTION OF CROP INSURANCE LEVY
Imposition of 14. (1) With a view of covering the damages suffered
Crop Insurance
Levy. by the farmers of Sri Lanka due to natural disasters , there
shall be charged and levied from every institution coming
under the purview of the Acts specified in the Schedule
hereto, a levy of one per centum to be called the Crop
Insurance Levy (hereinafter in this Part referred to as “ the
levy” ) on the after tax profits of such institutions.
(2) The levy imposed under this Part shall be remitted to
a separate account maintained and administered by the
National Insurance Trust Fund Board established by the
National Insurance Trust Fund Act, No. 28 of 2006 .
(3) The provisions which may be necessary in the
implementation of the provisions of this Part shall be
prescribed by regulations under this Act.
Regulations. 15. (1) The Minister may make regulations in respect of
all matters which are required to be prescribed or for which
regulations are authorized to be made under this Act.
(2) Every regulation made by the Minister under
subsection (1) shall be published in the Gazette and shall
come into operation on the date of such publication or on
such later date as may be specified therein.
(3) Every regulation made by the Minister shall as soon
as convenient after its publication in the Gazette be brought
before Parliament for approval. Every regulation which is
not so approved shall be deemed to be rescinded from the
date of disapproval but without prejudice to anything
previously done thereunder.
(4) Notification of the date on which any regulation is
deemed to be rescinded shall be published in the Gazette.
Finance Act, No. 12 of 2013 13
16. In the event of any inconsistency between the Sinhala text to
Sinhala and Tamil texts of this Act, the Sinhala Text Shall prevail in case
of inconsistency.
prevail.
Schedule (section 14)
1. Banking Act, No. 30 of 1988;
2. Finance Companies Act, No. 78 of 1988;
3. RegulationofInsuranceIndustryAct,No. 43 of
2000.

14 Finance Act, No. 12 of 2013
Annual subscription of English Bills and Acts of the Parliament Rs. 885 (Local), Rs. 1,180
(Foreign), Payable to the SUPERINTENDENT, GOVERNMENT PUBLICATIONS BUREAU, DEPARTMENT OF
GOVERNMENT INFORMATION, NO. 163, KIRULAPONA MAWATHA, POLHENGODA, COLOMBO 05 before 15th
December each year in respect of the year following.
NadunReplacecontEnd