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 matter 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.
There are certain supplies of goods and services exempt from VAT. (As mentioned in the Part II of the First Schedule of VAT Act)
Acts
Chargeability for Value Added Tax excluding chargeability on Financial Services
- Manufactures
- Importers
- Services providers
- Suppliers who supply goods under tender agreement
- Wholesale and retail trade
Who are liable for Registration?
- Every person who carries on a taxable activity
- If his taxable supply of goods or services or supply of goods and services,
- has exceeded Rs.3,750,000 per quarter, or
- has exceeded 15,000,000 per annum, or
- likely to exceed Rs.3,750,000 in the succeeding quarter or Rs 15 Million in the succeeding twelve months period
- A person or partnership engaged in the business of wholesale or retail trade, whose quarterly turnover/supplies exceeds Rs. 100 Million (including exempt or excluded supplies)
- If his taxable supply of goods or services or supply of goods and services,
VAT Rates
- Standard Rate 11%
- Zero Rate
Registration for VAT
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, and Colombo 02. Thereafter, VAT registration can be applied 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 liability 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
- For 22(7) registration - Project Plan
- a copy of agreement with Board of Investment(if any)
- deed or rent/lease agreement of property
- sources of funds to the project to be proved for non BOI projects
- a list of intended purchases – local & imports
Responsibilities 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.
VAT Payments
- Any person or partnership who supplies services other than Financial Services or imports and supplies of goods or engaged in the business of wholesale or retail, is required to make the payment as follows:
- for the period 1st day – 15th day of a month - on or before end of the month
- for the period 16th day - end of a month - on or before 15th day of the following month
- Any other Person or Partnership (other than above)who supplies goods manufactured by such Person or Partnership who engaged in supply of Financial Service is required to make the payment for the particular month on or before 20th day of the following month.
Furnishing VAT Returns
Due date :- On or before the last day of the month after the expiry of each taxable period (may be monthly or quarterly)
- Returns for Special Projects and Strategic Development Projects should be handed over to the Senior Commissioner (VAT) on the 2nd floor of Inland Revenue building,
- Returns for VAT on Financial Services should be handed over to the Banking and Financial Services Unit, on the 4th floor of Inland Revenue building,
- All other VAT Returns should be handed over to the DPRA Unit, 7th Floor (North Wing) of Inland Revenue building,
Halo,I'm Helena Julio from Ecuador,I want to talk good about Le_Meridian Funding Service on this topic.Le_Meridian Funding Service gives me financial support when all bank in my city turned down my request to grant me a loan of 500,000.00 USD, I tried all i could to get a loan from my banks here in Ecuador but they all turned me down because my credit was low but with god grace I came to know about Le_Meridian so I decided to give a try to apply for the loan. with God willing they grant me loan of 500,000.00 USD the loan request that my banks here in Ecuador has turned me down for, it was really awesome doing business with them and my business is going well now. Here is Le_Meridian Funding Investment Email/WhatsApp Contact if you wish to apply loan from them.Email:lfdsloans@lemeridianfds.com / lfdsloans@outlook.comWhatsApp Contact:+1-989-394-3740.
ReplyDeleteNice post, thanks for sharing...!!
ReplyDeleteVAT stands for Value Added Tax. It is a tax levied by the government on the goods and services sold. It is a consumption tax paid by the final consumer, which is collected from the supplier. VAT training teaches about the consumption tax, which means that it is included in the price of the product, and the consumer pays the tax indirectly when he or she purchases goods or services. VAT is a consumption tax, which means that it is included in the price of the product and the consumer pays it indirectly when he purchases goods or services.