Turnover Tax

(a) carries on any business in Sri Lanka; or

(b) renders services outside Sri Lanka for which payment is made from Sri Lanka,

a tax (hereinafter referred to as the” turnover tax”) in respect of the turnover made by that person from that business or from services rendered outside Sri Lanka computed at such rate as the Minister may fix by Order published in the Gazette.

For the purpose of this Act the expression” business” shall include services rendered outside Sri Lanka for which payment is made from Sri Lanka.

(1) A person shall, in respect of any business carried on by him in Sri Lanka, be chargeable with turnover tax for each quarter if the turnover of that business for that quarter is not less than twenty-five thousand rupees and where that business is carried on by him for only a part of any quarter, the turnover of that business for that part of the quarter is not less than the 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.

(2) Where a person is chargeable with 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 turnover tax as though he had been the owner of that business immediately before the occurrence of the change of ownership.

(1) The Minister may, if he is of opinion that it is essential for the economic progress of Sri Lanka, exempt by Order published in the Gazette any business or such business as may be specified, which is carried an by any person, from the turnover tax.

(2) Every Order under subsection (1) shall come into farce on the date of its publication in the Gazette or on such later date as may be specified in such 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.

(3) Any Order 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 such Order until the date of such refusal, and the notification of the date on which such Order is deemed to be revoked shall be published in the Gazette.

(1) For the purposes of this Act” 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

(2) For the purposes of subsection (1) the turnover shall not include any amount received or receivable by the sale of capital assets.

(3) Where in respect of any quarter, 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.

(1) 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 be deemed to be one business.

(2) Different businesses carried on by the same person in one place shall be deemed to be one business.

(1) The rate of 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 and published in the Gazette.

(2) The rate of 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.

(3) Every determination under subsection (1) and every Order made under 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 such determination or Order and shall be brought before Parliament within a period of three months from the date of the publication of such determination or 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 determination or Order shall be approved. There shall be set out in a schedule to every such motion the text of the determination or Order to which the motion refers.

(4) Any determination under subsection (1) or any Order under subsection (2) which Parliament refuse 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 there under. Notification of the date on which any such determination or Order is deemed to be revoked shall be published in the Gazette.

(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.

(2) Where an article is, under subsection (1), declared to be an excepted article in respect of any class or description of business, no turnover tax shall be payable in respect of the sum realized by the sale of such article or in respect of the import of such article.

(1) Every person who carries on any business in Sri Lanka shall, where the turnover of that business for any quarter is not less than twenty-five thousand rupees and where that business is carried on by him for only a part of any quarter, the turnover of that business for that part of the quarter is not less than the 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, furnish to the Commissioner-General not later than fifteen days after the expiry of that quarter or part of the quarter, as the case may be, a return setting out the turnover of that business for that quarter or part of the 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.

(2) An Assessor may, by notice in writing, direct any person who, in the judgment of that Assessor, is a person chargeable with turnover tax to furnish within the time specified in such notice a return containing such particulars as the Assessor may require,

(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

(4) For the purposes of this Act, a Deputy Commissioner may give notice in writing to any person requiring him

(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.

(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 far the purposes of this Act any banks, accounts, trade lists, stock lists, registers, vouchers, 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 came or have come into his possession.

(7) An Assessor may give notice in writing to any person when and as after as he thinks necessary requiring him to furnish within the time specified in such notice

(8) A return, statement or farm purporting to be furnished under this Act by or an behalf of any person shall far 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 farm shall be deemed to be cognizant of all matters contained therein,

(1) Where any turnover tax is in default, the defaulter shall, in addition to such tax in default, pay as a penalty

Provided, however, that the total amount payable as penalty under this subsection shall in no case exceed fifty 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

(2) Where upon the final determination of an appeal under section 17 any tax in default to which any sum or sums under subsection (1) has or have been added is reduced then such sum or sums shall be calculated on the tax as so reduced.

(1) Notwithstanding anything in this Act, there shall be charged from every person who imports any article manufactured outside Sri Lanka turnover tax in respect of his turnover, whether the turnover for any quarter is less than the amount specified in section 3 or not, at the rates specified in an Order made by the Minister under section 7 and collected by the Principal Collector of Customs, which tax shall be in addition to any other tax, duty or levy imposed under the Customs Ordinance.

