ACT, No. 15 OF 2009

15of2009.pdf
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PARLIAMENT OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
VALUE ADDED TAX (AMENDMENT)
ACT, NO. 15 OF 2009
[Certified on 31st March, 2009]
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 03, 2009
PRINTEDAT THEDEPARTMENT OFGOVERNMENTPRINTING,SRILANKA
TO BEPURCHASED AT THEGOVERNMENT PUBLICATIONSBUREAU, COLOMBO 5
Price : Rs. 10.00 Postage : Rs. 5.00

Value Added Tax (Amendment) 1
Act, No. 15 of 2009
[Certified on 31st March, 2009]
L.D.—O. 52/2008.
ANACT TO AMEND THE VALUE ADDED TAX ACT, NO. 14 OF 2002
BE it 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 2009.
2. (1) Section 2 of the Value Added Tax Act, No. 14 of Amendment of
2002, (hereinafter referred to as “the principal enactment”) section 2 of Act,
No. 14 of 2002.
is hereby amended as follows:—
(a) in sub-paragraph (iii) of subsection (1) of that
section, by the substitution for the words and figures
“any taxable period commencing on or after January
1, 2005” of the words and figures, “any taxable
period commencing on or after January 1, 2005,
but prior to January 1, 2009”;
(b) in subparagraph (v) of subsection (1) of that section
by the repeal of all the words and figures from “(v)
for any taxable period” upto the words “the Fourth
Schedule of this Act” and the substitution therefor
of the following:—
“(v) (i) for any taxable period commencing on
or after January 1, 2005 but prior to
January 1, 2009, at the rate of fifteen per
centum (Standard rate) (of which the Tax
Fraction is 3/23) on the value of such
goods or services supplied or goods
imported other than in respect of the
following:—
(a) goods or services chargeable with
tax at zero per centum; and
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2 Value Added Tax (Amendment)
Act, No. 15 of 2009
(b) goods or services specified in the
Fourth Schedule of this Act;
(ii) for any taxable period commencing
on or after January 1, 2009, at the rate
of twelve per centum, (Standard rate)
(of which the Tax Fraction is 3/28) on
the value of such goods or services
supplied or goods imported other than
in respect of —
(a) goods or services chargeable with
tax at zero per centum; and
(b) goods or services specified in the
Fourth Schedule of this Act;”.
(c) by the repeal of paragraph (d) of subsection (2) of
that section and the substitution therefor of the
following:—
“(d) on the supply with the approval of Export
Development Board established by the Sri
Lanka Export Development Board Act, No.
40 of 1979 with the concurrence of the
Minister of the Ministry in charge of the
subject of finance—
(i) of any goods manufactured in Sri Lanka
by such suppliers and supply by such
supplier to any manufacturer to be
utilized for the purpose of manufacture
of goods other than the goods referred to
in paragraph (c) of this subsection by
such manufacturers who are registered
with the Export Development Board as
exporters; or
(ii) of any service by such suppliers provided
to any manufacturer which results in the
improvement of the quality, character or
value of any goods manufactured by such
Value Added Tax (Amendment) 3
Act, No. 15 of 2009
manufacturer of goods for export who is
registered with Export Development
Board as an exporter, being a service
provided by such suppliers approved by
the Export Development Board
established under the Sri Lanka Export
Development Board Act, No. of 40 of
1979 as a supply of services identified
for this purposes,
Until such time as the activities of such
manufacturers or service providers are
monitored by the Export Development Board
with the approval of the Ministry of the
Minister in charge of the subject of Finance
and the Export Development Board, furnishes
the reconciliation on the disposal of such
goods on a quarterly basis as stipulated by
the Commissioner-General to the satisfaction
of the Commissioner-General, that such
finished products are in fact exported by the
recipient of the supplies.”.
3. Section 10 of the principal enactment is hereby Amendment of
amended as follows:— section 10 of the
principal
enactment.
(1) in subsection (1) of that section, by the repeal of all
the words and figure from “(10) (1) every person
who”, upto the words “to exceed one million and
eight hundred thousand rupees” and the substitution
therefor of the following:—
“10. (1) Every person who—
(i) on or after August 1, 2002, but prior to January
1, 2009, carries on or carries out any taxable
activity in Sri Lanka shall be required to be
registered under this Act, if—
(a) at the end of any taxable period of one
month or three months, as the case may
be, the total value of his taxable
4 Value Added Tax (Amendment)
Act, No. 15 of 2009
supplies of goods or services or goods
and services made in Sri Lanka in that
taxable period of one month or three
months, as the case may be, has
exceeded five hundred thousand
rupees; or
(b) in the twelve months period then
ending, the total value of his taxable
supplies of goods or services or goods
and services made in Sri Lanka has
exceeded one million and eight
hundred thousand rupees; or
(c) at any time, there are reasonable
grounds to believe that the total value
of his taxable supplies in Sri Lanka of
goods or services or goods and services
in the succeeding one month or three
months taxable period, as the case may
be, is likely to exceed five hundred
thousand rupees or in the succeeding
twelve months period is likely to
exceed one million and eight hundred
thousand rupees.”.
