ACT, No. 17 OF 2013

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PARLIAMENT OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
VALUE ADDED TAX (AMENDMENT)
ACT, No. 17 OF 2013
[Certified on 24th April, 2013]
Printed on the Order of Government
Published as a Supplement to Part II of the Gazette of the Democratic
Socialist Republic of Sri Lanka of April 26, 2013
PRINTEDATTHE DEPARTMENTOFGOVERNMENTPRINTING,SRILANKA
TO BEPURCHASED AT THE GOVERNMENT PUBLICATIONS BUREAU, COLOMBO 5
Price : Rs. 17.00 Postage : Rs. 15.00

Value Added Tax (Amendment) 1
Act, No. 17 of 2013
[Certified on 24th April, 2013]
L.D.—O. 2/2013.
AN ACT TO AMEND THE VALUE ADDED TAX
ACT, NO. 14 OF 2002
BE it enacted by the Parliament of the Democratic Socialist
Republic of Sri Lanka as follows:—
1. This Act may be cited as the Value Added Tax Short Title
(Amendment) Act, No. 17 of 2013 and shall be deemed to and date of
have come into operation on January 1, 2013 unless different operation.
dates of operation are specified therefor, in the relevant
sections.
2. Section 2 of the Value Added Tax Act, No. 14 of 2002 Amendment
(hereinafter referred to as the “ principal enactment” ) as last of section 2
amended by the Value Added Tax (Amendment) Act, No.7 of of the Value
Added Tax
2012 is hereby further amended as follows:— Act, No. 14 of
2002.
(1) in paragraph (a) of the first proviso to subsection (1)
of that section, by the substitution for the words “any
garments” of the words “any garments or fabric”;
(2) in subsection (2) of that section:-
(a) by the substitution for the words “shall be
administrated by the Commissioner-General” in
the proviso to paragraph (c) thereof, of the words
“shall be administrated by the Commissioner-
General as stipulated in paragraph (e) of this
subsection;
(b) by the substitution for the words “shall be
administrated by the Commissioner-General” in
the proviso to paragraph (d) thereof, of the words
“shall be administrated by the Commissioner-
General as stipulated in paragraph (e) of this
subsection;
2—PL 007069—4,090 (03/2013)
2 Value Added Tax (Amendment)
Act, No. 17 of 2013
(c) by the repeal of paragraph (e) of subsection (2)
and the substitution therefor of the following :—
“(e) on the supply of goods or services by any
registered person, who is registered in the
Simplified Value Added Tax Scheme
administrated by the Commissioner-General
to –
(i) any exporter or provider of zero rated
services specified in terms of
section7;
(ii) any registered person who supplies
goods or services to any Strategic
Development Project in terms of
subsection (4) of section 3 of the
Strategic Development Projects Act,
No. 14 of 2008, as is referred to in
sub-paragraph (i) of paragraph (f) of
Part II of the First Schedule, during
the project implementation period so
far as such supplies are project related
supplies;
(iii) any registered person engaged in
any specific project referred to in sub-
paragraph (ii) of paragraph (f) of
PART II of the First Schedule
(effective from April 1, 2011);
(iv) any manufacturer who supplies
goods manufactured in Sri Lanka to
any exporter;
(v) any supplier who provides value
added services to an exporter which
results in the improvement of the
quality, character or value of any
goods manufactured for export;
(vi) any person registered under the
provisions of subsection (7) of
section 22 of the Act, during the
Value Added Tax (Amendment) 3
Act, No. 17 of 2013
project implementation period so far
as such supplies are project related
supplies;
(vii) any registered person who supplies
any goods or services, to any
registered person referred to in sub-
paragraph (i), (ii), (iii), (iv), (v) or (vi)
above, provided that, the
Commissioner-General is, on the
information available, is satisfied that
the value of such supplies exceeds
fifty per-centum of the total supplies
of such registered person who
supplies such goods or services,
until such time as the activities of such
registered person is carried out to the
satisfaction of the Commissioner-General
in the manner stipulated by the
Commissioner-General in the guidelines
issued for such purpose and which are
specified in the Order published in the
Gazette.