(2) The turnover tax referred to in subsection (1) shall, for the purposes of the levy and collection of such tax, be deemed to be customs duty leviable under the Customs Ordinance and accordingly the provisions of the Customs Ordinance shall apply to the levy, collection and recovery of such tax, granting exemption from or drawback of such tax and settling any appeals or any other matter in relation to such tax.

(3) Where an article manufactured outside Sri Lanka and imported into Sri Lanka is sold

(1) Where any person

the Assessor shall assess the amount of the 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 that 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 14, be deemed to be the amount of the turnover tax payable by him for that quarter:

Provided that the Assessor may assess any person for any quarter at any time prior to the fifteenth day after the end of such quarter, if he is of the opinion that such person is about to leave Sri Lanka or that it is expedient to do so for the protection of revenue and require such person to pay such tax to the Commissioner-General earlier than as required under section 10. Any tax not so paid shall be deemed to be in default for that quarter.

(2) An assessment made under subsection (1) in respect of any person for any quarter shall not affect the liability of such person to a penalty under section 11 as though the amount assessed were the amount of turnover tax due from him for that quarter.

(3) Where, in the opinion of the Assessor, the amount paid as turnover tax for any quarter by any person who has failed to furnish under section 9, 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 specified in that notice, the difference between the amount so assessed and the amount paid by that person.

(4) Where an assessment is made under subsection (3) in respect of any person for any quarter, the difference between the amount so assessed and the amount paid by that person as turnover tax for that quarter shall be deemed to be the turnover tax in default for that quarter and accordingly such person shall, from the date on which such person ought to have paid the tax for that quarter under section 10, be liable in respect of that amount to the penalty under subsection (1) of section 11.

(1) Where it appears to an Assessor that a person chargeable with turnover tax has for any quarter 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.

(2) Where an assessment is made under subsection (1) in respect of any person for any quarter, the amount so assessed shall be deemed to be turnover tax in default for that quarter and accordingly such person shall, from the date on which such person ought to have paid the tax for that quarter under section 10, be liable to the penalty under subsection (1) of section 11 in respect of such amount.

(1) Any person may, if he is dissatisfied with any assessment or additional assessment made in respect of him by an Assessor, Or a penalty imposed under this Act, appeal against such assessment or additional assessment or penalty to the Commissioner-General within thirty days after the service of notice of such assessment, additional assessment or imposition of penalty.

Such person shall, notwithstanding the appeal, pay the 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.

(2) Every appeal shall be preferred by a petition in writing addressed to the Commissioner-General and shall state precisely the grounds of such appeal.

(3) 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 duly made.

(4) Every petition of appeal which does not confirm to the provisions of subsections (2) and (3) shall not be valid.

(5) On receipt of a valid petition of appeal, 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, the necessary adjustment of the assessment shall be made.

(6) Where no agreement is reached between the appellant and the Assessor in the manner provided in subsection (5) the Commissioner-General shall fix a time and place for the hearing of the appeal.

(7) Every appellant shall attend before the Commissioner General at the time and place fixed for the hearing of the appeal. The appellant may attend the hearing of the appeal in person or by an authorized representative. The Commissioner-General may, if he thinks fit, from time to time adjourn the hearing of an appeal for such time and place as he may fix for the purpose. In any case in which an authorized representative attends on behalf of the appellant, the Commissioner-General may adjourn the hearing of the appeal and may, if he considers that the personal attendance of the appellant is necessary for the determination of the appeal, require that the appellant shall attend in person at the time and place fixed for the adjourned hearing of the appeal.

If the appellant or his authorized representative fails to attend at the time and place fixed for the hearing or any adjourned hearing of the appeal, or if the appellant fails to attend in person when required so to attend by the Commissioner-General, the Commissioner-General may dismiss the appeal:

Provided that, if the appellant shall within a reasonable time after the dismissal of an appeal satisfy the Commissioner-General that he or his authorized representative was prevented from due attendance at the hearing or at any adjourned hearing of such appeal by reason of absence from Sri Lanka, sickness, or other unavoidable cause, the Commissioner-General may vacate the order of dismissal and fix a time and place for the hearing of the appeal.

(8) The Commissioner-General shall have power to summon any person whom he may consider able to give evidence respecting the appeal to attend before him and may examine such person on oath or otherwise. Any person so attending may be allowed by the Commissioner-General any reasonable expenses necessarily incurred by such person in so attending.