(2) immediately after paragraph (c) of subsection (1)
of that section, by the insertion of the following:—
“(ii) on or after January 1, 2009 carries on or carries
out any taxable activity in Sri Lanka shall be
required to be registered under this Act, if-
(a) at the end of any taxable period of one
month or three months, as the case may
be, the total value of his taxable
supplies of goods or services or goods
and services made in Sri Lanka in that
taxable period of one month or three
Value Added Tax (Amendment) 5
Act, No. 15 of 2009
months, as the case may be, has
exceeded six hundred and fifty
thousand rupees; or
(b) in the twelve months period then
ending, the total value of his taxable
supplies of goods or services or goods
and services made in Sri Lanka has
exceeded two million and five hundred
thousand rupees; or
(c) at any time, there are reasonable
grounds to believe that the total value
of his taxable supplies in Sri Lanka of
goods or services or goods and services
in the succeeding one month or three
months taxable period, as the case may
be, is likely to exceed six hundred and
fifty thousand rupees or in the
succeeding twelve months period is
likely to exceed two million and five
hundred thousand rupees,”.
4. Section 22 of the principal enactment is hereby Amendment of
amended as follows:— section 22 of the
principal
enactment.
(1) in the fourth proviso to subsection (3) of that
section, by the substitution for the words “this Act
shall be restricted to fifteen per centum other than”
of the words “this Act shall be restricted to twelve
per centum other than”;
(2) in subparagraph (i) of paragraph (b) of the second
proviso to subsection 5 by the substitution for the
words “an insurance bond by a registered person”
of the words “an insurance bond by a registered
person to the value as determined by the
Commissioner-General”;
6 Value Added Tax (Amendment)
Act, No. 15 of 2009
(3) in subparagraph (iv) of subsection (6) of that
section by the substitution for all the words and
figures “(iv) if the input tax on any invoice” upto
the words “the return for that taxable period” of the
following:—
“(iv) if the input tax on—
(a) any invoice referred to in paragraph (iii)
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, by furnishing within
the said period of twelve months the
return for that taxable period; or
(b) any customs declaration referred to in
paragraph (iii), 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 twenty four months
from the date of such customs
declaration, by furnishing within the said
period of twenty four months the return
for that taxable period;”
Amendment of 5. Section 25A of the principal enactment is hereby
section 25A of amended as follows:—
the principal
enactment.
(1) in paragraph (ii) of subsection (1) of that section,
by the substitution for the words and figures “prior
to December 31, 2007; and” of the words and figures
“prior to December 31, 2007;”;
(2) in paragraph (iii) of that subsection, by the
substitution for the words and figures “the
Co-operative Societies Law, No. 5 of 1972 , on or
after January 1, 2008 but prior to January 1, 2009;
and
Value Added Tax (Amendment) 7
Act, No. 15 of 2009
(3) by the addition immediately after paragraph
(iii) of that subsection, of the following new
paragraph :—
“(iv) by any person other than a Co-operative
Society registered under the Co-operative
Society Law, No. 5 of 1972, or Lady Lochore
Loan Fund established under the Act, No. 38
of 1951, commencing on or after January 1,
2009”.
6. Section 25I of the principal enactment is hereby Amendment of
amended as follows:— section 25I of
the principal
(1) paragraph (b) of subsection (1) of that section , by enactment.
the substitution for the words “such person or
partnership exceeds rupees two million five hundred
thousand per year, which ever occurs first.” of the
following:—
“(i) such person or partnership—
(a) exceeds rupees two million five hundred
thousand per year for any period prior to
January 1, 2009;
(b) exceeds rupees three million per year for
any period commencing on or after
January 1, 2009, whichever occurs first.”;
(2) in paragraph (a) of subsection (2) of that section,
by the repeal of subparagraph (i) thereof, and the
substitution therefor of the following:—
“ (i) whose aggregate turnover from every taxable
activity carried on or carried out does not
exceed—
(a) rupees two million and five hundred
thousand per year or six hundred and
twenty five thousand per quarter for any
period prior to January 1, 2009; and
8 Value Added Tax (Amendment)
Act, No. 15 of 2009
(b) rupees three million per year or seven
hundred and fifty thousand per quarter
for any period commencing on or after
January 1, 2009; and”.
Amendment of 7. Section 35 of the principal enactment is hereby
section 35 of the amended by the addition immediately after subsection (1)
principal
of that section of the following new subsection:—
enactment.
