Mahesh Ranawaka

Nation Building Tax (NBT)

Economic Service Charges ( ESC)

Stamp Duty

Withholding Tax (WHT)

Scope …..

Payable by every person (company, body

of person , dealer or Partnership and

individual) who…..

Imports of any article

Carries on the business of

Manufacture of any article

Providing a service of any

description

Wholesale and Retail of any

article(w. e .f 01/01/2011)

Legislation

Act No. 9 of 2009

Effective from 1st of February2009

Amendment Act. No. 32 of 2009

Amendment Act. No. 10 of 2011

Amendment Act. No. 09 of 2012

Amendment Act No. 11 of 2013

Chargeability

Every liable person whose liable turnover

for any quarter exceeds

(i) Rs.3,000,000 per qtr from 01.01.2012

for

Manufacturers, Service providers,

Whole Sellers & Retail Sales traders

Chargeability Cont..

From 01.01.2011

Operating a Hotel, Guest house,

Restaurant or other similar business,

Supply of Labour (manpower),Providing

Educational services, etc... Turnover

Exceeds 25 Mn for a Quarter

Wholesale & Retail - 50% out of the liable

turnover

Distributors - 25% out of the liable

turnover

Calculation of NBT

Liable Turnover * 2% xxx

Less:

Tax Credits xxx

Tax Payable xxx

Less:

Installments payable xxx

Unabsorbed tax credit xxx xxx

Balance Tax Payable xxx

Liable Turnover

In the case of manufacturer, service

provider , Dealer or Buying & Seller

proceeds receivable whether received

or not

Other than

Bad debts, VAT and Excise Duty

In the case of importer

the value of any article ascertained

under section 6 of the Value Added Tax

Act for the purpose of importation.

Tax Rates

● 1% - 01/02/2009 - 30/04/2009

● 3 % - From 01/05/2009 - 31/12/2010

● 1.5% - Concessionary Rate From

01/07/2009 to 31/12/2010 (Only

for local rice production)

● 2% - 01/01/2011 for all sectors

Credit for NBT

Only for Manufacturers

◦ Article imported

◦ Article purchased from the registeredmanufacturer

◦Whole Sale / Retail, Service providers arenot entitled for any credit for NBT paid by

them.

Refund

◦ No refund will be made to any registeredperson but excess payment can be

carried forward for setting off.

VAT Act Section 06

CIF value + Customs Duty + CESS +

PAL + S. Excise any other duty

payable to customs + 10% of the CIF

value (mark up)

NBT Calculation

1. 100 - 2% = 2

2. 100

2

102 X 2% = 2.04

3. 100

2.04

102.04 X 2% = 2.0408

100 X 2 % = 2.04

98

Return & Payment

Return

submit on 20th dates of the month

immediately succeeding the end of the

relevant quarter.

(Quarterly Basis)

Payment

Self payment on first two months and

balance payment have to be paid on 20th

date of the month immediately succeeding

the end of the relevant quarter.

Adjustment for Income Tax

Gazette No. 1606/31 dated 09/06/2009

Y. A 08/09 No adjustment

09/10 2/3 payable not

allowed

(w.e.f. 1/05/2009)

10/11 2/3 payable for first 09

month not allowed

11/12 Fully allowed

Charge based on Turnover of the

business from 2006/07 on ward

Legislation

Economic Service Charge (ESC) Act

No. 13 of 2006 &

Economic Service Charge

Amendment Acts

No. 15 of 2007

No. 11 of 2008

No. 16 of 2009

No. 11 of 2011

No. 06 of 2013

Liability of ESC

Tax should be paid on liable turnover.

Liable threshold for ESC is Rs.50Mn

per Quarter.

Tax Rate is 0.5% of the turnover.

Calculation of Tax

= Liable Turnover * 0.5%

Liable Turnover For ESC

The amount receivable, whether actually

received or not from every transaction

entered into within the relevant quarter

with regard to the trade, business,

profession or vocation carried

after deducting the following amount.

VAT included in the turnover

Proceeds of the sale of capital assets.

Bad debts (bad debt recoveries shall taken)

Payments & Returns of ESC

Payments,

1st Quarter – 20th July

2nd Quarter – 20th October

3rd Quarter – 20th January

4th Quarter – 20th April

Return,

Annual Return - 30th April

(Annual Basis)

Exemption from ESC

The turnover from the following

businesses will be exempt from ESC.

◦ Distributors as defined in the ESC Act

◦ Dealers in Lottery

◦ Unit Trust or Mutual Fund

◦ All Air Lines & Shipping Lines

◦ Life Insurance Premium

22

Sett off against Income Tax

Amount paid as ESC on the turnover

which can be set off against the

income tax liability within 5 years of

assessment

From the year of assessment in which

such ESC payment made

Govr. was abolished in 2002 and

reintroduced in 2006.

Stamp Duty (Special Provision)Act No.12

of 2006 with effected on01.04.2006.

Tax charge by the Provincial Council,

Revenue authority.

If Assessor is opinion that an instrument

has not been duly stamped , he shall

issue a notice assessing the amount of

understated Stamp Duty

Who shall pay……

Payable by,

In the case of a policy of Insurance,

person effecting the insurance.

In the case of a transfer or assignment of

any share, transferee or assignee of such

share.

In the Case of Leasing, Lessee.

In the case of claim, demand or request

by service provider of credit card, card

holder.

In all other cases, person drawing, making

Stamp Duty…. Affidavit RS.25

Policy of Insurance Rs.o.50 for

each 1000

Notary Warrant Rs.1000

Credit Card Rs. 10 for

every 1000

Mortgage Rs.1 for every

1000

Issue, Transfer or Assignment of Rs. 5 for every

any shares 1000

Receipt or discharge given

◦ Up to Rs. 25,000 Exempt

◦ Above Rs. 25,000 Rs. 25

PAYE on employment Benefit

PAYE on Director Fee

Rs. 25000 or below 10%

Rs. 25,000 or above 16%

10% on Rent Income

10% on Winning from Lottery (

Amount more than 500,000)

WHT on Interest Income