(3) in subsection (3) of that section:—
(a) the first proviso to that subsection is amended
as follows:-
(i) in paragraph (a), by the substitution for
the words “customs bonded area;” of the
words and figures “customs bonded area
or a free port referred to in PART IV of the
Finance Act, No. 12 of 2012;”;
(ii) in paragraph (f), by the substitution for the
words and figures “who has registered with
the Textile Quota Board established under
the Textile Quota Board Act, No.33 of 1996,
with the approval of the Textile Quota Board
4 Value Added Tax (Amendment)
Act, No. 17 of 2013
or the Board of Investment, as the case may
be.” of the words and figures “who has
registered with the Simplified Value Added
Scheme administrated by the
Commissioner-General with the approval of
the Commissioner -General.”;
(b) the second proviso to that subsection is amended
as follows:—
(i) by the repeal of item (vi) of paragraph (a)
and the substitution therefor of the
following:—
“(vi) any goods imported, including any
goods received from customs
bonded area by a person registered
with the Simplified Value Added
Scheme administrated by the
Commissioner-General who imports
or receives such goods for the
manufacture of goods or the
provision of services to a
manufacturer of goods for export
referred to in item (i) of paragraph (e)
of subsection (2) of section 2”;
(ii) by the repeal of item (vii) of paragraph (a)
and the substitution therefor of the
following:-
“(vii) any plant or machinery imported,
including any plant or machinery
received from a customs bonded area
by a person registered with the
Simplified Value Added Tax Scheme
administrated by the Commissioner-
General who imports or receives such
plant or machinery for the usage by
such person for the manufacture of
goods or provision of services
referred to in item (i) of paragraph (e)
of subsection (2) of section 2, for the
manufacture of goods to be
exported”;
Value Added Tax (Amendment) 5
Act, No. 17 of 2013
(iii) by the repeal of subparagraph (viii) and (ix)
of paragraph (a);
(iv) in the end of that proviso, by the
substitution for the words commencing
from “The deferment of the payment of tax”
to the end of that paragraph of the
following:—
“The deferment of the payment of tax
shall be subject to a furnishing of :—
(a) a bank guarantee in a case where the
tax deferred is less than rupees ten
thousand; or
(b) a Treasury Bill as a guarantee in a
case where the tax deferred is not less
than rupees ten thousand ; or
(c) a corporate guarantee which covers
the amount of tax due subject to the
conditions specified in the agreement
in which the deferment is considered,
on the goods imported, received or
purchased:
Provided that, in the case of such
deferment under paragraph (b) no guarantee
shall be required where such goods have
been imported by a Government institution
to be re-exported within one month from
the date of importation.”.
3. Section 3 of the principal enactment as last amended by Amendment of
the Value Added Tax (Amendment) Act, No.8 of 2006 is hereby section 3 of the
principal
further amended as follows:-
enactment.
(1) in paragraph (e) of that section by the substitution for
the words “under any tender agreement,” of the
following:-
“under any tender agreement;
6 Value Added Tax (Amendment)
Act, No. 17 of 2013
(f) any person or a partnership having a total
supplies for any three months period in any
calendar year not less than rupees five hundred
million including the supplies under preceding
paragraphs of this section and any supplies
excluded under section 2 or exempted under PART
II of the First Schedule,”;
(2) by the repeal of the proviso to that section and the
substitution therefor of the following:-
“Provided that, such tax shall be charged on such
wholesale or retail supply of goods made prior to
January 1, 2013, if –
(i) any registered person makes an application to
that effect to the Commissioner-General;
(ii) any other person makes an appeal to that effect
to the Commissioner-General,
and obtains a registration as provided for in section10
or section 12.”;
(3) by the addition immediately at the end of that proviso
of the following new proviso:—
“Provided further, the chargeability to tax referred
to any registered person specified in paragraph (f)
shall be other than the supplies exempted from tax as
specified in PART II of the First Schedule to the Act.”.
Amendment of 4. Section 5 of the principal enactment as last amended by
section 5 of the the Value Added Tax (Amendment) Act, No.14 of 2007 is
principal hereby further amended in subparagraph (12) thereof by the
enactment. substitution for the words “a separate supply by such
Assessor:” of the following –
“a separate supply by such Assessor;
(13) Notwithstanding the provisions of Consumer
Affairs Authority Act, No.9 of 2003, the maximum
retail price quoted for the goods to be sold in a
wholesale or retail business may be adjusted
where necessary for the chargeability to tax where
liability to tax is specified in paragraph (f) of
section 3 of this Act:”.
Value Added Tax (Amendment) 7
Act, No. 17 of 2013
5. Section 10 of the principal enactment as last amended Amendment of
by the Value Added Tax (Amendment) Act, No.15 of 2009 is section 10 of the
principal
hereby further amended as follows:—
enactment.
