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Short title.
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1. This Act may be cited as the Business Turnover Tax Act*.(* Sections 119 to 159 in Part XII of the Finance Act, No. 11 of 1963, have been renumbered and reproduced as sections 2 to 43 of this Act.)
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Charge of the business turnover tax.
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2.
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(1) Subject to the other provisions of this Act, there shall be charged for every year of assessment commencing on or after October 1, 1963, from every person who carries on in Sri Lanka the business of a manufacturer or any other business a tax (hereafter in this Act referred to as the ” business turnover tax “) in respect of the turnover made by that person from that business computed at such rate as the Minister may fix by Order published in the Gazette. The rate of the business turnover tax in respect of any business may be determined by reference to the nature of such business and accordingly different rates of such tax may be determined in respect of different classes or descriptions of businesses.
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(2) The rate of the business turnover tax in respect of any class or description of business may, from time to time, be varied by the Minister by Order published in the Gazette.
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(3) Every Order under subsection (1) or subsection (2) shall come into force on the date of its publication in the Gazette or on such later date as may be specified in the Order and shall be brought before Parliament within a period of three months from the date of the publication of such Order in the Gazette, or, if no meeting of Parliament is held within such period, at the first meeting of Parliament held after the expiry of such period, by a motion that such Order shall be approved. There shall be set out in a schedule to every such motion the text of the Order to which the motion refers.
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(4) Any Order under subsection (1) or subsection (2) which Parliament refuses to approve shall, with effect from the date of such refusal, be deemed to be revoked but without prejudice to the validity of anything done thereunder. Notification of the date on which any such Order is deemed to be revoked shall be published in the Gazette.
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(5) The maximum amount of the business turnover tax charged from any person for any year of assessment ending on or before September 30, 1968, in respect of the business carried on by him shall in no case exceed eighty per centum of the profits or income of that person from that business as ascertained under the provisions of Chapter II of the Inland Revenue Act, No. 4 of 1963, or Chapter IV of the Inland Revenue Act (No. 28 of 1979) before making the deduction allowable under section 41 of this Act or, where the Inland Revenue Acts do not apply to such person, eighty per centum of the profits or income of such person from that business as ascertained under the provisions of Chapter II of the Inland Revenue Act, No. 4 of 1963, or Chapter IV of the Inland Revenue Act (No. 28 of 1979) before making the deduction allowable under section 41 of this Act as though the Inland Revenue Acts were applicable to him, and accordingly such person shall be entitled to a refund of the sum so paid by him as business turnover tax in excess of such maximum amount.
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Recovery of business turnover tax not to be invalid by reason only of non-registration of hotels and guest houses.
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2A.
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(1) Any recovery of business turnover tax for any period commencing on November 5, 1975 and ending on the date of coming into operation of this section in respect of the business of operating a hotel or a guest house by virtue of a relevant Order shall be deemed not to be invalid by reason only of the fact that such hotel or guest house had not been registered with the Ceylon Tourist Board established under the Ceylon Tourist Board Act, No. 10 of 1966 ;
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(2) Every reference to “the business of operating a hotel or a guest house registered’ with the Ceylon Tourist Board” in a relevant Order shall be deemed with effect from the date of such Order to be a reference to “a business of operating a hotel or a guest house approved by the Ceylon Tourist Board established under the Ceylon Tourist Board Act, No. 10 of 1966 “, and accordingly, any person chargeable with business turnover tax by virtue of a relevant Order in respect of the business of operating a hotel or a guest house for any period commencing on the date of such Order and ending on the date of coming into operation of this section shall-
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(a) be deemed to have complied with the provisions of section 123 if he furnishes a return setting out the turnover of that business for that period within thirty days of the coming into operation of this section; and
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(b) 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 or this Part of this Act relating; to the recovery of business turnover tax in default shall accordingly apply to the recovery of such amount.
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(3) 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 preferred or instituted before or after the date of coming into operation of this Part of this Act), any question or matter arises as to the validity or relevant Order under section 119 such question or matter shall be determined in accordance with the preceding provisions of this section.
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(4) In this section. “relevant Order” means an Order made under section 119 and published in-
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(a) Gazette No. 118/12 of November 5, 1975; or
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(b) Gazette No. 291/9 of November 15, 1977.
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The circumstances in which a person becomes chargeable with business turnover tax.
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3.
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(1) A person shall, in respect of any business carried on by him in Sri Lanka, be chargeable with business turnover tax-
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(a) for any year of assessment ending on or before September 30, 1969, if-
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(i) in the case of a business carried on by him for a period of not less than one year prior to the date of commencement of that year of assessment, the turnover made by him from that business for the accounting period immediately preceding that year of assessment is not less than one hundred thousand rupees, or
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(ii) in the case of a business carried on by him for a period of less than one year prior to the date of commencement of that year of assessment, the turnover made by him from that business during that period is not less than a sum which bears to one hundred thousand rupees the same proportion as the number of days in that period bears to three hundred and sixty-five;
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(b) for the year of assessment commencing on October 1, 1969, and for the next subsequent year of assessment if-
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(i) in the case of a business carried on by him for a period of not less than one year prior to the date of commencement of that year of assessment, the turnover made by him from that business for the accounting period immediately preceding that year of assessment is not less than seventy-five thousand rupees, or
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(ii) in the case of a business carried on by him for a period of less than one year prior to the date of commencement of that year of assessment, the turnover made by him from that business during that period is not less than a sum which bears to seventy-five thousand rupees the same proportion as the number of days in that period bears to three hundred and sixty-five;
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(c) for each quarter in any year of assessment commencing on or after October 1, 1971, but prior to October 1, 1977, if-
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(i) in the case where that business is carried on by that person during the entirety of that quarter, the turnover of that business for that quarter is not less than eighteen thousand seven hundred and fifty rupees, or
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(ii) in the case where that business is carried on by that person for only a part of that quarter, the turnover of that business for that part of that quarter is not less than a sum which bears to eighteen thousand seven hundred and fifty rupees the same proportion as the number of days in that part of that quarter bears to ninety-one ; and
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(d) for each quarter in any year of assessment commencing on or after October 1, 1977, if-
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(i) in the case where that business is carried on by that person during the entirety of that quarter, the turnover of that business for that quarter is not less than twenty-five thousand rupees, or
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(ii) in the case where that business is carried on by that person for only a part of that quarter, the turnover of that business for that part of that quarter is not less than a sum which bears to twenty-five thousand rupees the same proportion as the number of days in that part of that quarter bears to ninety-one. For the purposes of paragraph (c) and paragraph (d), the sum realised by any person carrying on a business from the sale of any article declared to be an excepted article under section 4 shall form part of the turnover of that business.
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(1A) Where a person is chargeable with business turnover tax in respect of any business carried on by him and a change of ownership of that business occurs, then notwithstanding the provisions of subsection (1), the new owner of that business shall be chargeable with business turnover tax as though he had been the owner of that business immediately before the occurrence of the change of ownership.
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(1B)
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(a) Where any person commences to M carry on any business on a day within any year of assessment commencing on or after October 1, 1969, but prior to October 1, 1971, or during the year of assessment commencing on October 1, 1969, begins to make, in the course of carrying on any business started by him prior to that date, regular sales of goods or commodities, such person shall, notwithstanding anything to the contrary in subsection (1), be chargeable with business turnover tax in respect of the turnover made by him during that year of assessment from the business commenced by him, or from the business in the course of which such sales of goods or commodities were made, or, where the business commenced by him or in the course of which such sales of goods or commodities were made together with any other business carried on by him is deemed to be one business for the purposes of this Act, from the business so deemed to be one; Provided, however, that such person shall not be liable to pay business turnover tax-
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(i) for the quarter in which he commenced such business or began to make such sales of goods or commodities if the turnover made by him for that quarter from the business commenced by him, or from the business in the course of which such sales of goods or commodities were made or, where that business together with any other business Is deemed to be one business, from the businesses so deemed to be one business, is less than the sum which bears to eighteen thousand seven hundred and fifty rupees the same proportion as the number of days in the period beginning on the date on which he commenced such business or such sales of goods or commodities, as the case may be, and ending on the last day of that quarter bears to ninety-one, or
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(ii) for any subsequent quarter of that year of assessment if the turnover for that quarter is less than eighteen thousand seven hundred and fifty rupees.