(9) Before making his determination on any appeal, the Commissioner-General may, if he considers it necessary so to do, by notice given in writing to any person require that person to produce for examination, or to transmit to the commissioner-General within the period specified in such notice, any such deeds, plans, instruments, books, accounts. trade lists, stock lists, registers, cheques, paying-in-slips, auditor’s reports or other documents in his possession as may be specified in such notice.

(10) Where the Commissioner-General hears the evidence of the appellant or of any other person in respect of the appeal, he shall maintain or cause to be maintained a record of such evidence.

(11) In determining an appeal under this section the Commissioner-General may confirm, reduce, increase or annul the assessment appealed against and shall give notice in writing to the appellant of his determination on the appeal.

(1) The decision of the Board of Review shall be final:

Provided that either the appellant or the Commissioner General may make an application requiring the Board of Review to state a case on a question of law for the opinion of the Court of Appeal.

(2) The provisions of the Inland Revenue Act, No. 28 of 1979, relating to appeals to the Court of Appeal and to the Supreme Court shall, mutatis mutandis, apply to an appeal under this section.

(1) The secretary, manager, director or other principal officer of every company or body of persons, corporate or unincorporated, shall be liable to do all such acts, matters or things as are required to be done under the provisions of this Act by such company or body of persons.

Provided that any person to whom a notice has been given under the provisions of this Act on behalf of a company or body of persons shall be deemed to be the principal officer thereof unless he proves that he has no connection with that company or body of persons or that some other person resident in Sri Lanka is. the principal officer thereof.

(2) Where an offence under this Act is committed by a company or body of persons, corporate or unincorporated, every person who at the time of the commission of the offence was the secretary, manager, director or other principal officer of the company or body of persons shall be deemed to be guilty of that offence unless he proves that the offence was committed without his knowledge and that he exercised all such diligence to prevent the commission of that offence as he ought to have exercised having regard to the nature of his functions in such capacity and to all the other circumstances.

(1) Subject as hereinafter provided, where during the course of a quarter, a person chargeable with turnover tax ceases to carry on any business in respect of which he is chargeable with such tax, he shall, notwithstanding that he has ceased to carry on such business, be liable to pay such tax for the period during which he carried on that business. in that quarter.

(2) Where any person carrying on a business transfers such business to any other person, any turnover tax payable in respect of such business for any period prior to the transfer may, if it cannot be recovered from the transferor, be recovered from the transferee notwithstanding that an assessment may not have been made on the transferee and’ the provisions of this Act as to collection and recovery of turnover tax shall apply accordingly.

(1) Where any person chargeable with turnover tax dies, the executor of Such deceased person shall, in respect of all periods prior to the date of death of such person, be chargeable with turnover tax which such person would be chargeable if he were alive, and shall be liable to do all acts, matters and things which such person if he were alive would be liable to do under this. Act:

Provided that:-

(2) Where an executor on behalf of the estate of a deceased person carries on any business. which is a part of such estate, such executor shall, in respect of such business, be chargeable with turnover tax with which such person would be chargeable if he were alive.

(1) Notwithstanding anything in the Companies Ordinance, where a company is wound up and where any 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 turnover tax shall apply accordingly.

(2) Where a body of person is dissolved and where any 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 turnover tax shall apply accordingly.

(1) For the purposes of section 31, section 32, section 83, section 34, section 35, section 36, section 37 and section 38 “turnover tax” includes any penalty imposed or incurred under this Act.

(2) Whenever the Commissioner-General issues a certificate under section 33 or section 34 or a notice under section 35, 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.

(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 33 ;

(ii) as regards immovable property, the 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

(iii) as regards movable property, where turnover tax for more than four quarters is in default, the tax for four quarters 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.

(1) Where any turnover tax is in default, the Commissioner-General shall, before proceeding to recover such tax, issue notice in writing to the defaulter stating

(2) If such defaulter has not appealed within the proper time against the assessment in respect of which such tax is charged, he may within thirty days of the date of such notice make any objection to the tax so charged, to the Commissioner-General and the Commissioner-General shall, notwithstanding the provisions of section 20, consider such objections and give his decision thereon which shall subject to subsection (3) be final.