(1) in item (ii) of subsection (1) of that section, by the
substitution for the words and figures “on or after
January 1, 2009 carries on or carries out” of the words
and figures “on or after January 1, 2009, but prior to
January 1, 2013 carries on or carries out”;
(2) immediately after paragraph (c) of item (ii) of subsection
(1) of that section , by the insertion of the following
new item :—
“(iii) on or after January 1,2013 carries on or carries
out any taxable activity in Sri Lanka shall be
required to be registered under this Act, if –
(a) at the end of any taxable period of one
month or three months, as the case may
be, the total value of the taxable supplies
of goods or services or goods and services
of such person, made in Sri Lanka in that
taxable period of one month or three
months, as the case may be, has three
million rupees ; or
(b) in the twelve months period then ending,
the total value of the taxable supplies of
goods or services or goods and services
of such person, made in Sri Lanka has
exceeded twelve million rupees; or
(c) at any time, there are reasonable grounds
to believe that the total value of the taxable
supplies of goods or services or goods
and services of such person in Sri Lanka,
in the succeeding one month or three
months taxable period, as the case may be,
is likely to exceed three million rupees or in
the succeeding twelve months period is
likely to exceed twelve million rupees: ”.
8 Value Added Tax (Amendment)
Act, No. 17 of 2013
(3) In subsection (2) of that section, by the substitution
for the words and figures “shall not include the
supplies of any wholesale or retail trading activity
excluded from the payment of tax under section 3.” of
the words and figures “shall not include the value of
supply of goods purchased locally without any
process in a wholesale or retail trading activity unless
the value of total supplies for a period of three months
in one calendar year including the supplies excluded
under section 2 or exempted under PART II of the
First Schedule to the Act, is not less than rupees five
hundred million.”.
Amendment of 6. Section 11 of the principal enactment as last amended
section 11 of the by the Value Added Tax (Amendment) Act, No.7 of 2003 is
principal
enactment. hereby further amended in the proviso to subsection (1)
thereof, by the substitution for the words “shall not be liable
to notify the Commissioner-General.” of the following:-
“shall not be liable to notify the Commissioner-General:
Provided further, with effect from January 1, 2013, any
person registered under section 12, subsection (2) of section
80 or subsection (1) of section 75, as the case may be, of the
Goods and Services Tax Act, No. 34 of 1996 shall be deemed
to have obtained an identification number for the clearing of
goods where such registered person fulfils the criteria
specified in item (iii) of subsection (1) of section 10 or a
registered person during the project implementation period
as specified in subsection (7) of section 22 of this Act.”.
Amendment of 7. Section 12 of the principal enactment is hereby amended
section 12 of the by the substitution for the words “may make an application in
principal
enactment. the specified form to the Commissioner-General for registration
under this Act:” of the words and figures “may make an
application for any taxable period prior to January 1, 2013, in
the specified form to the Commissioner-General for registration
under this Act:”.

Value Added Tax (Amendment) 9
Act, No. 17 of 2013
8. Section 14 of the principal enactment as last amended Amendment of
by the Value Added Tax (Amendment) Act, No.7 of 2003 is section 14 of the
principal
hereby further amended by the repeal of subsection (2) thereof
enactment.
and the substitution therefor of the following:-
“(2) Any person –
(a) registered under subsection (1) of this section;or
(b) deemed to be registered under section 75 or
subsection (2) of section 80 of the Goods and
Services Tax Act, No.34 of 1996 on August 1, 2002
and carrying on or carrying out a taxable activity
subject to the conditions specified in section 3
for the registration of wholesale and retail trade
or fulfilling the requirements specified in item (iii)
of subsection (1) of section 10 of this Act,
shall be a registered person for the purposes of this
Act.”.
9. Section 16 of the principal enactment as last amended Amendment of
by the Value Added Tax (Amendment) Act, No.9 of 2011 is section 16
of the
hereby further amended as follows:-
principal
enactment.
(1) in subsection (1) of that section, by the substitution
for the words and figures “does not exceed the value
set out in section 10.” of the following:-
“does not exceed the value set out in section 10:
Provided that, any registered person who had
had a total value of taxable supplies not exceeding
rupees three million for a period of three months
and rupees twelve million for a period of twelve
months in the year ending as at December 31,
2012, shall request for the cancellation of his
registration with effect from January 1, 2013, unless
such registered person has reasons to believe
that the taxable supplies of such registered person
is likely to exceed the value of supplies specified
in sub-paragraph (iii) of paragraph (c) of
subsection (1) of section 10.”;
10 Value Added Tax (Amendment)
Act, No. 17 of 2013
(2) in subsection (5) of that section, by the substitution
for the words and figures, “by another person who is
a registered person.” of the following:-
“by another person who is a registered person:
Provided that, in the case of a registered person
whose registration is cancelled as specified in the
proviso to subsection (1) –
(a) where the assets (other than stock in trade)
are not transferred to another registered
person at the time immediately prior to the
date of cancellation, the Commissioner-
General shall taking into consideration the
value of the acquisition of the assets and
the period of use of such assets based on
the rates of depreciation applied for income
tax purposes on such assets and other
matters as may be relevant, determine the
value of assets which are not so transferred.