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(b) Where the turnover made by any person for any year of assessment commencing on or after October 1, 1969, but prior to October 1, 1971, from any business commenced by him, or from the sales of goods or commodities made in the year of assessment commencing on October I, 1969, in the course of carrying on any business is less than the sum which bears to seventy-five thousand rupees the same proportion as the number of days in the period beginning on the date of commencement of such business or sales of goods or commodities and ending on the last day of that year of assessment bears to three hundred and sixty-five, such person shall, upon an application made within three years after the expiry of that year of assessment, be entitled to a refund of the tax paid by him under the preceding provisions of this subsection.
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(2) For the purposes of this Act-
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(a) where any business is carried on by a person in more than one place in Sri Lanka, the business carried on by him in each such place shall-
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(i) for any year of assessment ending on or before September 30, 1968, be deemed to be a separate business, and
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(ii) for any year of assessment commencing on or after October 1. 1968. be deemed to be a part of the same business;
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(aa) where businesses of a like nature are carried on by a person in the same place or in different places, the businesses so carried on by him shall, for every year of assessment commencing on or after October 1, 1968, be deemed to be one business; and
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(b) different businesses carried on by the same person in one place shall be deemed to be one business.
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(3)
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(a) For the purposes of this Act ” business” in relation to any year of assessment ending’ on or before September 30, 1968, includes any trade or vocation but does not include-
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(i) any undertaking for the production of unmanufactured or unprocessed agricultural or animal produce ;
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(ii) any undertaking for the purpose of rearing livestock or poultry ;
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(iii) any undertaking for the manufacture of copra, desiccated coconut, coconut fibre, crepe rubber, sheet rubber or tea (other than an undertaking for the blending of tea);
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(iv) any undertaking for the export of any manufactured or processed article;
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(v) the business of a banker, financier, moneylender or pawnbroker;
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(vi) any insurance business;
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(vii) the business of carrying on an educational establishment;
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(viii) any other business the turnover from which may be exempted from the business turnover tax by Order made by the Minister, approved by Parliament and published in the Gazette. and
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(b) For the purposes of this Act “business” in relation to the year of assessment commencing on October 1, 1968, and the next two subsequent years of assessment includes any trade, profession, vocation, or the business of any person taking commissions or fees in respect of any transactions or services rendered, or the business of an independent contractor but does not include-
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(ii) any agricultural undertaking;
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(iii) any undertaking for the export of any manufactured or processed article;
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(iv) the business of a banker, financier, moneylender, pawnbroker, commission agent or broker;
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(v) any insurance business;
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(vi) the business of carrying on an educational establishment; and
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(vii) any other business the turnover from which may be exempted from the business turnover tax by Order made by the Minister, approved by Parliament and published in the Gazette.
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(c) For the purposes of this Act ” business” in relation to any year of assessment commencing on or after October 1, 1971, includes any trade, profession, vocation, or the business of any person taking commissions or fees in respect of any transactions or services rendered, or the business of an independent contractor but does not include-
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(i) any undertaking for the production of unmanufactured or unprocessed agricultural or animal produce ;
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(ii) any undertaking for the purpose of rearing livestock or poultry ;
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(iii) any undertaking for the manufacture [§ 2,3 of copra, desiccated coconut, fibre 1978] from coconut husks, crepe rubber, sheet rubber, block rubber, scrap rubber or tea (other than an undertaking for the blending of tea);
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(iv) any undertaking for the export of [§ 2, 29 of any manufactured or processed 1980] article other than jewellery, or gems within the meaning of the State Gem Corporation Act;
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(v) the business of any bank to the extent of its transactions attributable to the operation of the foreign currency banking unit of such bank;
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(vi) any insurance business ;
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(vii) the business of carrying on an educational establishment or school being an educational establishment or school to which grants from State funds are paid or to which such grants were earlier paid but at present are not paid ;
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*(ix) the business of selling gems within the meaning of the State Gem Corporation Act to the Corporation established under that Act;
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*(xi) any other business the turnover from which may be exempted from the business turnover tax by Order made by the Minister, approved by Parliament and published in the Gazette.
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Excepted articles.
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4.
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(1) The Minister may by Order published in the Gazette declare any article specified in such Order to be an excepted article for the purposes of this Act. Different articles may be declared to be excepted articles in respect of different classes or descriptions of businesses.
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(2) Where an article is, under subsection (1), declared to be an excepted article in respect of any class or description of business, no business turnover tax shall be payable in respect of the sum realized by the sale of such article.
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Payment of business turnover tax.
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5.
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(1) Every person chargeable with business turnover tax shall, in respect of the business carried on by him, pay such tax for any year of assessment in four installments, each such installment being in respect of each quarter of that year of assessment: Provided that no such tax shall be payable in respect of the quarter commencing on October 1, 1963, and ending on December 31, 1963.
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(2) The business turnover tax in respect of any quarter in a year of assessment shall be paid not later than fifteen days after the expiry of that quarter. Any tax not so paid shall be deemed to be in default and the person by whom such tax is payable or, where any tax is payable by more than one person or by a partnership, then each of such persons and each partner in the partnership shall be deemed to be a defaulter for the purposes of this Act.
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(3) Where any business turnover tax is in [§ 3,3 of default, the defaulter shall become liable to 1978] pay, in addition to such tax-
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(a) a penalty of a sum equivalent to five per centum of such tax, and
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(b) where such tax is not paid before the lapse of thirty days after such tax has begun to be in default, a penalty of a sum equivalent to one per centum of such tax in respect of each further period of thirty days or part thereof during which such tax is in default;
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Provided however that-
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(a) where the default is in respect of any business turnover tax payable for any year of assessment commencing prior to October 1, 1975, the total amount payable as penalty under this subsection shall in no case exceed-
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(i) the sum which the defaulter was liable to pay on October 1, 1975, as penalty in respect of the tax in default, or
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(ii) twenty-five per centum of the tax in default, whichever is higher ; and
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(b) where the tax in default is in respect of any business turnover tax payable for any year of assessment commencing on or after October 1, 1975, the total amount payable as penalty under this subsection shall in no case exceed twenty-five per centum of the tax in default, and any such amount may be waived or reduced if the Commissioner-General is satisfied that by reason of any special circumstances in which the default occurred, a waiver or reduction of such amount would be just and equitable.
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(4) Where upon the final determination of an appeal made under section 21, any tax in default to which any sum or sums under subsection (3) has or have been added is reduced, then such sum or sums shall be calculated on the tax as so reduced.
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6.
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(1) Every person who carries on any business m Sri Lanka in any year of assessment commencing on or after October 1, 1971, but prior to October 1, 1977, shall-
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(a) if such business is carried on by him during the entirety of any quarter in any such year of assessment and the turnover of that business for that quarter is not less than eighteen thousand seven hundred and fifty rupees, or
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(b) if such business is carried on by him during a part of a quarter in any such year of assessment and the turnover of that business for that part of that quarter is not less than a sum which bears to eighteen thousand seven hundred and fifty rupees the same proportion as the number of days in that part of the quarter bears to ninety-one, furnish to the Commissioner-General not later than fifteen days after the expiry of that quarter, a return setting out the turnover of that business for that quarter. Every such return shall be in the prescribed form and shall contain all such particulars as may be required to be set out in such form.