“(1A) Notwithstanding the provisions of section 34 ,
the Commissioner-General may refer any valid appeal
made to him, to the Board of Review and the Board of
Review, shall hear and determine such appeal. The
provisions of section 169 of the Inland Revenue Act,
No. 10 of 2006 shall apply to the hearing and
determination of any appeal so referred.”.
Amendment of 8. 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 (xii), by the substitution for the words
and figures “December 31, 2008,” of the
words and figures “December 31, 2010”.
(b) by the addition immediately after item (xv)
of the following new item:—
“(xvi) solar panel modules, accessories or
solar home system for the generation
of solar power energy identified under
the specified Harmonized Commodity
Description Nos. for custom purposes
(effective from 01. 01. 2009);
(xvii) high tech medical equipment or any
machinery used for the manufacture of
ticket issuing machinery identified
Value Added Tax (Amendment) 9
Act, No. 15 of 2009
under the specified Harmonized of
Commodity Description Numbers for
customs purposes.”.
(2) in paragraph (b) of that Part—
(a) in item (xxvi) by the substitution for the
words and figures “(effective from 01. 01.
2008); and” of the words and figures
“(effective from 01. 01. 2008);”
(b) in item (xxvii), by the substitution for the
words and figures “(effective from 01. 01.
2008).” of the words and figures “(effective
from 01. 10. 2008);”;
(c) by the addition immediately after item (xxvii)
of the following new items:—
“(xxviii) locally manufactured machinery used
for tea industry and identified by Sri
Lanka Tea Board established by the
Sri Lanka Tea Board Law No. 14 of
1975 as a tea machinery (effective from
01. 10. 2008);
(xxix) locally manufactured surgical gauze
used for surgery (effective from 01. 01.
2009);
(xxx) locally manufactured Jewellery.”.
(3) in paragraph (c) of that PART—
(a) in item (xxiii), by the substitution for the
words “or specified project” of the words “or
specified project”;
10 Value Added Tax (Amendment)
Act, No. 15 of 2009
(b) by the addition immediately after item (xxiii)
of the following items:—
“(xxiv) any bus with the approval of National
Transport Commission or any
Provincial Road Passenger Transport
Authority by the owner of such bus to
replace any bus destroyed due to
terrorist activities (effective from 9. 7.
2008);
(xxv) brass sheets, brass ingots, thread, dyes,
paraffin wax or shellac for manufacture
of brassware by the National Craft
Council with the approval of Ministry
of Rural Industries and Self
Employment Promotion (effective from
01. 01. 2009);
(xxvi) chemical naptha by the Ceylon
Petroleum Corporation to be supplied
to Ceylon Electricity Board for the
generation of electricity (effective from
01. 01. 2009);
(xxvii) packing materials exclusively for the
use of packing pharmaceuticals
manufactured in Sri Lanka and which
are imported by the manufacturer of
such pharmaceuticals so far as such
packing materials are not manufactured
in Sri Lanka and approved by the
Minister in charge of the subject of
Finance on the recommendation of the
secretary to the Ministry of Healthcare
and Nutrition;
(xxviii) Cine Films, cinematographic films
exposed or developed, magnetic cine
sound recorders, cinematographic
Value Added Tax (Amendment) 11
Act, No. 15 of 2009
cameras and projector parts and
accessories, apparatus and equipment
for cinematographic labratories,
electric filament or discharge lamps and
arc lamp carbon, identified under the
Harmonized Commodity Description
and Coding System Numbers, for
customs purposes with the approval
of the Chairman, National Film
Corporation.”.
(4) by the insertion immediately after paragraph (f) of
that PART, the following new paragraph:—
“(g) the supply of services, being construction
services for Gama Naguma, Maga Naguma,
Samurdhi Projects or for community irrigation
projects, carried out through the participation
of the community and approved by Secretary
to the Ministry of the Minister in charge of
the subject of Nation Building and State
Infrastructure Development (effective from
01. 01. 2009);”.
9. The Third Schedule to the principal enactment is Amendment of
hereby amended by the addition immediately after the the Third
Schedule to the
heading “third schedule”, of the following:— Principal
enactment.
“For any taxable period ending prior to January 1, 2009”.
10. (a) The amendments made to paragraph (d) of Retrospective
subsection (2) of section 2 of the principal enactment by effect.
section 2 of this Act shall for the purposes be deemed to
have come into force on June 1, 2008.
(b) The amendments made of section 22 of the principal
enactment, by section 4 (1), (2) and (3) of this Act shall
for the purposes be deemed to have come into force on
January 1, 2009.
12 Value Added Tax (Amendment)
Act, No. 15 of 2009
(c) The amendment made to section 35 of the principal
enactment by section 7 of this Act shall for all purposes be
deemed to have come into force on January 1, 2009.
Indemnity. 11. Any person who collects the value added tax as
provided for in this Act during the period commencing from
January 1, 2009 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 for all
purposes 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 12. 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) 13
Act, No. 15 of 2009
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