(b) the liability to stock in trade shall not exceed
the unabsorbed input tax as at December
31, 2012.”.
Amendment of 10. Section 21 of the principal enactment as last amended
section 21 of the by the Value Added Tax (Amendment) Act, No.14 of 2007 is
principal
hereby amended in subsection (1) thereof, by the substitution
enactment.
for all the words commencing from “(1) Every registered person
shall” to the words “to be set out in such form:” of the
following:—
“(1) Every registered person shall furnish to the
Commissioner-General –
(a) for any taxable period ending prior to January 1,
2013, not later than the twentieth day of the month
after the expiry of each taxable period ;
(b) for any taxable period commencing on or after
January 1, 2013 not later than the last day of the
month after the expiry of each taxable period
Value Added Tax (Amendment) 11
Act, No. 17 of 2013
a return either in writing or by electronic means of his
supplies during that taxable period. Every such return
shall be in the specified form and shall contain all such
particulars as may be required to be set out in such form.”.
11. Section 22 of the principal enactment as last amended Amendment of
section 22 of the
by the Value Added Tax (Amendment) Act, No.7 of 2012 is principal
hereby further amended as follows:- enactment.
(1) in subsection (1) of that section, by the repeal of the
first proviso to that subsection and the substitution
therefor of the following :-
“Provided that, the amount of tax due on the supply
of –
(a) garments within such percentage as is
permitted to sell locally by the Board of
Investment of Sri Lanka, established by the
Board of Investments of Sri Lanka Law, No.
4 of 1978 under any agreement entered into
by the manufacturer of garments for export
under section 17 of the aforesaid law as
approved by the Board of Investment of
SriLankaortheDirector-Generalof
Customs , shall be rupees twenty five for each
such garment so supplied within Sri Lanka;
(b) fabric including any product as specified in
the following sub-paragraphs made out of
fabric within such percentage as is
permitted to sell locally by the Board of
Investment of Sri Lanka, established by the
Board of Investment of Sri Lanka Law, No.
4 of 1978, under any agreement entered into
by the manufacturer of fabric for export
under section 17 of the aforesaid law, as
approved by the Board of Investment of
Sri Lanka or the Director-General of
Customs shall be at the following rates:—
12 Value Added Tax (Amendment)
Act, No. 17 of 2013
“(i) linen or curtains at rupees forty per
kilogram;
(ii) towels at rupees twenty five per item;
(iii) bags made out of fabric at rupees
forty per item ;
(iv) excess fabric as cut pieces not more
than two metres in length of each
piece at rupees twenty five per
kilogram;
(v) any other fabric at rupees forty per
kilogram.”.
(2) in subsection (5) of that section –
(a) in paragraph (e) of the second proviso, by the
repeal of all the words commencing from “(e) there
is an excess of input tax” to the words “more than
fifty per centum”and the substitution therefor of
the following:-
“(e) there is an excess of input tax including tax
deferred under section 2, of any registered
person who is registered with the Simplified
Value Added Tax Scheme administrated by
the Commissioner -General referred to in
paragraph (e) of subsection (2) of section 2
with effect from April 1, 2011, being a
supplier of goods to exporters of goods,
referred to in that paragraph for the taxable
period was more than fifty per centum.”;
(b) in the third proviso, by the substitution for the
words and figures, “in items (i), (ii), (iii) or (iv) of
paragraph (e) of subsection (2)”, of the words
and figures “in items (i), (ii), (iii), (iv), (v) or (vi ) of
paragraph (e) of subsection (2)”;
Value Added Tax (Amendment) 13
Act, No. 17 of 2013
(3) in subsection (6) of that section, by the addition
immediately after sub-paragraph (iv) of that subsection,
the following new sub- paragraph:-
“(v) on any tax invoice issued prior to the
commencement of the liability to tax unless such
tax invoice is connected to any business
approved under subsection (7) of this section”;
(4) by the repeal of paragraph (ii) of the second proviso
to subsection (10), and the substitution therefor of
the following new paragraph:-
“(ii) supplies on which the tax is differed under this
Act, being supplies made to exporters by a supplier
so far as both are registered persons with the
Simplified Value Added Tax Scheme administrated
by the Commissioner-General referred to in
paragraph (e) of subsection (2) of section 2 subject
to the conditions specified in the guidelines
specified by the Commissioner-General; and
(5) by the insertion immediately after subsection (10), the
following new subsection:-
“(11) Subject to the provisions of subsection (5) of
section 16, any unabsorbed balance of the
allowable input tax, calculated in terms of the
provisions of this section, as at December 31,
2012, not claimable after January 1, 2013, due to
the cancelation of the registration of any
registered person whose total supplies does
not exceed rupees three million for a period of
three months and rupees twelve million per year
in the year commencing from January 1, 2012
and ending on December 31, 2012, may be set
off against the taxes administrated by the
Commissioner-General on a request made in
writing to the Commissioner-General for such
purpose:
14 Value Added Tax (Amendment)
Act, No. 17 of 2013
Provided that, the tax under this subsection
shall be set off after the finalization of the liability
on the cancellation of the registration with the
approval of the Commissioner-General.”.