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(2) Every person who carries on any business in Sri Lanka in any year of assessment commencing on or after October 1, 1977, shall-
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(a) if such business is carried on by him during the entirety of any quarter in any such year of assessment and the turnover of that business for that quarter is not less than twenty-five thousand rupees, or
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(b) if such business is carried on by him during a part of a quarter in any such year of assessment and the turnover of that business for that part of that quarter is not less than a sum which bears to twenty-five thousand rupees the same proportion as the number of days in that part of the quarter bears to ninety-one, furnish to the Commissioner-General not later than fifteen days from the expiry of that quarter, a return setting out the turnover of that business for that quarter. Every such return shall be in the prescribed form and shall contain all such particulars as may be required to be set out in such form.
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6A. The Commissioner-General may from time to time prescribe the forms to be used for all or any of the purposes of this Act; and any form so prescribed may from time to time be amended or varied by the Commissioner-General, or some other form may be substituted by the Commissioner-General in place of any form so prescribed.
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Power of Assessor to make assessments.
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7.
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(1) Where any person-
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(a) who in the opinion of the Assessor is chargeable with business turnover tax fails to furnish under section 6 a return for any quarter in a year of assessment and to pay that tax for that quarter; or
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(b) who is chargeable with that tax furnishes under section 6 a return in respect of any quarter in a year of assessment but fails to pay that tax for that quarter, the Assessor shall assess the amount of the business turnover tax which such person, in the judgment of the Assessor, ought to have paid for that quarter and shall, by notice in writing, require such person to pay such amount immediately. The amount ‘so assessed in respect of any person for a quarter shall, subject to the provisions of section 8, be deemed to be the amount of the business turnover tax payable by him for that quarter.
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(2) An assessment made under subsection (1) in respect of any person for any quarter in a year of assessment shall not affect the liability of such person to a penalty under section 5 as though the amount assessed were the amount of business turnover tax due from him for that quarter.
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(3) Where, in the opinion of the Assessor, the amount paid as business turnover tax for any quarter of a year of assessment by any person who has failed to furnish under section 6 a return in respect of that quarter is less than the proper amount payable by that person for that quarter, the Assessor shall assess the amount which, in the judgment of the Assessor, ought to have been paid by such person and shall, by notice in writing, require that person to pay on or before a date set out in that notice, the difference between the amount so assessed and the amount paid by that person.
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(4) Where an assessment is made under subsection (3) in respect of any person for any quarter in any year of assessment, the difference between the amount so assessed and the amount paid by that person as business turnover tax for that quarter shall be deemed to be business turnover tax in default for that quarter and accordingly such person shall, from the date on which such person should have paid that tax for that quarter under subsection (2) of section 5, be liable in respect of that amount to the penalty under subsection (3) of that section.
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Additional assessments.
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8.
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(1) Where it appears to an Assessor that a person chargeable with business turnover tax has, for any quarter in a year of assessment, paid as tax an amount less than the proper amount of the tax payable by him for that quarter, or chargeable from him for that quarter, an Assessor may, at any time, assess such person at the additional amount at which, according to the judgment of the Assessor, tax ought to have been paid by such person. The Assessor shall give such person notice of assessment.
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(2) Where an assessment is made under subsection (1) in respect of any person for any quarter in any year of assessment, the amount so assessed shall be deemed to be business turnover tax in default for that quarter and accordingly such person shall, from the date on which such person should have paid the tax for that quarter under section 5 (2), be liable to the penalty under section 5 (3) in respect of such amount.
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Power of Assessor to estimate sale price.
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9. Where any person who carries on the business of a manufacturer of any article sells such article for the purposes of distribution at a price which, in the opinion of the Assessor, reduces or would reduce the business turnover tax payable by him, then, for the purposes of this Part of this Act, such article shall be deemed to have been sold at a price which, in the opinion of the Assessor, it would have fetched in an open market on the date of such sale, and the turnover of such person from such business shall be computed accordingly.
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Assessor to give reasons for not accepting a return.
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10. Where an Assessor does not accept a return furnished by any person under section 6 or under section 9 for any quarter in any year of assessment and makes an assessment or additional assessment on that person for that quarter under section 7 or under section 8, he shall communicate to such person in writing his reasons for not accepting the return.
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Returns and information to be furnished.
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11.
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(1) An Assessor may, by notice in writing, direct any person who, in the judgment of that Assessor, is a person chargeable with business turnover tax to furnish within the time specified in such notice a return containing such particulars as the Assessor may require.
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(2) An Assessor may give notice in writing to any person when and as often as he thinks necessary requiring him to furnish within the time specified in such notice-
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(a) fuller or further returns, or
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(b) fuller or further information relating to any matter as will in the opinion of the Assessor be necessary or relevant for the assessment of the business turnover tax payable by such person.
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(3) For the purpose of obtaining full information in respect of the turnover from any business carried on by any person, an Assessor may give notice in writing to such person requiring him-
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(a) to produce for examination, or transmit to the Assessor, within the period specified in such notice, any such books, accounts, trade lists, stock lists, registers, cheques, paying in slips, auditors’ reports, or other documents in his possession as may be specified in such notice;
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(b) to attend in person or by an authorized representative at such place and on such date and at such time as may be specified in the notice for the purpose of being examined regarding the turnover in respect of that business.
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(4) For the purposes of this Act, a Deputy Commissioner may give notice in writing to any person requiring him-
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(a) to attend in person or by an authorized representative at such place and on such date and at such time as may be specified in such notice so that he may be examined on any such matter or matters as may be specified in the notice;
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(b) to produce, or transmit to such Deputy Commissioner within the period specified in such notice any books, accounts, trade lists, stock lists, registers, cheques, paying in slips, auditors’ reports, or other documents in his possession as may be specified in such notice.
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(5) A person who attends in compliance with a notice given under subsection (4) may be allowed by the Commissioner-General the expenses reasonably incurred by him in so attending.
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(6) A Deputy Commissioner, or an Assessor with the approval of a Deputy Commissioner, may retain in his custody, as long as such retention is necessary for the purposes of this Act, any books, accounts, trade lists, stock lists, registers, cheques, paying in slips, auditors’ reports, or other documents which are or have been produced before him or transmitted to him under subsection (3) or subsection (4) or which otherwise come or have come into his possession.
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(7) A return, statement or form purporting to be furnished under this Act by or on behalf of any person shall for all purposes be deemed to have been furnished by that person or by his authority, as the case may be, unless the contrary is proved, and any person signing any such return, statement or form shall be deemed to be cognize of all matters therein.
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Information to be furnished by officials.
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12. The Commissioner-General may give notice in writing to any officer in the employment of the Government or of any local authority or other public body requiring him to furnish within the period specified in such notice any such particulars which he may require for the purposes of this Act as may be in the possession of such officer; Provided that no such officer shall by virtue of this section be obliged to disclose any particulars as to which he is under any express statutory obligation to observe secrecy.
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Vouchers to be issued by persons chargeable with business turnover tax.
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13 Every person chargeable with business turnover tax shall, in respect of each transaction entered into by him in the pursuit of any business in relation to which such tax is payable, prepare or cause to be prepared a voucher setting out-
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(a) the date on which such transaction was entered into;
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(b) the nature of such transaction; and
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(c) the amount of money received or [§ l, 50 of receivable in respect of such 1968J transaction. The original of such voucher shall be issued to the person with whom such transaction was entered into and the copy of such voucher shall be retained and preserved by the person by whom or on whose behalf such voucher was prepared for a period of five years after the expiry of the year of assessment in which such voucher was prepared.
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Maintenance of registers.
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14.
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(1) Every person chargeable with business turnover tax shall keep and of maintain in respect of each year of assessment a register of transactions.
