Sri Lanka Imposes 18% VAT on Fabric Imports, Removes CESS Levy from April 2026

• Sri Lanka has abolished the VAT zero-rate on fabric imports and removed the CESS levy, effective 1 April 2026.
• An 18% standard VAT rate will now apply to both imported and locally supplied fabric.
• The changes were announced by the Inland Revenue Department and formalized through new Gazette Notifications.
• Fabric imported before 1 April 2026 and subject to CESS will remain VAT-exempt when supplied locally, provided proper records are maintained.
• These measures mark a major shift in tax policy for Sri Lanka’s textile industry.

Source: regfollower.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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