Amendment of 12. Section 25A of the principal enactment as last amended
section 25A of
by the Value Added Tax (Amendment) Act, No.7 of 2012 is
the
principal hereby further amended as follows:-
enactment.
(1) in paragraph (iv) of subsection (1) of that section, by
the substitution for the words and figures
“commencing on or after January 1, 2009:” of the words
“commencing on or after January 1, 2009, or the Central
Bank of Sri Lanka established by the Monetary Law
Act, (Chapter 422) (with effect from July 1, 2003):”
(2) by the repeal of subsection (2) of that section and the
substitution therefor of the following:-
“(2) Every specified Institution or other person,
carrying on the business of supplying of any financial
services in Sri Lanka, shall be required to be
registered:-
(a) where the value of such supply for a period of
three months exceeds five hundred thousand
rupees or for a period of twelve months one million
eight hundred thousand rupees, as the case may
be, if such registration has taken place for any
period prior to January 1, 2013;
(b) where the value of such supply for a period of
three months exceeds three million rupees or for a
period of twelve months exceeds twelve million
rupees, as the case may be, if such registration
has taken place for any period on or after January
1, 2013.”.
(3) by the repeal of subsection (3) of that section and the
substitution therefor of the following:-
Value Added Tax (Amendment) 15
Act, No. 17 of 2013
“(3) Every specified institution or other person
required to be registered under subsection (2), shall
make an application for registration in the specified
form to the Commissioner-General not later than thirty
days from the date of completion of the requirements
specified in subsection (2):
Provided that, any institution registered under this
Act and which is also a specified institution within the
meaning of this Chapter, shall be deemed for all
purposes to be a specified institution registered under
this Chapter:
Provided further, the Commissioner-General shall
register any person who has not made an application
for registration under this Chapter if the Commissioner-
General having regard to the nature of the activities
carried on or carried out by such person, is of opinion
that such person is required to be registered under
this Chapter. In the circumstances such person shall
be afforded an opportunity of being heard prior to
being registered under this Chapter and register such
person accordingly with effect from such date as may
be determined by the Commissioner-General.”.
(4) by the addition immediately after subsection (4) thereof,
of the following new subsection:-
“(5) Every registered person shall notify the
Commissioner-General in writing of any change –
(a) in the name, address and place at which
any taxable activity is carried on or carried
out by such person;
(b) in the nature of the taxable activity carried
on or carried out by such person;
(c) in the person authorized to sign returns and
other documents; and
16 Value Added Tax (Amendment)
Act, No. 17 of 2013
(d) in ownership of the taxable activity,
not later than fourteen days after the occurrence of
such change.”.
Amendment of 13. Section 25B of the principal enactment is hereby
section 25B of the amended in subsection (1) thereof by the repeal of paragraph
principal
enactment. (b) and the substitution therefor of the following:-
“(b) six months for any taxable period commencing on or
after January 1, 2011:
Provided that, in the case of a specified institution
or any other person whose accounts are made up for a
twelve months period ending on the 31st day of March
the six months period may be commenced on the 1stday
of April and the 1st day of September for that period of
twelve months. In such event a separate return for the
period commencing from the 1stday of January to the
31st day of March shall be submitted at the time of
such change with the approval of the Commissioner-
General.”.
Amendment of 14. Section 25C of the principal enactment as last amended
section 25C of the
principal by the Value Added Tax (Amendment) Act, No.9 of 2011 is
enactment. hereby further amended as follows:-
(1) in subsection (1) of that section –
(a) by the substitution in the proviso to that
subsection, for the words “The estimated amounts
shall be adjusted to reflect the actual amount on
half yearly basis.” of the words “The estimated
amounts shall be adjusted to reflect the actual
amounts with the audited statement of accounts
on yearly basis and such adjustment shall be
submitted within six months after the closing date
of the relevant accounting period.