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(2) The register of transactions kept by any person in respect of any year of assessment shall be retained and preserved by him for a period of five years after the expiry of that year of assessment.
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Who may act for incapacitated person.
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15. Any act or thing required by or under this Act to be done by any person shall, if such person is an incapacitated person, be deemed to be required to be done by the trustee of such incapacitated person.
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Precedent partner to act on behalf of partnership.
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16. Any act or thing required by or under this Act to be done by any person shall, in the case of two or more persons in partnership, be deemed to be required to be done by the precedent partner of such partnership: Provided that any person to whom a notice has been given under the provisions of this Act as a precedent partner of a partnership shall be deemed to be the precedent partner thereof unless he proves that he is not a partner of such partnership or that some other person in Sri Lanka is the precedent partner thereof.
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Principal officer to act on behalf of a company or body of persons.
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17. The provisions of section 90 of the Inland Revenue Act, No. 4 of 1963, or section 146 of the Inland Revenue Act (No. 28 of 1979) shall apply as if such provisions were provisions of this Act and refer to this Act instead of the Inland Revenue Acts.
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Liability of certain persons to pay business turnover tax in respect of businesses not belonging to them.
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18.
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(1) Where any business in respect of which business turnover tax is payable is carried on by any person on behalf of any other person as the agent of such other person, the first-mentioned person shall be chargeable with business turnover tax in respect of that business in like manner and to the like amount as the latter-mentioned person would be chargeable under this Act.
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(2) Where any business in respect of which business turnover tax is payable is subject to a trust, the trustee of that trust shall be liable to pay such tax in respect of such business.
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Joint agents, trustees and executors.
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19. Where two or more persons act in the capacity of trustees of a trust or executors of a deceased person’s estate, they may be charged jointly and severally with the business turnover tax with which they are chargeable under this Act, and shall be jointly and severally liable for payment of such tax.
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Persons liable to pay business turnover tax upon liquidation of a company or dissolution of a body of persons.
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20.
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(1) Notwithstanding anything in the Companies Ordinance,* where a company is wound up and where any business turnover tax to which that company is liable cannot be recovered, then, every person who was a director of the company at any time during the period in respect of which such tax is charged shall be jointly and severally liable for the payment of such tax unless he proves that the default in payment of tax cannot be attributed to any gross -neglect, misfeasance or breach of duty on his part in relation to the affairs of the company, and the provisions of this Act as to collection and recovery of business turnover tax shall apply accordingly
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(2) Where a body of persons is dissolved and where any business turnover tax to which such body of persons is liable cannot be recovered, then, every person who was a member of that body of persons during the period in respect of which the tax is charged shall be jointly and severally liable for the payment of such tax unless he proves that the default in payment of tax cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of that body, and the provisions of this Act as to collection and recovery of business turnover tax shall apply accordingly.
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Deduction of turnover tax from payments.
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20A.
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(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;
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Provided that where the total consideration payable for the performance of such contract does not exceed five hundred thousand rupees no such deduction shall be made.
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(2) Any person who deducts business turn over tax in accordance with the provisions of sub-section (1) shall-
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(a) issue to the person from whose payment the deduction is made a statement showing
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(i) the gross amount of such payment;
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(ii) the rate and amount of tax so deducted; and
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(iii) the net amount actually paid; and
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(b) remit within seven days of making such deduction the sum so deducted to the commissioner-General together with a statement showing-
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(i) the name and address of the person to whom the payment was made;
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(ii) the gross amount of such payment ;
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(iii) the rate and amount of tax So deducted; and
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(iv) the net amount actually paid.
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(3) Where the turnover of a person includes a sum from which business turnover tax has been deducted in accordance with subsection (1), he shall be entitled on production 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.
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(4) For the purposes of this section ” contract” means-
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(i) any contract in respect of construction work of whatever nature;
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(ii) any contract for the supply of goods or services in respect of any con tract specified in paragraph (i) ;
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(iii) any sub-contract in respect of any contract specified in paragraph (i) or (ii).
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(5) Any person who fails to deduct business turnover tax in terms of subsection (1) or fails to remit under subsection (2) any business turnover tax to the Commissioner-General shall be deemed to be in default and the provisions of this Part of this Act relating to recovery of business turnover tax shall accordingly apply to any such default.
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(6) Any person who has made any deduction 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 deduction or remittance, as the case may be, against all proceedings, civil or criminal, notwithstanding the provisions of any written law, contract or agreement.
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(7) 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).
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Appeals to the Commissioner-General.
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21.
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(1) Any person may, if he is dissatisfied with any assessment or additional assessment made in respect of him by an Assessor, appeal against such assessment or additional assessment to the Commissioner-General, within thirty days after the service of notice of such assessment or additional assessment. Such person shall, notwithstanding the appeal, pay the business turnover tax charged by such assessment or additional assessment together with any penalty imposed on him by this Act: Provided that the Commissioner-General, upon being satisfied that owing to absence from Sri Lanka, sickness or other reasonable cause, the appellant was prevented from appealing within such period, shall grant an extension of time for preferring the appeal.
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[ 8, 50 of 1968]
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[ [ 6, 55 of 1971]
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(1A) Where the assessment or additional assessment appealed against has been made in the absence of a return, the petition of appeal shall be sent together with a return duty made.
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(1B) A petition of appeal shall be rejected by the. Commissioner-General-
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(a) if it is made after the expiry of the period allowed under subsection (1) for the making of an appeal, or
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(b) if the appellant has failed to comply with the provisions of subsection (1 A).
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(1C) On receipt of a petition of appeal made in conformity with the provisions of subsection (1) and subsection (1A), the Commissioner-General may cause further inquiry to be made by an Assessor, and, if in the course of such inquiry an agreement is reached as to the matters specified in the petition of appeal, any necessary adjustment of the assessment shall be made and where no agreement is reached, the Assessor shall refer the appeal to the Commissioner-General for his decision.
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(2) The Commissioner-General shall, before reaching his decision on any appeal made to him under subsection (1), give the appellant an opportunity of placing his case before the Commissioner-General either in person or by his authorized representative.
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(3) The Commissioner-General may, upon any appeal made to him under subsection (1), confirm, reduce, increase or annul the assessment or additional assessment against which such appeal was made-
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(4) Any person aggrieved by the decision of the Commissioner-General upon any appeal made to him under subsection (1) may appeal from that decision to the Board of Review constituted under the Inland Revenue Act (No. 28 of 1979), and the provisions of that Act relating to appeals to such Board of Review shall mutatis mutandis apply to an appeal under this subsection.
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Assessments or amended assessments to be final.
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22. Where no valid appeal has been lodged within the time specified in this Act against an assessment in respect of business turnover tax, or where the amount of such tax has been determined on appeal, the assessment as made, or reduced, or increased or confirmed on appeal, as the case may be, shall be final and conclusive for all purposes of this Act as regards the amount of such tax ; Provided that nothing in this Act shall prevent an Assessor from making an assessment or additional assessment for any quarter in a year of assessment if it does not involve reopening any matter which has been determined on appeal for that quarter.
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Penalty for under payment of business turnover tax.
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23. Where in an assessment made in respect of any person the amount of business turnover tax exceeds the amount already paid by him as the amount due from him in respect of the turnover specified in his return and the assessment is final and conclusive under section 22, the Commissioner-General may, unless that person proves to the satisfaction of the Commissioner-General that there is no fraud or willful neglect involved in the disclosure of the turnover made by that person in his return, in writing order that person to pay as a penalty for making an incorrect return a sum not exceeding two thousand rupees and a sum equal to twice the tax on the difference between the turnover on which the assessment was made and the turnover specified in his return.
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Meaning of ” business turnover tax ” for the purposes of sections 25 to 31.
