Value Added Tax
Value Added Tax (VAT) is introduced by the Act No.14 of 2002 and is in
force from 1st August, 2002. VAT Act replaced the Goods and Services Tax
(GST) which was almost similar tax on the consumption of goods and
services.
It is a tax on domestic consumption of goods and services. The goods imported into Sri Lanka and goods and services supplied within the territorial limits of Sri Lanka are the subject mater of this tax. It is a multi stage tax levied on the incremental Value at every stage in the production and distribution chain of Goods and Services. The tax is borne by the final or the ultimate consumer of Goods or services. It is an indirect tax and the Government will receive at the end, through all the intermediary suppliers in the chain of production and distribution, an amount equal to the amount paid by the final consumer.
VAT is not charged on certain imports and on retail and wholesale supply of goods. There are certain supplies of goods and services, which is exempt from VAT.
Value Added Tax Act No 14 of 2002 
[
| |
]
[Certified on July 26, 2002]
Value Added Tax (Amendment) Act No 7 of 2003 [ | | ]
[Certified on February 27,, 2003]
Value Added Taxt (Amendment) Act No13 of 2004 [ | 
| ]
[ Certified on November 18, 2004 ]
Value Added Tax (Amendment) Act No 6 of 2005 [ | | ]
[Certified on March 30,, 2005]
Value Added Tax (Amendment) Act No 8 of 2006 [ | | ]
[Certified on March 31, 2006]
Value Added Tax (Amendment) Act No 14 of 2007 [ | | ]
[Certified on April 12, 2007]
Value Added Tax (Amendment) Act No 15 of 2008 [ | | ]
[ Certified on February 29, 2008 ]
Value Added Tax (Amendment) Act No 15 of 2009 [ | | ]
[Certified on March 31, 2009]
Consolidated Text of the Value Added Tax Act No. 14 of 2002 [ ]
Chargeability
Importers
Suppliers
Services providers
Who are liable for registration?
Every person who carries on a taxable activity
If his taxable supply exceeds or deemed to be exceed Rs. 650,000 per quarter or Rs. 2.5 Million per year.
VAT Rates
| |
Up to 31/12/2008 |
From 01/01/2009 |
| Zero Rate |
0 % |
0 % |
| Basic Rate |
5 % |
- |
| Standard Rate |
15 % |
12 % |
| Luxury Rate |
20 % |
20 % |
Registration
Firstly a TIN certificate should be applied & obtained from the Tax Payer Services Unit at 1st floor (South Wing) of the Inland Revenue Building, Chittampalam A. Gardiner Mawatha, Colombo 02.
Thereafter, VAT registration can be completed from the VAT branch at 2nd floor (South Wing) of the Inland Revenue Building, Chittampalam A. Gardiner Mawatha, Colombo 02.
Application should be made through VAT Form 11, not later than fifteen days from the date on which became liable for registration.
Documents required
for registration
TIN Certificate
Certificate of Business Registration
In case of limited liable company
Memorandum & Articles of association
List of Directors
Certificate of incorporation
Copies of NIC of the proprietors/Directors of the business
Particulars of sales to prove the turnover & monthly Bank statements to prove cash receipts.
Documents to prove that exports were made continuously by such exporters
Responsibilites of a Registered person
Display the certificate of registration at a clearly visible place in the business premises.
Issue tax invoices (to other registered persons).
keep accounts for relevant periods.
Pay taxes and furnish returns on or before due dates.
Inform the department any change in the following without delay.
Name, Business Place, Ownership, Nature of business etc..
Payments
To be paid to allocated branches of the Bank of Ceylon on or before 20th of the following month using VAT paying slip.
Returns
Monthly Tax Payers - on or before 20th of the following month.
Quarterly Tax Payers -
on or before 20th of the following month of the end of the quarter.
To be handed over to the DPRA unit, 7th floor(North Wing), Inland Revenue building, Chittampalam A. Gardiner Mawatha, Colombo 02.
Tax Payable
| VAT Payable = Output Tax - Allowable Input Tax |
Output Tax
The tax chargeable in respect of the supply of Goods or Services made or deemed to have been made by a registered person under the VAt Act.
Input Tax
In case of a registered
person under this Act, the tax paid on Goods and Services purchased or imported by the person to be used in his business.
Guide to VAT
Synopsis
of the VAT law-2003
More Details
VAT Unit - 011 2331845, 011 2302536
Tax Payer Service Unit - 011 3009011, 011 3009048
Secretariat Unit - 011 3009246, 011 3009262