(3) Where such defaulter has failed to make the objection referred to in subsection (2) to the Commissioner-General, he may make an objection to the tax charged to the Commissioner-General within a period of thirty days from the date of the certificate issued under section 33 or section 34 or a notice issued under section 35.

(1) The Commissioner-General may appoint persons to be tax collectors for the purposes of this Act.

(2)

(3) It shall be lawful for a tax collector to recover from any defaulter reasonable expenses incurred by him in proceeding against the defaulter under this section notwithstanding that the seizure was not effected. Where cash is: seized such reasonable expenses shall be set off first from the amount so seized.

(4) Where any turnover tax is in default, and the Commissioner-General i 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 to 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.

For the purposes of this section “movable property ” shall include plant and machinery.

(1) Where the Commissioner-General is of opinion in any case that recovery of 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, No. 15 of 1979, 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:

Provided that nothing in this section shall authorize or require the Magistrate in any proceeding there under to consider, examine or decide the correctness of any statement in the certificate of the Commissioner-General.

(2) Nothing in subsections (2) to (5) of section 291 of the Code of Criminal Procedure Act, No. 15 of 1979, shall apply in any case referred to in subsection (1) of this section.

(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.

(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, No. 15 of 1979, shall apply where the defaulter is so required to give bail.

(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.

(1) Where the turnover tax payable by any person is in default and it appears to the Commissioner-General to be probable that any person

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. The notice shall apply to all such moneys which are in his hands or due from 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.

(2) Any person who has made any payment in pursuance of this section shall be deemed to have acted under the authority of the defaulter 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.

(3) Where any person to whom a notice has been given under subsection (1) is unable to comply therewith owing to the fact that 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 too the Commissioner-General apprising him of the facts.

(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 required by the Commissioner-General the amount of such tax or part thereof within fourteen days after the expiration of the period referred to in sup section (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 un-incorporate, 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, as the case may be, by all means provided in this Act.

(5) For the purposes of this section, the expression ” defaulter” shall be deemed to include the agent of a person who is in default and the provisions of this section shall apply in any ca e where the tax which would have been payable by any person if he were alive is in default ; and for the purpose of the application of those provisions in any such case, the expression” defaulter” in sub section (1) means

(1) Where the Commissioner-General is of opinion that any person is about to or likely to leave Sri Lanka without paying the turnover tax assessed upon him, the Commissioner-General may issue a certificate containing particulars of such tax and the name of such person to 3 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.

(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, or 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.

(3) The production of a certificate signed by the Commissioner-General or a Deputy Commissioner stating that the tax has been paid or that security has been furnished to the payment of the tax or 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.

(4) Any police officer to whom the amount of any tax has been paid shall forthwith pay such amount to the Commissioner-General.

(1) The Commissioner-General may, by writing under his hand, delegate to any Assessor any of the powers or functions conferred on or assigned to the Commissioner-General by this Chapter.

(2) Every Assessor to whom any power or function has been delegated under subsection (1) shall exercise or discharge that power or function subject to the general or special directions of the Commissioner-General.

(1) Every notice to be given by the Commissioner- General, a Deputy Commissioner or an Asses or 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.

(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 13 or section 14 shall be served personally or by being sent by post by registered letter to any such place as aforesaid.

(3) Any notice sent by post shall be deemed to have been served on the day on which it could have been received in the ordinary course of post.

(4) In proving service by post it shall be sufficient to prove that the letter containing to be notice was duly addressed and posted.

(5) Every name printed or signed on any notice or signed on any certificate given or issued for the purposes of this Act, which purposes to be the name of the person authorized to give or issue the same, shall be judicially noticed.

(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.

(2) Without prejudice to the generality of subsection (I), an assessment shall not be affected or impugned-

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.

(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:

and the provisions of the Code of Criminal Procedure Act, No. 15 of 1979, 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, No. 15 of 1979.

(2) Before authorizing any officer to exercise the powers under subsection (1), the Commissioner-General shall record the circumstances which necessitate the exercise of those powers; by that officer.

(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.

(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.

(1) The Commissioner-General or any other officer. If the Department of Inland Revenue what is specially authorized in that behalf by the Commissioner-General in writing may do all or any If the following acts:

(2) Where an office!’ authorized by the Commissioner General under subsection (J), takes into his possession 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 document he has taken into his possession.

