The Sri Lanka Inland Revenue Department has issued a Notice to VAT Registered Persons on changes in the VAT rates as per the Extraordinary Gazette Notification No. 2295/08 of 31 August 2022. This includes the following VAT rates with effect from 1 September 2022:
- 0% on the import of goods (fabrics) set out in the H.S. Code and description specified in Columns I and II of Schedule of the Extraordinary Gazette Notification No. 2095/20 of 1 November 2018; and
- 15% on the import and/or supply of goods or supply of services, other than the import of goods (fabrics) referred to above (up from 12%).
The notice also clarifies that the 15% VAT rate applies on the supply of services by a hotel, guest house, restaurant, or other similar businesses providing similar services, registered with the Sri Lanka Tourism Development Authority, for which a 0% VAT rate was previously provided from 1 December 2019 to 31 May 2022. Lastly, it is clarified that the increased VAT rate of 18% on the supply of financial services continues to apply.
Source Orbitax