Value Added Tax (Amendment) 17
Act, No. 17 of 2013
(b) by the repeal of paragraph (a) and substitute the
following :—
“(a) in the case of specified employees under
Chapter XIV of the Inland Revenue Act, No.
10 of 2006, the gross remuneration payable
to such employees and reflected in the pay
sheet maintained under section 119 of the
Inland Revenue Act, No.10 of 2006;” and
(2) in subsection (2) of that section, by the substitution
for the words and figures “under section 110 of the
Inland Revenue Act, No. 38 of 2000.” of the words and
figures “under section 119 of the Inland Revenue Act,
No. 10 of 2006.”.
(3) in subsection (5) of that section –
(a) by the substitution in paragraph (a) thereof, for
the words and figures “under item (xi) of the First
Schedule but taxable under this Chapter;” of the
words and figures “under item (x) of paragraph
(b) of PART II of the First Schedule but taxable
under this Chapter;”;
(b) by the substitution in paragraph (d) thereof, for
the words “(d) the profit or income on interest
arising or accrued from inter-company
transactions” of the words “(d) the profit or
income (not being profit from a business) on
interest arising or accrued from inter-company
transactions”;
(c) by the substitution in paragraph (f) thereof, for
the words “(f) the dividend income arising to any
person,” of the words “(f) the dividend income
(not being profit from a business) arising to a
person,”;
18 Value Added Tax (Amendment)
Act, No. 17 of 2013
(d) by the repeal of paragraph (h) thereof and the
substitution therefor of the following :—
“(h) the profits or income (not being profits from
a business) from the exchange of currency
other than such profits or income arising or
accruing to any person primarily engaged
in the business or exchange of currency or
any “specified institution” within the
meaning of this Chapter or a person not
registered with the Central Bank of Sri Lanka,
but providing services similar to such
services provided by a finance company,
included in the profit calculated as specified in
subsection (1) of this section shall be treated as
zero.”;
(4) by the repeal of subsection (8) thereof and the
substitution therefor, of the following:-
“(8) Every specified institution or any other person
shall for the purpose of the calculation of tax,
submission of returns and information to be furnished
relating to such return, payments of tax, issue of
assessments, imposition of penalty for non-
submission of the returns or the information required
for the purpose of this Chapter, follow –
(a) the guidelines specified by the Commissioner-
General; and
(b) the relevant guidelines specified in the Order
published in the Gazette,
having considered the uniform application of the
calculation of the liability and any other matter
specified in the guideline provisions of this Chapter.”.
Value Added Tax (Amendment) 19
Act, No. 17 of 2013
15. Section 25D of the principal enactment as last amended Amendment of
by the Value Added Tax Act, No.8 of 2006 is hereby further section 25D of
the
amended by the substitution for the words “any registered
principal
specified institution” of the words “any registered specified enactment.
institution or other person”.
16. Section 25H of the principal enactment is hereby Amendment of
amended in paragraph (b) of subsection (1), by the substitution section 25H of
the
for the words and figures “every quarter commencing on
principal
January 1, 2011.” of the words and figures “every quarter enactment.
commencing on January 1, 2011 and ending on December 31,
2012,”.
17. Section 25I of the principal enactment as last amended Amendment of
by the Value Added Tax (Amendment)Act, No.9 of 2011 is section 25I of the
principal
hereby further amended as follows:-
enactment.
(1) in subsection (1) of that section :—
(a) by the substitution for the words, “referred to in
subsection (2), may apply for registration” , of
the words and figures “referred to in subsection
(2), may prior to December 31, 2012 apply for
registration”;
(b) in paragraph (b) of subsection (1), by the
substitution for the words and figures “ shall be
valid for a period of twelve years from the date of
commencement of the quarter” of the words and
figures “shall be valid for any quarter ending
prior to January 1, 2013 from the date of
commencement of the quarter”;
(c) by the addition immediately after paragraph
(b) of that subsection, the following new
paragraph :-
“(c) Any registration obtained under this
Chapter shall be treated as cancelled with
effect from the period commencing from
January 1, 2013:
20 Value Added Tax (Amendment)
Act, No. 17 of 2013
Provided that, any person or partnership
registered under this Chapter whose
turnover exceeds rupees twelve million per
year and fulfils the criteria for registration
under section 10 shall obtain a registration
accordingly.”.