(3) Any book of account, register, record or other document taken into his possession under subsection (1) by any Officer may be retained in the possession of such officer as long as may be necessary far the scrutiny of such book, register, record or document or for the institution of legal proceedings against the person to whom such book, register, record or other document belongs.

(a) the date on which such transaction was entered into;

(b) the nature of such transaction;

(c) the amount of money received or receivable in respect of such transaction; and

(d) the name and address of the person with whom such transaction was entered into.

(1) Every person chargeable with turnover tax shall, in respect, of transactions entered into by him in carrying on his business, keep and maintain in respect of each quarter a register of transactions.

(2) The register of transactions kept by any person in respect of any quarter shall be retained and preserved by him for a period of five years after the expiry of that quarter.

(1) Every manufacturer chargeable with turnover tax shall, register himself with the Commissioner-General who shall assign him a registration number:

Provided, however, that no such registration shall be necessary in the case of, a person who brings into Sri Lanka any article manufactured outside Sri Lanka, other than in the course of a business.

(2) Every manufacturer registered under subsection (1) (hereafter in this Chapter referred to as a “registered manufacturer “) shall in respect of each transaction entered into by him in carrying on his business in relation to which such tax is payable prepare or cause to be prepared a voucher setting out

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 quarter in which such voucher was prepared.

(a) no deduction shall be made for tax in respect of any plant, machinery, fixtures, buildings, vehicles or other capital assets used in that business;

(b) no deduction shall be made for turnover tax in respect of articles used in any business which is exempt from turnover tax under section 4 or in the manufacture of excepted articles;

(c) no deduction shall be made unless he has obtained from the manufacturer from whom such articles were purchased by him a voucher as required by subsection (2) of section 46;

(d) any turnover tax included in any sum paid prior to the date of registration as a registered manufacturer shall be allowed as a deduction from the tax payable for the quarter in which such registered manufacturer becomes chargeable to turnover tax;

(e) any excess of such deduction over the tax payable for the quarter shall not be refunded but deducted from the tax payable for the subsequent quarter and so on:

(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 that any person has paid 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:

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:

Provided further that, no refund shall be made if such tax paid in excess has been deducted under section 47 or section 48 or has been included in any amount recovered from another person.

(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 (1) of section 11 which is in excess of the sum which he should. have paid if such sum were calculated in accordance with I the provisions of subsection (2) 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 quarter in which the sum referred to in the aforesaid subsection (1) was paid.

(3) Subject to the provisions of subsection (6), 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–

such amount of the 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.

(4) Subject to the provisions of subsection (5) where the exporter is himself the manufacturer or producer of any article manufactured or produced in Sri Lanka and the Commissioner-General is Satisfied.

such amount of the turnover tax as is attributable to the raw materials used in the manufacture or production of such. article shall be paid to such exporter by the Commissioner-General.

(5) The provisions of subsections (3) and (4) shall apply in relation to any container, receptacle or wrapper in which an article referred to in those subsections is exported in the same manner as if all reference to ” article” in those provisions were references to such container, receptacle or wrapper, as the case may be.

(6) No payment under subsection (3) or subsection (4) 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.

(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 Act, deduct from such payment 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 turnover tax, if any, payable by him under this Act:

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.

(2) Any person who deducts turnover tax “in accordance with the provisions of subsection (1) shall

(3) Where the turnover of a person includes a sum from which -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) to a set off against the tax payable by him of the amount shown on such statement as the amount of tax deducted.

(4) For the purposes of this section-

(5) Any person who fails to deduct turnover tax in terms of subsection (1) or fails to remit under subsection (2) any turnover tax to the Commissioner-General shall be deemed to be in default and the provisions of this Act relating to recovery of turnover tax shall accordingly apply to any such default.

(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 turnover 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.

(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).

(a) who being a person required to take an oath of secrecy under section 57, acts under this Act without taking such oath; or

(b) who acts in contravention of the provisions of section 57 ; or

(c) who aids, abets or incites any other person to act in contravention of any of the provisions of this Act, shall he guilty of’ an offence under this Act, and

shall be liable, on conviction after summary trial before a Magistrate, to a fine not exceeding two thousand rupees, or to imprisonment of either description for a term not exceeding six months or to both such fine and imprisonment.