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24. For the purposes of section 25, section 26, section 27, section 28, section 29, section 30 and section 31, “business turnover tax ” includes any penalty imposed or incurred under this Act.
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Business turnover tax to be first charge.
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25. Any business turnover tax in default shall be a first charge upon all the assets of the defaulter:
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Provided that-
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(i) such charge shall not extend to or affect any assets sold by the defaulter to a bona fide purchaser for value prior to the seizure of the same in accordance with the provisions of section 26;
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(ii) as regards immovable property, the business turnover tax shall not rank in priority to any lease or encumbrance created bona fide for value and registered prior to the date of such seizure ; and
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(iii) as regards movable property, where business turnover tax for more than one year of assessment is in default, the tax for one year only, to be selected by the Commissioner-General, shall rank in priority to any lien or encumbrance created bona fide for value prior to the date of default.
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Recovery of business turnover tax by seizure and sale.
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26.
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(1) The Commissioner-General may appoint persons to be tax collectors for the purposes of this Act.
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(2)
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(a) Where any business turnover tax is in default, the Commissioner-General may issue a certificate to a Government Agent, Assistant Government Agent or tax collector containing particulars of such tax and the name of the defaulter, and the officer to whom such certificate is issued shall be empowered and is hereby required to cause the tax to be recovered from the defaulter named in the certificate by seizure and sale of his movable property.
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(b) The said seizure shall be effected in such manner as the said officer shall deem most expedient in that behalf, and any property so seized shall be kept for five days at the costs and charges of the defaulter. If the defaulter does not pay the tax in default together with the costs and charges within the said five days, the Government Agent, Assistant Government Agent or tax collector shall cause the said property to be sold by public auction.
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(c) The sum realized by the sale shall be applied-
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(i) firstly in payment of the costs and charges of seizing, keeping’ and selling the property, and
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(ii) secondly in satisfaction of the tax in default, and any balance shall be paid to the owner of the property seized.
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(3) Where any business turnover tax is in default, and the Commissioner-General is of opinion that recovery by the means provided in subsection (2) is impracticable or inexpedient, he may issue a certificate to a District Court having jurisdiction in any district where the defaulter resides or in which any property movable or immovable owned by the defaulter is situate, containing particulars of such tax and the name or names of the person or persons by whom the tax is payable, and the Court shall thereupon direct a writ of execution to issue to the Fiscal authorizing and requiring him to seize and sell all or any of the property movable and immovable of the defaulter, or such part thereof as he may deem necessary for recovery of the tax, and the provisions of sections 226 to 297 of the Civil Procedure Code shall, mutatis mutandis, apply to such seizure and sale.
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(4) Whenever the Commissioner-General issues a certificate under this section, he shall at the same time issue to the defaulter a notification thereof by personal service or by registered letter sent through the post or by telegraph; but the non-receipt of such notification by the defaulter shall not invalidate proceedings under this section.
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Proceedings for recovery before a magistrate.
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27.
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(1) Where the Commissioner-General is of opinion in any case that recovery of business turnover tax in default by seizure and sale is impracticable or inexpedient, or where the full amount of the tax has not been recovered by seizure and sale, he may issue a certificate containing particulars of such tax and the name and last known place of business or residence of the defaulter to a Magistrate having jurisdiction in the division in which such place is situate. The Magistrate shall thereupon summon such defaulter before him to show cause why further proceedings for the recovery of the tax should not be taken against him, and in default of sufficient cause being shown, the tax in default shall be deemed to be a fine imposed by a sentence of the Magistrate on such defaulter for an offence punishable with fine only or not punishable with imprisonment, and the provisions of subsection (1) of section 291 (except paragraphs (a), (d) and (i) thereof) of the Code of Criminal Procedure Act, relating to default of payment of a fine imposed for such an offence shall thereupon apply, and the Magistrate may make any direction which, by the provisions of that subsection, he could have made at the time of imposing such sentence:
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Provided that nothing in this section shall authorize or require the Magistrate in any proceeding thereunder to consider, examine or decide the correctness of any statement in the certificate of the Commissioner-General.
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(2) Nothing in subsections (2) to (5) of section 291 of the Code of Criminal Procedure Act shall apply in any case referred to in subsection (1) of this section.
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(3) In any case referred to in subsection (1) in which the defaulter is sentenced to imprisonment in default of payment of the fine deemed by that subsection to have been imposed on him, the Magistrate may allow time for the payment of the amount of the said fine or direct payment of that amount to be made by installments.
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(4) The court may require bail to be given as a condition precedent to allowing time under subsection (1) for showing cause as therein provided or under subsection (3) for the payment of the fine ; and the provisions of Chapter XXXIV of the Code of Criminal Procedure Act shall apply where the defaulter is so required to give bail.
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(5) Where payment in installments is directed under subsection (3) and default is made in the payment of any one installment, the same proceedings may be taken as if default had been made in payment of all the installments then remaining unpaid.
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(6) In any proceeding under subsection (1), the Commissioner-General’s certificate shall be sufficient evidence that the tax is in default, and any plea that the tax is excessive, incorrect, or under appeal shall not be entertained:
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Provided that where any person proceeded against has not appealed within the proper time against the assessment in respect of which the tax is charged and alleges that the tax is in excess of the sum which would have been charged if he had so appealed, the court may adjourn the matter for a period not exceeding thirty days to enable such person to submit to the Commissioner-General his objection to the tax.
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(7) The Commissioner-General shall, notwithstanding the provisions of section 22, consider any objection made under subsection (6) and give his decision thereon, which shall be final, and shall be certified by him to the Magistrate, and proceedings under this section shall thereupon be resumed to enforce payment of the tax as reduced or confirmed under such decision. Where no objection has been made to the Commissioner-General within the period for which the matter was adjourned under that subsection, the Commissioner-General shall issue a certificate to that effect and proceedings under this section shall be resumed to enforce payment of the tax,
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Recovery of business turnover tax out of debts. &c.
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28.
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(1) Where the business turnover tax payable by any person is in default and it appears to the Commissioner-General to be probable that any person-
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(a) owes or is about to pay money to the defaulter or his agent; or
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(b) holds money for or on account of the defaulter or his agent; or
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(c) holds money on account of some other person for payment to the defaulter or his agent; or
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(d) has authority from some other person to pay money to the defaulter or his agent, the Commissioner-General may give to such person notice in writing (a copy of which shall be sent by post to the defaulter) requiring him to pay any such moneys not exceeding the amount of the tax in default to the officer named in such notice.
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The notice shall apply to all such moneys which are in his hands or due from him or about to be paid by him at the date of receipt of such notice, or come into his hands or become due from him or are about to be paid by him at any time within a period of three months after the date of such notice.
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(2) Any person who has made any payment in pursuance of this section 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 payment against all proceedings, civil or criminal, notwithstanding the provisions of any written law, contract or agreement.
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(3) Where any person to whom a notice has been given under subsection (1) is unable to comply therewith owing to the fact that the moneys in question do not come into his hands or become due from him within the period referred to in subsection (1), he shall within fourteen days of the expiration thereof give notice in writing to the Commissioner-General acquainting him with the facts.
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(4) Where any person to whom a notice has been given under subsection (1) is unable to comply therewith and has failed to give notice to the Commissioner-General as provided in subsection (3), or where such person has deducted or could have deducted the tax to which the notice relates or any part thereof and has not paid over as directed by the Commissioner-General the amount of such tax or part thereof within fourteen days after the expiration of the period referred to in subsection (1), such person shall, if he is an individual be liable, or where such person is a company or body of persons, whether corporate, or unincorporate, the secretary, manager or other principal officer of such company or body shall be personally liable, for the whole of the tax which such person has been required to deduct, and such tax may be recovered from such individual, secretary, manager or other principal officer by all means provided in this Act.
