ACT, No. 15 OF 2008

15of2008.pdf
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PARLIAMENT OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
—————————
VALUE ADDED TAX (AMENDMENT)
ACT, NO. 15 OF 2008
—————————
[Certified on 29th February, 2008]
Printed on the Order of Government
—————————
Published as a Supplement to Part II of the Gazette of the Democratic
Socialist Republic of Sri Lankaof February 29, 2008
PRINTEDATTHEDEPARTMENTOFGOVERNMENTPRINTING,SRILANKA
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Price : Rs. 6.00 Postage : Rs. 5.00

Value Added Tax (Amendment) Act, No. 15 of 2008 1
[Certified on 29th February, 2008]
L. D. — O. 66/2007.
AN ACT TO AMEND THE VALUE ADDED TAX ACT, NO. 14 OF 2002
BE it therefore enacted by the Parliament of the Democratic
Socialist Republic of Sri Lanka as follows :—
1. This Act may be cited as the Value Added Tax Short title.
(Amendment) Act, No. 15 of 2008.
2. Section 2 of the Value Added Tax Act, No. 14 of Amendment of
section 2 of
2002 (hereinafter referred to as the "principal enactment")
Act, No. 14 of
is hereby amended in the second proviso to subsection (3) 2002.
of that section, by the repeal of paragraph (b) thereof and
the substitution therefor of the following:—
"(b) any goods temporarily imported into Sri Lanka —
(i) being plant, machinery or equipment of
high value to be used for any project; or
(ii) being goods to be used as exhibition
material or as materials in any technical
demonstration,
and which are re-exported after the completion of
such project, exhibition or demonstration, as the
case may be, with the approval of the Minister, up
to the date of such competition, exhibition or
demonstration.”.
3. Section 22 of the principal enactment is hereby Amendment of
amended as follows:— section 22 of the
principal
(1) by the repeal of subparagraph (iv) of subsection (6) enactment.
and all the words and figures up to the end of that
subsection, and the substitution therefor of the
following:
"(iv) if the input tax on any invoice or customs
declaration referred to in paragraph (iii), as
2—PL 002809—6,900 (02/2008)
2 Value Added Tax (Amendment) Act, No. 15 of 2008
the case may be, has not been deducted as
provided for in this Act, from the output tax
for any taxable period ending on or before
the expiry of twelve months from the date of
such tax invoice or customs declaration by
furnishing within the said period of twelve
months the return for that taxable period:
Provided however, notwithstanding the
provisions of subsection (2), and the
exemptions specified in item (i) and item (ii)
of sub-paragraph (f) of Part II of the First
Schedule to this Act, any registered person
who is engaged in supplying of goods or
services to any strategic development project
or any other special project as is referred to in
the aforesaid items, where the payment is
borne by the Government, may be allowed
input tax on the purchase of goods or services
connected to supply of goods or services to
such projects.";
(2) in subsection (10) of that section, by the addition
at the end of the proviso to that subsection, of the
following:—
“Provided further, that for the purpose of
ascertainment of the input tax allowable in terms of
this subsection, of any person supplying goods or
services to any strategic development project or
any other special project, specified in item (i) and
item (ii) of sub-paragraph (f) of Part II of the First
Schedule to this Act, the value of the supply of the
suppliers for the relevant period of such project
shall be deemed to be a taxable supply on which
the output tax is computed.".
Amendment 4. Section 25A of the principal enactment is hereby
of section amended in subsection (1) of that section, by the repeal of
25A of the paragraph (ii) thereof and the substitution therefor of the
principal
following:—
enactment.
"(ii) by any person on or after July 1, 2003 but prior to
December 31, 2007; and
Value Added Tax (Amendment) Act, No. 15 of 2008 3
(iii) by any person other than a Co-operative Society
registered under the Co-operative Societies Law,
No. 5 of 1972, on or after January 1, 2008.".
5. Section 25c of the principal enactment is hereby Amendment of
amended in subsection (1) of that section, as follows:— section 25c of
the principal
enactment.
(1) by the substitution for the words "being an asset
which forms part of the leasing stocks of such
person" of the words "being an asset which is leased
under the provisions of the aforesaid Act."; and
(2) by the addition, immediately at the end of that
subsection of the following:—
"For the avoidance of doubts it is hereby declared
that the value addition of such institution shall be
computed, based on the net profit or loss before
deducting the tax payable under this Chapter.".
