VAT input claim
S R Balachandran Council Member, National
Chamber of Commerce of Sri Lanka
In accordance with budget proposals 2011 announced on November 22,
2010, VAT input claim outstanding as at December 31, 2010 would be
allowed as revenue expenditure in four equal annual installments which
would be set off in four years of assessments commencing 2010/2011,
subject to the provisions specified in Section 25 and 26 of the Inland
Revenue Act, i.e. No refund was allowed.
Since companies were going to lose in millions, due to no fault of
theirs we had made representations to the Finance and Planning Ministry
for necessary amendments. Further this matter was brought to the
attention of the President.
By press notification dated December 12,2010 it was announced that
installments @ 10 percent (maximum) of the VAT input outstanding as at
December 31, 2010 would be allowed as deductions against vat liability
per taxable period which was increased from one to three months
effective January 1, 2011. As it would take 30 months minimum to recoup
this balance representations were made again as before.
I am pleased to observe that by press notification dated February 11,
2011, 10 percent (maximum) deduction would be allowed every month,
equivalent to 30 percent per quarter so that the balance outstanding
could be re-couped in ten months (minimum). We sincerely thank the
President for the swift action taken thereby saving millions for our tax
payers (VAT). I also thank the press for the co-operation extended to
us.
I suggest tax payers (VAT)obtain clarification from the Inland
Revenue Department direct and act accordingly. |