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(5) For the purposes of this section, the expression ” defaulter ” shall be deemed to include the agent or authorized representative of a person who is in default and the provisions of this section shall apply in any case where the tax which would have been payable by any person if he were alive is in default; and for the purposes of the application of those provisions in any such case, the expression ” defaulter” in subsection (1) means-
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(a) the executor or administrator of a deceased person, or
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(b) any person who takes possession of, or intermeddles with, the property of a deceased person, or
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(c) any person who has applied or is entitled to apply to a District Court for the grant or resealing of probate or letters of administration in respect of the estate of a deceased person.
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Recovery of business turnover tax from persons leaving Sri Lanka.
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29.
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(1) Where the Commissioner- General is of opinion that any person is about to or likely to leave Sri Lanka without paying the business turnover tax due from him, the Commissioner-General may issue a certificate containing particulars of such tax and the name of such person to a Magistrate, who shall on receipt thereof issue a direction to the Inspector-General of Police to take such measures as may be necessary to prevent such person from leaving Sri Lanka without paying the tax or furnishing security to the satisfaction of the Commissioner-General for payment thereof.
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(2) At the time of issue of his certificate to the Magistrate, the Commissioner- General shall issue to such person a notification thereof by personal service, registered letter sent through the post or telegraph ; but the non-receipt of any such notification by such person shall not invalidate proceedings under this section.
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(3) The production of a certificate signed by the Commissioner-General or a Commissioner or a Deputy Commissioner stating that the tax has been paid or that security has been furnished, or the payment of the tax to a police officer in charge of a police station, shall be sufficient authority for allowing such person to leave Sri Lanka.
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Use of more than one means of recovery.
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30. Where the Commissioner-General is of opinion that application of any one of the means of recovery provided in this Act has failed or is likely to fail to secure payment of the whole of any business turnover tax due under this Act from any person, it shall be lawful for the Commissioner-General to proceed to recover any sum remaining unpaid by any other means of recovery provided in this Act, notwithstanding that an order has been made by a Magistrate under section 27 and carried into effect.
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Power of Commissioner-General to obtain information for the recovery of business turnover tax.
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31. The Commissioner-General may, by notice given in writing to any person, require that person within the period specified in such notice to furnish any information which the Commissioner- General may require for the purpose of recovering any business turnover tax due from such person or some other person.
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Signature and service of notices.
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32.
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(1) Every notice to be given by the Commissioner-General, a Deputy Commissioner or an Assessor under this Act shall bear the name of the Commissioner-General or Deputy Commissioner or Assessor, as the case may be, and every such notice shall be valid if the name of the Commissioner-General, Deputy Commissioner or Assessor is duly printed or signed thereon.
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(2) Every notice given by virtue of this Act may be served on a person either personally or by being delivered at, or sent by post to, his last known place of abode or any place at which he is, or was, during the period to which the notice relates carrying on business: Provided that a notice of assessment under section 7 or section 8 shall be served personally or by being sent by post by registered letter to any such place as aforesaid.
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(3) Any notice sent by post shall be deemed to have been served on the day succeeding the day on which it would have been received in the ordinary course of post.
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(4) In proving service by post it shall be sufficient to prove that the letter containing the notice was duly addressed and posted.
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(5) Every name printed or signed on any notice or signed on any certificate given or issued for the purposes of this Act, which purports to be the name of the person authorized to give or issue the same, shall be judicially noticed.
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Validity of assessments.
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33.
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(1) No notice, assessment, certificate or other proceeding purporting to be in accordance with the provisions of this Act shall be quashed, or deemed to be void or voidable, for want of form or be affected by reason of a mistake, defect or omission therein, if the same is in substance and effect in conformity with or according to the intent and meaning of this Act, and if the person assessed or intended to be assessed or affected thereby is designated therein according to common intent and understanding.
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(2) Without prejudice to the generality of subsection (1), an assessment shall not be impeached or affected-
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(a) by reason of a mistake therein as to the name or surname of the person chargeable, the amount of turnover or the amount of business turnover tax charged ; or
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(b) by reason of any variance between the assessment and the notice thereof, if the notice of such assessment is duly served on the person intended to be charged and contains in substance and effect the particulars mentioned in paragraph (a) of this subsection.
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Power to search buildings or places.
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34.
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(1) Any officer of the Department of Inland Revenue who is specially authorized by the Commissioner-General in that behalf may, accompanied by a peace officer, do all or any of the following acts:-
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(a) enter and search any building or place where he has reason to believe that any books of account, registers, records or other documents which in his opinion will be useful for, or relevant to, any proceeding under this Act may be found and examine them, if found;
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(b) seize any such books of account, registers, records or other documents or place marks of identification thereon or make extracts or copies therefrom;
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(c) make a note or an inventory of any other thing found in the course of any search under this section which in his opinion will be useful for, or relevant to, any proceedings under this Act, and the provisions of the Code of Criminal Procedure Act relating to searches shall apply so far as may be to searches under this section. In this subsection ” peace officer” shall have the same meaning as in the Code of Criminal Procedure Act.
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(2) Before authorizing any officer to exercise the powers under subsection (1), Commissioner-General shall record the circumstances which necessitate the exercise of those powers by that officer.
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(3) Where any officer authorized by the Commissioner-General under subsection (1) seizes any book of account, register, record or other document from any person, such officer shall issue to that person a memorandum specifying the book, register, record or other document he has seized.
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(4) Any book of account, register, record or other document seized under subsection (1) by any officer may be retained in the possession of such officer as long as may be necessary for a scrutiny of such book, register, record or other document or for the institution of legal proceedings against the person to whom such book, register, record or other document belongs.
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(5) The Commissioner-General or any other officer of the Department of Inland Revenue who is specially authorized in that behalf by the Commissioner-General in writing may do all or any of the following acts:-
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(a) enter and inspect any place or building where any business is carried on by any person for the purpose of ascertaining whether the provisions of this Act are being complied with;
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(aa) open and examine any receptacle [§ 10,50 of where any book of account, 1968] register, record or other document may be found and make an inventory of any of the articles found therein;
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(b) examine and take copies of, or make [§ l0,50 of extracts from, any book of account, 1968] register, record or other document found in such place or building;
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(bb) count and make a record [§ 10,50 of immediately of the cash found in 1968] such place or building;
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(c) require any person whom he finds in such place or building to give such information as is in his power to give with respect to matters under this Act;
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(d) examine, either alone or in the presence of any other person, as he thinks fit, with respect to matters under this Act, every person whom he finds in such place or building.
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Business turnover tax paid in excess to be refunded.
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35.
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(1) If it is proved to the satisfaction of the Commissioner-General by claim duly made in writing within three years after the end of a quarter of a year of assessment that any person has paid any business turnover tax in excess of the amount with which he was properly chargeable for that quarter, such person shall be entitled to have refunded the amount so paid in excess.
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(2) Where it is proved to the satisfaction of the Commissioner-General by claim made in writing that any person has paid any sum referred to in subsection (3) of section 5 which is in excess of the sum which he should have paid if such sum were calculated in accordance with the provisions of subsection (4) of that section, such person shall be entitled to have refunded the amount so paid in excess, if such claim is made within three years of the end of the year of assessment in which the sum referred to in the aforesaid subsection (3) was paid.
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(3) Where any person carrying on a business has paid the business turnover tax in respect of that business for one or more of the quarters in any year of assessment commencing on or after October 1, 1971, but prior to October 1, 1977, and the turnover of that business tax for that year of assessment-
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(a) in the case where that business was carried on during the entirety of that year of assessment, is less than seventy-five thousand rupees, or
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(b) in the case where that business was carried on for only a part of that year of assessment, is less than the sum which bears to seventy-five thousand rupees the same proportion as the number of days in the period during which he carried on that business in that year of assessment bears to three hundred and sixty-five, such person shall, upon application made within three years after the expiry of that year of assessment, be entitled to a refund of the business turnover tax paid by him in respect of such quarter or quarters.
