According to the budget speech presented to Parliament by President Anura Kumara Dissanayake follows are the amendments proposed to VAT
Value Added Tax (VAT) [Amendments to the Value Added Tax Act, No.14 of2002]
2.1 Import of packing materials 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, will be exempted from VAT.
2.2 Provisions will be introduced permitting the issuance of regulations prescribing the manner of registration, charging, collection, filing return,etc. relating to the imposition of VAT on the services provided through digital platforms.
2.3 Amendments consequential to the removal of SVAT and facilitate the refunding process will be incorporated in the VAT Act.
2.4 Simplified Value Added Tax (SVAT) system will be replaced by a risk-based refund system. To ensure the smooth operation of the new system,a pilot project will be implemented, to issue refunds through the
RAMIS, subject to the conditions specified in the Risk Based Refund Scheme as may be specified by the CGIR, by an order published in the gazette.
2.5 Entertainment tax charged by the local authorities will be allowed to deduct in ascertaining the value of supply of film exhibition service.
2.6 Supply of goods or services by/to any a business identified and approved as a “Business of Strategic Importance” in terms of Section 52 of the Colombo Port City Economic Commission Act, No.11 of 2021 subject to the Colombo Port City (guidelines on the grant of exemptions or incentives to Businesses of Strategic Importance) regulations, No. 2 of 2023, as specified in the Extraordinary Gazette Notification No.2343/60 dated 04.08.2023, with effect from 01.01.2024.
2.7 Value Added Tax Arrears as per records of Commissioner General of Inland Revenue in respect of projects carried out by construction contractors of Tsunami projects, will be written off.
2.8 Input tax deduction on the capital goods such as machinery, equipment or vehicles imported for projects where the value added tax at the time of import is differed, will be disallowed.
2.9 Use of Point of Sale (POS) Machines by the VAT registered persons will be made mandatory and operationalized
