VAT

Garments VAT Adjustments

• For each garment other than panties, socks, briefs and boxer shorts identified under the Harmonized Commodity Description and Coding System Numbers for custom purposes – w.e.f. 01.11.2019 – increased from Rs. 75 to Rs. 100.
• For six pieces of panties, socks, briefs and boxer shorts identified under the Harmonized Commodity Description and Coding System Numbers – w.e.f. 01.11.2019 – increased from Rs. 75 to Rs. 100.

Other VAT Revisions

• Fifteen (15) day payments for other than manufacturers and financial services have been removed w.e.f. 01.10.2019.
• Exports include goods sent to foreign projects by construction contractors.
• Input tax paid by lower-rate suppliers is limited to 5% (Hotel sector).

VAT Exemptions

• Supply of condominium housing units is exempted if the value of a single unit does not exceed Rs. 25Mn, w.e.f. 01.04.2019.
• Exemption from 01.11.2019 – locally produced rice bran oil made out of locally produced rice.

NBT

Construction Sector Exemption

• Exemption effective on or after November 1, 2019, for a construction contractor or sub-contractor.

Tourism & Hospitality Services

• Services provided by a hotel, guest house, restaurant, or similar business will be exempted from NBT on or after November 1, 2019, if:
• Payment is received in foreign currency through a bank in Sri Lanka.
• The establishment is registered with the Ceylon Tourist Board.

Legal Provisions

• Provisions of Inland Revenue Act No. 24 of 2017 will apply for assessments, appeals, etc.

Finance Act

1. Luxury Tax

• Registration on or after 01.11.2019: Applies to any assembled or unassembled motor vehicle, excluding:
  • Van
  • Single cab / Double cab
  • Motorcycle / Motor tricycle
  • Motor ambulance / Motor hearse
  • Lorry / Tractor / Hand tractor / Trailer
  • Any motor vehicle for transport of goods
  As identified under the Harmonized Commodity Description and Coding System numbers under the Customs Ordinance (Chapter 235).
• Registration before 01.11.2019: Applies to:
  • Diesel motor vehicles with cylinder capacity > 2,300 CC
  • Petrol motor vehicles with cylinder capacity > 1,800 CC
  • Electric vehicles with motor power > 200 Kw
  Excludes:
  • Dual purpose petrol vehicles ≤ 2,200 CC
  • Dual purpose electric vehicles
  • Van, single cab, or wagon

2. Carbon Tax

• Carbon tax was valid only from 01.01.2019 to 30.11.2019.

3. Cellular Tower Levy

• Penalty provisions added for the Cellular Tower levy.

4. Levy on Foreign Commercial Transactions

• 3.5% levy on the sum remitted outside Sri Lanka for any transaction.
• Effective date to be gazetted.
• Based on original bills before committee-level amendments on 23rd October 2019.