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(4) Where any person carrying on a [§ 5,26 of business has paid the business turnover tax 1978] in respect of that business for one or more of the quarters in any year of assessment commencing on or after October 1, 1977, and the turnover of that business for that year of assessment-
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(a) in the case where that business was carried on during the entirety of that year of assessment, is less than one hundred thousand rupees, or
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(b) in the case where that business was carried on for only a part of that year of assessment, is less than the sum which bears to one hundred thousand rupees the same proportion as the number of days in the period during which he carried on that business in that year of assessment bears to three hundred and sixty-five, such person shall, upon application made within three years after the expiry of that year of assessment, be entitled to a refund of the business turnover tax paid by him in respect of such quarter or quarters :
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Provided that nothing in this section shall operate to extend or reduce the time limit for appeal or to validate any objection or appeal which is otherwise invalid or to authorize the revision of any assessment or other matter which has become final and conclusive.
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Repayment to an exporter of the business turnover tax paid on articles exported.
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35A.
|
(1) Subject to the provisions of subsection (3), where any article is exported from Sri Lanka by any person (hereafter in this section referred to as the ” exporter “) and the Commissioner-General is satisfied-
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(a) that such article was produced or manufactured in Sri Lanka and was purchased by the exporter from the manufacturer or producer of such article;
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(b) that the price paid by the exporter for the purchase of such article forms part of the turnover of the business of that manufacturer or producer; and
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(c) that business turnover tax has in fact been paid by that manufacturer or producer in respect of the turnover of his business, such amount out of the business turnover tax paid in respect of the turnover of that business by the manufacturer or producer of that article as is attributable to the purchase price paid for that article by the exporter, shall be paid to the exporter by the Commissioner-General.
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(2) The provisions of subsection (1) shall apply in relation to any container, receptacle or wrapper in which an article referred to in that subsection is exported in the same manner as if all references to ” article ” in those provisions were references to such container, receptacle or wrapper, as the case may be.
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(3) No payment under subsection (1) shall be made by the Commissioner-General in respect of any article or any article and container, receptacle or wrapper in which such article is exported, unless a claim in writing for such payment is made by the exporter of such article not earlier than three months, and not later than nine months, after the export of such article.
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Administration of this Act.
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36.
|
(1) The Commissioner-General of inland Revenue shall be in charge of the administration of this Act.
|
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(2) A “Deputy Commissioner exercising or performing any power, duty or function of the Commissioner-General under this Act shall be deemed for all purposes to be authorized to exercise or perform that power, duty or function until the contrary is proved.
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(3) A Deputy Commissioner may exercise any power conferred on an Assessor by this Act.
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Official secrecy.
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37.
|
(1) Except in the performance of his duties under this Act, every person who is or has been employed in carrying out or in assisting any person to carry out the provisions of this Act, shall preserve and aid in preserving secrecy with regard to all matters relating to the affairs of any person that may come to his knowledge in the performance of his duties under this Act, and shall not communicate any such matter to any person other than the person to whom such matter relates or his authorized representative or to the Minister or the Secretary to the Ministry charged with the subject of Finance nor suffer or permit any person to have access to any records in the possession, custody or control of the Commissioner-General.
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(2) Every person employed in carrying out the provisions of this Act shall before acting under this Act, and the Minister and the Secretary to the Ministry charged with the subject of Finance may before acting under this Act, take and subscribe before a Justice of the Peace an oath of secrecy in the prescribed form.
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(3) No person employed in carrying out the provisions of this Act shall be required to produce in any court any return, document or assessment or to divulge or communicate to any court any matter or thing coming under his notice in the performance of his duties under this Act, except as may be necessary for the purpose of carrying into effect the provisions of this Act or any other written law administered by the Commissioner-General.
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(4) Notwithstanding anything contained in this section, any officer of the Department of Inland Revenue may communicate any matter which comes to his knowledge in the performance of his duties under this Act or under any other written law administered by the Commissioner- General to any other officer of that Department if the communication is necessary for the performance of any duty under this Act or under any such other [§12,50 of written law and the Commissioner-General 1968] may, notwithstanding anything in the Evidence Ordinance relating to the proof of documents, produce or cause to be produced in any court, in any proceedings under this Act, a copy of any particulars contained in any return or document received by him or in his possession under this Act or under any other written law administered by him, certified by him or on his behalf to be a correct copy of such particulars :
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Provided that the Commissioner-General may produce or cause to be produced the original of any such return or document in any case where it is necessary to prove the handwriting or the signature of the person who wrote, made, signed or furnished such return or document, but only for the purpose of such proof; Provided, further, that the Commissioner-General shall not in any case be compelled to produce in any court either the original of such document or return or copy of any particulars contained in such document or return. (5) Notwithstanding anything contained in this section, the Commissioner-General may permit the Auditor-General or any officer of the Department of the Auditor-General duly authorized by him in that behalf to have such access to any records or documents as may be necessary for the performance of his official duties. The Auditor-General or any officer authorized by him under this subsection shall be deemed to be a person employed in carrying out the provisions of this Act for the purposes of subsection (2).
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Offences.
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38.
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(1) Every person who-
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(a) fails to comply with the provisions of section 6 or section 11 or section 12 of this Act; or
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(b) fails to comply with the requirements of a notice issued to him under section 9 or section 10 of this Act; or
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(c) having appeared before an officer in compliance with a notice issued to him under section 9 of this Act, fails without sufficient cause to answer any question lawfully put to him by such officer; or
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(d) gives false answers whether orally or in writing to any question or information asked for in accordance with the provisions of this Act; or
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(e) omits from any return made under this Act any particulars which he is required to include therein under this Act; or
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(f) makes any false return or false entry in any return made under this Act; or
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(g) gives any incorrect information relating to any matter or thing affecting his own liability to the business turnover tax or the liability of any other person ; or
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(h) willfully obstructs or delays the Commissioner-General or any other officer in the exercise of his powers under section 34; or
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(i) acts under this Act without taking an oath of secrecy as required by section 37; or
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(j) acts contrary to the provisions of section 37 or to an oath taken under that section; or
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(k) aids, abets or incites any other person to act contrary to the provisions of this Act, shall be guilty of an offence and shall, on conviction after summary trial before a Magistrate, be liable to a fine not exceeding one thousand rupees or to imprisonment of either description for a term not exceeding six months or to both such fine and imprisonment.
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(2) The Commissioner-General may compound any offence under subsection (1) and may before judgment stay or compound any proceedings thereunder.
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Prosecutions to be with the sanction of the Commissioner-General.
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39. No prosecution in respect Of an offence under section 38 shall commenced except at the instance, or with the sanction, of the Commissioner-General.
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Business turnover tax to be a deduction for income tax purposes.
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40. Where any person chargeable with business turnover tax is liable to income tax under the Inland Revenue Act, No. 4 of 1963, or the Inland Revenue Act (No. 28 of 1979), then, for the purposes of ascertaining the profits or income of that person for any period under those Acts, the business turnover tax which that person is liable to pay for that period shall be allowed as a deduction under section 10 of the Inland Revenue Act, No. 4 of 1963, or section 23 of the Inland Revenue Act (No. 28 of 1979): Provided that the preceding provisions of this section shall not apply to any assessment which under section 103 of the Inland Revenue Act, No. 4 of 1963, or section 123 of the Inland Revenue Act (No. 28 of 1979) is final and conclusive.
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Regulations.
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41.
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(1) The Minister may make regulations to give effect to the principles and provisions of this Act.
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(2) In particular and without prejudice to the generality of the powers conferred by subsection (1), the Minister may make regulations in respect of-
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(a) the procedure to be followed in respect of applications for refunds ; and
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(b) any matter which is stated or required by this Act to be prescribed.