Amendment of 18. Section 26 of the principal enactment is hereby
section 26 of the
amended as follows:-
principal
enactment
(1) in subsection (1) thereof, by the substitution for the
words and figures “(1) (1) The tax in respect of any”
of the words and figures “(1) The tax in respect of
any”;
(2) by the insertion immediately after subsection (1) of
that section of the following:-
“(1A) Notwithstanding the provisions of
subsection (1) of this section, in the case of a
registered person whose taxable supplies
consist of any supplies other than the supply
of goods manufactured in Sri Lanka by such
manufacturer, the tax in respect of any taxable
period on or after January 1, 2013 shall be
paid :—
(i) for the period from the 1st day to the 15th
day of any month on or before the end of
that month; and
(ii) for the period from the 16th day to the end
of the month on or before the 15th day of
the subsequent month,
subject to the making of any final adjustments,
if any , with the submission of the return .
Any tax not paid as set out above 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, each such person shall be deemed to be a
defaulter for the purposes of this Act.”.
Value Added Tax (Amendment) 21
Act, No. 17 of 2013
19. Section 28 of the principal enactment is hereby amended Amendment of
by the addition immediately after subsection (4) of that section section 28 of the
principal
of the following:- enactment.
“(5) Where any person whose turnover from every
trade or business carried on by such person for any
period of twelve months ending prior to April 1, 2011,
does not exceed three hundred million and who has
not complied with any law relating to tax as
administrated by the Commissioner-General, requests
that he be registered under section 10 of this Act,
notwithstanding the provisions of subsection (1) of
this section and subsection (2) of section 33 of this
Act, the turnover of that person for the above period
shall not be assessed if such person undertakes to-
(a) invest his past earnings from that trade or
business in any business prior to March 31, 2014;
and
(b) comply with the requirements of this Act for any
subsequent period.”.
20. The following new section is hereby inserted Insertion of
immediately after section 64 of the principal enactment and section 64A in
the principal
shall have effect as section 64A of that enactment:-
enactment.
“Certain 64A. Where the assessor is of the opinion
transactions that any transaction which reduces or would
and
dispositions have the effect of reducing the amount of tax
to be payable by any person is artificial or fictitious
disregarded. or that any disposition is not in fact given effect
to, he may disregard any such transaction or
disposition and the parties to the transaction or
disposition shall be assessable accordingly.
In this section “disposition” includes any
trust, grant, covenant, or arrangement.”.
22 Value Added Tax (Amendment)
Act, No. 17 of 2013
Amendment of 21. Section 67 of the principal enactment as last amended
section 67 of the
principal by the Value Added Tax (Amendment) Act, No.9 of 2011 is
enactment. hereby further amended as follows:-
(1) in paragraph (a), by the substitution for the words and
figures “under section 10; or” of the words and figures
“under section 10 or section 25A; or”;
(2) by the repeal of paragraph (aa) thereof;
(3) in paragraph (b), by the substitution for the words
and figures “under section 19; or” of the words and
figures “under section 19 or subsection (5) of section
25A; or”;
(4) in paragraph (f), by the substitution for the words and
figures “under section 21; or” of the words and figures
“under section 21 or section 25B ; or”;
(5) in paragraph (g), by the substitution for the words
and figures “under section 21 or;” of the words and
figures “under section 21 or section 25B or”;
(6) by the substitution in paragraph (l) of that section for
the words “issues a tax invoice,” of the following:-
“issues a tax invoice; or
(m) fails to comply with the requirements specified
by order published in the Gazette or the
guidelines issued by the Commissioner-General
under sections 2 or 25C, as the case may be ; or
(n) fails to furnish an annual adjustment under sub
section (1) of section 25C,”.
Value Added Tax (Amendment) 23
Act, No. 17 of 2013
22. The First Schedule of the principal enactment is hereby Amendment of
the first schedule
amended in PART II thereof as follows:-
of the
principal
(1) in paragraph (a) of that PART – enactment.
(i) by the repeal of item (viii) and the substitution
therefor of the following item:-
“(viii) agricultural tractors or road tractors for
semi-trailers;”;
(ii) In item (xxii)–
(a) by the substitution for the words in sub-
item (i) “moulding (steel, glass, rubber or
plastic),” of the words, “moulding (steel,
glass, mineral material, rubber or plastic),”;
(b) by the substitution for the words and
figures “under the Sri Lanka Export
Development Act, No. 40 of 1979,” of the
following:-
“under the Sri Lanka Export
Development Act, No. 40 of 1979;
(vi) bowsers, bulldozers, graders,
levelers, excavators, fire fighting
vehicles;
(vii) raw materials for the manufacture
of energy saving bulbs,”.