(a) gives any false answer whether verbally or in writing to any question or r quest for information asked or made in accordance with the provisions of this Act; or

(b) omits from a return made or furnished under this Act any particulars which he should have included in such return ;

(c) makes any false return or false entry in any return made under this Act, and thereby evades or attempts to evade turnover tax or assists any other person to evade or attempt to evade such tax shall be guilty of an offence under this Act, and shall be liable on conviction after summary trial before a Magistrate to a fine consisting of

(a) fails to comply with the provisions of section 9 or section 44 or section 45 or subsections (1) and (2) of section 46 or subsection (1) of section 50 ; or

(b) fails to comply with the requirements of a notice issued to him under section 9 or section 17; or

(c) having appeared before an officer of the Department of Inland Revenue in compliance with a notice issued to him under section 9 or section 17 fail without sufficient cause to answer any question lawfully put to him by such officer; or

(d) gives any incorrect information relating to any matter or thing affecting his own liability to turnover tax or the liability of any other person; or .

(e) willfully obstructs or delays the Commissioner General or any other officer in the exercise of his powers under section 42 or section 43 ; or

(f) 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 five thousand rupees or to imprisonment of either description for a term not exceeding six months or to both such fine and imprisonment.

(1) Subject to the provisions of Charter VII, the Commissioner-General of Inland Revenue shall be in charge of the administration-of this Act.

(2) A Commissioner or Deputy Commissioner exercising or performing or discharging any power, duty or function of the Commissioner-General under this Act shall be deemed for all purposes to be authorized to exercise, perform or discharge that power, duty or function until the contrary is proved.

(3) A Commissioner or a Deputy Commissioner may exercise any power conferred on an Assessor by this Act.

(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 in carrying 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 of Finance nor suffer or permit any person to have access to any records in the possession, custody or control of the Commissioner-General.

(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 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.

(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.

(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 written law and the Commissioner-General 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:

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 are the signature or 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 return or copy of any particulars contained in such document return.

(5) Notwithstanding anything contained in this section, the Commissioner-General may permit the Auditor General any officer of the Department of the Auditor General duly authorized by him in that behalf to have such access to any records documents as may be necessary far 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 far the purpose of subsection (2).

(1) In this Act, unless the context otherwise requires

“agent” includes any person having the direction, central 0.1′ management of any business on behalf of any other person;

” article” includes any goods, material or any agricultural or horticultural produce;

” Assessor” means an Assessor of Inland Revenue appointed for the purposes of the Inland Revenue Act, No. 28 of 1979 ;

” authorized representative” means any individual

“body of persons” means any body corporate or unincorporate, local authority, any fraternity, fellowship, association or society of persons, whether corporate or unincorporate, any partnership and any Hindu undivided family and includes any Government department or any undertaking of the Government of Sri Lanka.

” business” includes any trade, profession, vocation, or agricultural undertaking, the racing of horses or the letting of commercial premises by a company or the business of a manufacturer 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 or every adventure and concern in the nature of trade;

” Commissioner” means a Commissioner of Inland Revenue appointed for the purposes of the Inland Revenue Act, No. 28 of 1979 ;

” Commissioner-General” means the Commissioner General of Inland Revenue appointed under the Inland Revenue Act, No. 28 of 1979, and includes a Commissioner, and a Deputy Commissioner specially authorized by the Commissioner-General either generally or for some specific purpose to act on behalf of the Commissioner-General;

” company” means any company incorporated or registered under any law in force in Sri Lanka or elsewhere;

” Deputy Commissioner” means a Deputy Commissioner of Inland Revenue appointed for the purposes of the Inland Revenue Act, No. 28 of 1979 ;

“excepted article” means any article declared to be an excepted article under section 8 ;

” executor” means an executor or administrator of a deceased person and includes

“incapacitated person” means any minor, lunatic, idiot or person of unsound mind;

“local authority” means any Municipal Council, Urban Council, Town Council or Village Council and includes any Authority established by or under any law to exercise, perform and discharge powers, duties and functions, corresponding to or similar to the powers, duties and functions, exercised, performed and discharged by any such Council ;

” manufacturer” means any person who

” person” includes a company or body of persons;

“precedent partner” means the partner who, of the active partners resident in Sri Lanka

” quarter” means the period of three months commencing on the first day of January, the first day of April, the first day of July and the first day of October of each year

“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.