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(3) Every regulation made by the Minister 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 in the regulation.
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(4) Every regulation made by the Minister shall, as soon as convenient after its publication in the Gazette, be brought before Parliament for approval. Any regulation which is not so approved shall be deemed to be rescinded as from the date of disapproval, but without prejudice to anything previously done thereunder, Notification of the date on which a regulation is deemed to be rescinded shall be published in the Gazette.
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Interpretation.
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42.
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(1) In this Act, unless the context otherwise requires-
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“accounting period “-
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(a) in relation to any business in respect of which annual accounts are made up, means the period of twelve months for which such accounts are made up, and
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(b) in relation to any business in respect of which no annual accounts are made up, means such period of twelve months as the Commissioner-General may determine;
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” agent” includes any person having the direction, control or management of any business on behalf of any other person;
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” agricultural undertaking ” includes animal husbandry;
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” article ” includes any goods or material;
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” Assessor” means an Assessor of Inland Revenue appointed or deemed to be appointed for the purposes of the Inland Revenue Act (No. 28 of 1979), and includes a Senior Assessor of Inland Revenue;
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“authorized representative” means any
[13,50 of individual- 1968]
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(1) who is authorized in writing by a person to act on his behalf for the purposes of this Act and who is-
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(a) in any case-
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(i) a member of the Institute of Chartered Accountants of Sri Lanka, or of any other Institute established by law, and possesses a certificate to practice as an Accountant issued by the Council of such Institute ; or a firm of Accountants each of the resident partners of which, being a member of the Institute of Chartered Accountants of Sri Lanka or of any other Institute established by law, possesses a certificate to practice as an Accountant issued by the Council of such institute,
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(ii) an accountant approved by the Commissioner-General,
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(iii) an attomey-at-law, or
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(iv) an employee regularly employed by the person concerned;
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(b) in the case of an individual, a relative;
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(c) in the case of a company, a director or the secretary;
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(d) in the case of a partnership, a partner;
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(e) in the case of a body of persons, a member of such body; or
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(2) who is authorized in writing from time to time, by a person to act on his behalf for the purposes of this Act in respect of matters relating to such year of assessment as is specified in the authorization and who, being an individual registered as an auditor under the Companies (Auditors) Regulations, is approved by the Commissioner-General;
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” body of persons” includes any body corporate or unincorporate, any department or undertaking of the Government of Sri Lanka, any fraternity, fellowship, association or society of persons, whether corporate or unincorporate, any partnership and any Hindu undivided family;
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” Commissioner ” means a Commissioner of Inland Revenue appointed or deemed to be appointed for the purposes of the Inland Revenue Act (No. 28 of 1979);
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“Commissioner-General” means the Commissioner-General of Inland Revenue appointed or deemed to be appointed under the Inland Revenue Act (No. 28 of 1979), and includes a Commissioner and a Deputy Commissioner who is specially authorized by the Commissioner-General either generally or for some specific purpose to act on behalf of the Commissioner-General;
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” company ” means any company incorporated or registered under any law in force in Sri Lanka or elsewhere;
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” Deputy Commissioner ” means a Deputy Commissioner of Inland Revenue appointed or deemed to be appointed for the purposes of the Inland Revenue Act (No. 28 of 1979);
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” excepted article” means any article declared to be an excepted article under section 4;
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“executor” means an executor or administrator of a deceased person and includes-
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(a) any person who takes possession of or intermeddles with the profits of a deceased person;
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(b) any person who has applied or is entitled to apply to a District Court for the grant or resealing of probate or letters of administration in respect of the estate of a deceased person; or
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(c) a trustee acting under a trust created by the last will of the author of the trust; ” foreign currency has the same meaning [§2,7 of as in the Exchange Control Act; 1973]
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” incapacitated person” means any minor, lunatic, idiot or person of unsound mind;
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“local authority” means any Municipal Council, Urban Council, Town Council or Village Council and any other body constituted under any law of Sri Lanka for any purpose relating to Local Government;
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“manufacturer” means any person 1978] who-
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(b) assembles or joins any article whether by chemical process or otherwise,
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(c) adapts for sale any article,
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(d) packages, bottles, puts up in boxes, cuts into pieces, cleans, polishes, wraps, labels or in any other way whatsoever prepares for sale any article, otherwise than in a retail store for the purpose of sale in such store exclusively and directly to the consumer,
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(e) purchases from any enterprise with which an agreement has been entered into by the Greater Colombo Economic Commission under section 17 of the Greater Colombo Economic Commission Law, any article manufactured in Sri Lanka by such enterprise;
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” Minister ” means the Minister to whom the subject or function of Finance is assigned by the President;
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” non-resident ” means not resident in Sri Lanka within the meaning of section 54 of the Inland Revenue Act, No. 4 of 1963, or section 67 of the Inland Revenue Act (No. 28 of 1979);
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” person ” includes a company or body of persons; ” precedent partner ” means the partner who, of the active partners resident in Sri Lanka-
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(a) is first named in the agreement of partnership; or
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(b) if there is no agreement, is specified by name or initials singly or with precedence to the other partners in the usual name of the partnership ; or
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(c) is first named in the statement made under section 4 of the Business Names Ordinance;
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“quarter” in relation to any year of assessment, means the period of three months commencing on the first day of October, the first day of January, the first day of April and the first day of July;
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” tourist” means any person who is not a citizen of Sri Lanka and who holds a valid passport which bears an endorsement granted to him by an authorized officer under the Immigrants and Emigrants Act;
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” trustee ” includes any trustee, guardian, curator, manager, agent or other person having the direction, control or management of any property on behalf of any person but does not include an executor;
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“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 includes-
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(a) 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.
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In this paragraph” foreign currency banking unit” means a unit or department of a commercial bank authorized by the Central Bank of Ceylon to operate as a foreign currency banking unit;
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(b) in the case of a financier, 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;
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(c) in the case of an auctioneer and, subject to the provisions of paragraph (d), in the case of a broker or a commission agent-
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(i) in respect of lands sold by him or in the sale of which he is instrumental, the commissions or fees received or receivable by him or for any transactions effected, or services rendered, by him in connection with such sale,
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(ii) in respect of any goods sold by him or in the sale of which he is instrumental, the total amount paid or payable by the purchaser of such goods;
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(d) in the case of any broker (other than a share broker or a produce broker), or commission agent, who-
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(i) on behalf of a non-resident person, sells or is instrumental in selling any goods of that non-resident person, or
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(ii) acts on behalf of an exporter of any goods manufactured in Sri Lanka, or
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(iii) on behalf of any other person carrying on a business in Sri Lanka, is instrumental in selling in Sri Lanka any goods of that other person, being goods the total proceeds of the sale of which is included in the turnover of the business of that other person, whether or not such business is a ” business” within the meaning of that expression in subsection (3) of section 120,
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the commissions or fees received or receivable by such broker or commission agent in respect of any transactions effected or services rendered by him in so selling, acting, or in being instrumental in so selling, and in the case of a share broker or a produce broker, the commissions or fees received or receivable by such broker or commission agent in respect of any transaction effected or services rendered by him ; and
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(e) 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 establishment or school, received or receivable by him in carrying on such educational establishment or school,
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but, unless otherwise expressly stated in this Part of this Act, does not include any amount received or receivable by the sale of capital assets; ‘.
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” year of assessment ” means the period of twelve months commencing on the first day of October, nineteen hundred and sixty-three or any subsequent period of twelve months commencing on the first day of October.
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(2) Where in respect of any quarter in a year of assessment business turnover tax has been paid in respect of any sum receivable during that quarter, no such tax in respect of that sum need be paid in respect of the quarter in which such sum is actually received.
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