6. Section 25H of the principal enactment is hereby Amendment of
amended by the addition immediately after subsection (3) section 25H of
the principal
thereof, of the following new subsection:—
enactment.
"(4) Every person or partnership registered under this
Chapter shall furnish to the Commissioner-General of Inland
Revenue not later than the twentieth day of the month
immediately following the expiry of the relevant quarter, a
return in such form and containing such particulars as may
be specified by the Commissioner-General.”.
7. Section 26A of the principal enactment is hereby Amendment of
section 26A of
amended as follows:—
the principal
enactment.
(1) in subsection (1) of that section, by the substitution
for the words "deduct from such payment one-third
of the tax included in such payment, and" of the
words "deduct from such payment one-third of the
tax included in such payment as the ‘VAT Advance
Payment’, and"; and
4 Value Added Tax (Amendment) Act, No. 15 of 2008
(2) by the repeal of the marginal note to that section,
and the substitution therefor of the following:—
"Deduction of VAT Advance Payments.".
Replacement of 8. Section 48A of the principal enactment is hereby
section 48A of repealed and the following section substituted therefor:—
the principal
enactment.
“Time Limit 48A. The Commissioner-General shall not,
for the commence any action under sections 42, 43,
recovery of
44 or 48 of this Act, for the recovery of tax in
the tax in
default. default where a period of five years has lapsed
from the completion of three months from the
end of any taxable period in which the
assessment by which such tax was charged or
levied becomes final and conclusive under
section 37.".
Amendment of 9. The First Schedule to the principal enactment is
the First hereby amended in Part II thereof as follows :—
Schedule to the
principal
enactment. "(1) in paragraph (a) of that Part—
(a) in item (iv), by the substitution for the words
"gold coins and temporary import of any plant,
machinery or equipment or any goods to be
used as exhibition materials or as materials in
any technical demonstration, and which are
re-exported within twelve months from the
date of import;" of the words "gold coins
(effective from 17.07.2007);";
(b) in item (xii) by the substitution for the words
"yarn and dyes used for handloom industry
and" of the words "yarn used for the textile
industry and dyes used for the handloom
industry, as identified under the Harmonized
Commodity Description and Coding System
Numbers for Customs purposes, and (effective
from 01.01.2008)”;
Value Added Tax (Amendment) Act, No. 15 of 2008 5
(2) in paragraph (b) of that Part—
(a) in item (i) (a) thereof, by the substitution for
the words "education service by an education"
of the words "education service by an
education (effective from 01.01.2006)";
(b) by the repeal of item (xii) and the substitution
therefor of the following:—
"(xii) all healthcare services provided by
medical institutions or professionally
qualified persons providing such care
(effective from 01.07.2007)”;
(c) by the addition immediately after item (xxi),
the following:—
"(xxii) clay roof tiles (effective from
01.07.2007) or chemical naptha
(effective from 17.07.2007), to the
extent that such clay roof tiles or
chemical naptha are manufactured in
Sri Lanka;
(xxiii) unprocessed agricultural, horticultural
or fishing products produced in
Sri Lanka, including the local supply
of unprocessed agricultural,
horticultural or fishing products where
value added tax has not been collected
or paid to the Department of Inland
Revenue on or after 01.07.2007;
(xxiv) unprocessed prawns produced in Sri
Lanka, including the local supply of
unprocessed prawns, where value
added tax has not been collected or
paid to the Department of Inland
Revenue on or after January 1, 2004
(effective from 01.01.2008);
6 Value Added Tax (Amendment) Act, No. 15 of 2008
(xxv) imported rattans (effective from
01.07.2007);
(xxvi) locally produced dairy products out of
locally produced fresh milk in so far as
such milk is produced in Sri Lanka and
locally produced rice products
containing rice produced in Sri Lanka
(effective from 01.01.2008); and
(xxvii) locally manufactured sugar (effective
from 01.01.2008).";
(3) in paragraph (c) of that Part, by the addition
immediately after item (xviii) of the following:—
"(xix) (a) plant, machinery or equipment of
high value to be used for any
project; or
(b) goods to be used as exhibition
material or as materials in any
technical demonstration.