(2) in paragraph (b) of that PART –
(i) in sub-paragraph (A) of paragraph (b) of item (ii),
by the substitution for the words and figurers “in
respect of any rental falling due for payment on
or after April 1, 2012.” of the following:-
“in respect of any rental falling due for
payment on or after April 1, 2012;
24 Value Added Tax (Amendment)
Act, No. 17 of 2013
(iii) bowsers, bulldozers, graders, levelers,
excavators, fire fighting vehicles or road
tractors for semi-trailers as exempted for
Custom purposes under Harmonize
Commodity Description and Coding
System Numbers in respect of any rental
falling due for payment on or after
January 1, 2013,”.
(ii) by the repeal of item (xx) and the substitution
therefor of the following:-
“(xx) locally manufactured coconut oil or coco
peat, coir fiber, grow pellets, grow bags,
twist fiber or coconut husk made out of
coconut waste;”.
(iii) by the repeal of item (xLiii) and the substitution
therefor of the following:-
“(xLiii) services which result in the improvement
of quality, character or value of any yarn,
fabric or garment so far as such services
are provided to persons other than
exporters of such products;”.
(iv) by the addition immediately after item (xLiv) of
the following:-
“(xLv) services by a Unit Trust Management
company so far as such services are
provided to any Unit Trust ;
(xLvi) services being hotel accommodation to
any sportsman, organizer of any sport
event or sponsor arriving in Sri Lanka
for participating in any sport event or
activity connected with sports, as may
be approved by the Minister who is in
charge of the subject of Sports”.
Value Added Tax (Amendment) 25
Act, No. 17 of 2013
(3) in paragraph (c) of that PART –
(i) by the repeal of item (xxvii) and the substitution
therefor of the following:-
“(xxvii) packing materials exclusively for the use
of packing of pharmaceuticals or
ayurvedic medicines manufactured in Sri
Lanka and which are imported by the
manufacturer of such pharmaceuticals
or ayurvedic medicines, so far as such
packing materials are not manufactured
in Sri Lanka as approved by the Secretary
to the Ministry of the Minister to whom
the subject of Health is assigned or the
Commissioner of the Department of
Ayurveda, as the case may be, for this
purpose.”.
(ii) in item (xxxvi), by the substitution for the words
“subject to the chargeability of a Cess of rupees
seventy five per kilogram on importation” of the
words “subject to the chargeability of a Cess at a
specific rate referred to in sub-item (ii) of item
(xxxvii) of paragraph (b) of PART II of the First
Schedule.”.
(iii) by the addition immediately after item (xxxvi) of
that paragraph, the following new item:-
“(xxxvii) gully bowsers, semi-trailers for road
tractors, any machinery or equipment
used for garbage disposal activities
carried out by any local authority, for
the purpose of provision of such
services to the public, as approved by
the Secretary to the relevant
Ministry.”.
(4) by the addition immediately after paragraph (h) of that
PART, the following new paragraphs:-
“(i) the supply of goods or services by the Central
Bank of Sri Lanka established by the Monetary
Law Act (Chapter 422);
26 Value Added Tax (Amendment)
Act, No. 17 of 2013
(j) the supply of any services by any public
corporation to the extent of provision of such
services on behalf of the Government of Sri Lanka,
free of charge out of the funds voted by Parliament
from the Consolidated Fund or out of any loan
arranged through the Government.
(k) the supply of goods or services by any individual
who is a citizen of Sri Lanka and who carries on
any business of manufacturing of any article other
than any liquor or tobacco product or supply of
any services after returning from a foreign
employment for a period of five years reckoned
from the beginning of the year of assessment in
which such business commences if such
individual-
(i) returns from such foreign employment on
or after January 1, 2013; and
(ii) invests his earnings from such foreign
employment to commence such business.”.
Validation. 23. Any person who collects the Value Added Tax as
provided for in this Act during any period commencing from
January 1, 2013 and ending on the date on which the Certificate
of the Speaker in endorsed in respect of this Act, shall be
deemed to have acted with due authority and such collection
of tax shall be deemed to have been, and to be, validly made:
Provided that, the aforesaid provisions shall not affect
any decision or Order made by any Court or any proceedings
pending in any Court in respect of any tax collected as provided
for in this Act during such period.
Sinhala text to 24. In the event of any inconsistency between the
prevail in Sinhala and Tamil texts of this Act, the Sinhala text shall
case of
inconsistency. prevail.

Value Added Tax (Amendment) 27
Act, No. 17 of 2013
Annual subscription of English Bills and Acts of the Parliament Rs. 885 (Local), Rs. 1,180
(Foreign), Payable to the SUPERINTENDENT, GOVERNMENT PUBLICATIONS BUREAU, DEPARTMENT OF
GOVERNMENT INFORMATION, NO. 163, KIRULAPONA MAWATHA, POLHENGODA, COLOMBO 05 before 15th
December each year in respect of the year following.
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