and which are re-exported after the
completion of such project, exhibition
or demonstration, as the case may be,
and in respect of which tax is differed
in terms of paragraph (b) of the second
proviso to subsection (3) of section 2
(effective from 17.07.2007);
(xx) aircraft engines or aircraft spare parts
identified under specified Harmonized
Commodity Description and Coding
System Numbers for Customs purposes
(effective from 17.07.2007);
Value Added Tax (Amendment) Act, No. 15 of 2008 7
(xxi) rattans under HS Code No. 1401.20
(effective from 01.07.2007);
(xxii) plant and machinery by an undertaking
qualified for a tax holiday under
section 24C of the Inland Revenue Act,
No. 10 of 2006, for use by such
undertaking for the purpose of
manufacturing or for the provision of
services. (effective from 01.01.2008)";
(xxiii) goods for any strategic development
project or specified project referred to
in paragraph (f) with the approval of
the Minister of Finance.”;
(4) by the insertion immediately after paragraph (e) of
that Part, the following new paragraph :—
"(f) the supply of —
(i) goods or services to any project identified
as a Strategic Development Project, in
terms of section 3(4) of the Strategic
Development Projects Act, No. 14 of 2008
(effective from 01.01.2008); or
(ii) goods or services to any specified project
identified by the Minister in charge of the
subject of Finance, taking into
consideration the economic benefit to the
country, on which project the tax is borne
by the Government (effective from
01.01.2008); or
(iii) goods or services by any co-operative
society registered under the Co-operative
Societies Law, No. 5 of 1972 (effective
from 01.01.2008).".
8 Value Added Tax (Amendment) Act, No. 15 of 2008
Replacement 10. The Third Schedule to the principal enactment is
of Third
hereby repealed and the folowing Schedule substituted
Schedule to
the principal therefor:—
enactment.
“THIRD SCHEDULE
BASIC RATE
(a) the supply or import of—
(i) Sugar upto December 31, 2007;
(ii) Dhall;
(iii) Potatoes upto June 30, 2007;
(iv) Onions upto June 30, 2007;
(v) Dried fish;
(vi) Chillies;
(vii) Hi-tech medical equipment or any machinery
used for the manufacture of ticket issuing
machinery, identified by the Commissioner-
General of Inland Revenue under the
Harmonized Commodity Description and
Coding System Numbers, for Customs purposes;
(viii) Jewellery ;
[The import or supply of goods referred to in items (i) and
(ii) of this Schedule shall be deemed for all purposes to have
been exempt from Value Added Tax from October 1, 2004
to November 18, 2004.]
(b) the import of—
(i) Cine Films, cinematographic films exposed or
developed, magnetic cine sound recorders,
cinematographic cameras and projector parts
Value Added Tax (Amendment) Act, No. 15 of 2008 9
and accessories, apparatus and equipment for
cinematographic laboratories, electric filament
or discharge lamps and arc lamp carbon,
identified by the Commissioner-General of
Inland Revenue under the Harmonized
Commodity Description and Coding System
Numbers, for Customs purposes with the
approval of the Chairman, National Film
Corporation;
(ii) Sugar (effective from 01.01.2008);
(iii) Canned Fish, Chick Peas, Green Gram (effective
from 05.06.2007);
(iv) Potatoes (effective from 01.07.2007);
(v) Onions (effective from 01.07. 2007).".
11. The amendments made to— Retrospective
effect.
(1) subsection (3) of section 2 of the principal enactment
by section 2 of this Act, shall be deemed for all
purposes to have come into operation from July 17,
2007;
(2) subsection (6) and subsection (10) of section 22 of
the principal enactment by section 3 of this Act,
shall be deemed for all purposes to have come into
operation from January 1, 2008;
(3) section 25H [addition of new subsection (4) of the
principal enactment by section 6 of this Act, shall
be deemed for all purposes to have come into
operation from January 1, 2007;
(4) subsection (1) of section 26A of the principal
enactment by section 7 of this Act, shall be deemed
for all purposes to have come into operation from
January 1, 2008;
10 Value Added Tax (Amendment) Act, No. 15 of 2008
(5) section 48A [replacement of section] of the principal
enactment by section 8 of this Act, shall be deemed
for all purposes to have come into operation from
January 1, 2006.
Indemnity. 12. Any person who collects the value added tax as
provided for in this Act during the period commencing July
1, 2007 and ending on the date of the coming into operation
of this Act, shall be deemed to have acted with due authority
and such collection shall be deemed to have been, and to be,
validly made and such person is hereby indemnified against
all actions civil or criminal, in respect of such collection.
Sinhala text to 13. In the event of any inconsistency between the
prevail in case Sinhala and Tamil texts of this Act, the Sinhala text shall
of
inconsistency. prevail.

Value Added Tax (Amendment) Act, No. 15 of 2008 11
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