TAX INFORMATION AT A GLANCE – AN UPDATE (01.01.

2005)

Income Tax • Non-uniform compensation for loss of

♦ Legislation: Inland Revenue Act No. 38 of
2000
♦ Implementation Agency: Department of
Inland Revenue.
employment - 20%
♦ Capital gains (also applicable to Corporate
Income Tax) - abolished from 1.4.2002
♦ Rates of Depreciation (also applicable to
Corporate Income Tax )

♦ The global system is adopted in computing Type of asset Rate (%)

taxable income. Income from all sources Plant, machinery or fixtures, 12 1/2
computed according to the provisions of the Vehicles & furniture 20
Inland Revenue Act is considered as total Qualified buildings 6.67
statutory income from which certain specific Intangible Assets other than goodwill 10
deductions are made to arrive at the assessable Any other Information technology
income. Tax free allowance and qualifying equipments & calculating equipments 25
payment allowance (on certain specific Railway, Bridges, Reservoirs, electric or
payments) are deducted from the assessable Water distribution lines, toll roads 6.67
income to arrive at the taxable income.

♦ Date of Payment: Any income tax shall be

paid in four installments on or before the 15th Corporate Income Tax
day respectively of August, November, ♦ Tax Rates
February , in the year of assessment and 15th Rate (%)
May of the next year of assessment.. Taxable Income < Rs.5 Mn 20
Taxable Income ≥ Rs.5 Mn(2.5% for HREF) 32.5
Personal Income Tax
Taxable Income > Rs. 5Mn
♦ Tax free threshold – Rs. 300,000 per year (listed Co.s not less than 300 shareholders) 30
(only for residents) w.e.f. 1/4/2004 Exports, Tourism, Construction
and Agriculture(any person) 15
♦ Tax Rates w.e.f (1/4/2004) Specialised Housing Banks 20
Provided Funds, Charities (all) 10
Taxable income Rate Clubs and Associatiares (all) 20
Remittance Tax (N/R.Cos.) (10% of remittance
First Rs. 240,000 10%
out of taxable profit) 10
Next Rs. 240,000 20% On dividends 10
Balance 30% New Venture Capital Companies 5 year tax
holiday (w.e.f.1.4.2003)
♦ Terminal Benefits on Retirement Existing VCC 20
Unit Trusts and Mutual Funds (specified areas) 10
Unit Trusts and Mutual Funds ( Unspecified areas)20
Interest on compensation payable in respect of
Rate
property vested in Government LRC ect. 10
First Rs. 2,000,000 exempt Interest on loans granted by a party outside
Next Rs. 500,000 5% Sri Lanka 15
Next Rs. 500,000 10% Royalty paid out of Sri Lanka 15
Balance 15% On FCBU arising from any on shore 30
effective - 1.4.2004 FCBU transaction (off shore) 20
After tax exemption period for companies
under Sec. 21 A, 21C, 21E 10
♦ Retiring Gratuity After tax exemption period for companies
Sec. 21 B or 21 D 15
• Retiring gratuity in excess of Rs. 1.8 After tax exemption period for companies
million or average salary of last 3 years under Sec. 21 A/C/E and where 10% or
multiplied by number of years of 15% is not applicable 20
service(whichever is more) – Taxed as On qualified export profits 15(Max)
normal income. On deemed exports 15
Emoluments and fees earned in Foreign
• Compensation under approved voluntary currency by an individual or by a partner
retirement schemes or retrenchment – or a partnership 15
exempt.
ƒ Final Withholding Taxes (WHT)
Rate(%)
Any interest, royalties etc paid by a person out
of Sri Lanka to another person out of
Sri Lanka 20
Interest paid in Sri Lanka(on deposits) 10
Interest paid in SL in excess of Rs. 108,000
p.a per deposit (w.e.f.1.1.2003) 10
All dividends (w.e.f.1.4.2002) 10
Interest on specified corporate debt securities 10
On specified fees paid to specified persons 5
On non - residential rent income > Rs. 50,000
p. m or Rs. 500,000 p. a. (1.4.2002) 10
Government rewards (w.e.f. 1.4.2004) 10
Lottery prizes >Rs. 500,000 (w.e.f. 1.4.2004) 10
Treasury Bills at source (w.e.f. 1.4.2002) 10
Interest paid to Charitable Institutions in excess
of Rs.12,000 p.m/Rs.144,000 p.a(1.4.2002) 10
Foreign Entertainers or Artists 15
VALUE ADDED TAX (VAT)
♦ Legislation: Value Added Tax Act No. 14 of
2002, Value Added Tax (Amendment) Act
No. 7 of 2003, Value Added Tax (Amendment)
Act No.13 of 2004.
♦ Implementing Agency : Department of
Inland Revenue.
♦ Date of payment : The due date of the
submission of return and the payment has been
advanced from the last date of the month after
the expiry of each taxable period to 15th day of
the month of the expiry of each taxable period
♦ Effective from – 01.08.2002
♦ VAT Threshold :
(a) Turnover exceeding Rs. 500,000 in
any quarter ending on the month of
March, June, September, December.
(a) Turnover exceeding Rs. 1,800,000
in any four successive quarters.
However, there is no threshold for imports.
♦ Tax Liability :
(a) On taxable supplies of goods or services
made in Sri Lanka
(b) On the importation of goods taxable into
Sri Lanka
♦ Tax Rates
• Zero rate
• Export of goods
• International transportation
• Services directly connected with any
movable or immovable property outside
Sri Lanka
• Exemptions :
Schedule relating to VAT exempted items and
services are attached. (Annexure I)
• Basic rate on following items (w.e.f 05%
19.11.2004.)
Sugar, Dhal, Potatoes, Onions,Dried Fish, Milk
Powder, Chilies
• Standard rate (w.e. f 01.01.2004) 15%
• Luxury Rate on following items (w.e.f
01.01.2005.) 18%
™ Air Conditioning Machines, Refrigerators,
Dish Washing Machines, Washing
Machines, Vacuum Cleaners/ Floor
Polishers, Kitchen Waste Disposers,
Watches/Clocks, Musical Instruments,
Equipment for Games (Casino etc), Food
Grinders & Mixers, Liquor, Ovens &
Cookers, Hair dryers/Hair dressing
Equipments, Video Player (VCD,DVD),
Cameras, Radios, Cassettes & Music
Systems, Televisions, Jewellery, Aerated
Water.
™ Motor Vehicles other than three wheelers,
passenger transport buses, lorries, trucks,
motor bicycles and any other vehicle used
for transport of goods.
™ The supply of services by hotels, guest
houses, restaurants or similar institutions
so far as such services are for wedding
receptions and other receptions other than
seminars and also including the hiring of
halls for such receptions.
• VAT on Financial Sector
Banks & Other specified financial sector
instuitions on the supply of financial
services are liable to financial VAT from
01.01.2003. Any other person who supply
such services also are liable for VAT from
01.07.2003. 10% rate applicable upto
31.12.2003 and 15% rate applies from
01.01.2004.
• Credit for input Tax :
(a) VAT on inputs for zero rated and
taxable goods and services is
refundable.
(b) Input Tax Credit in relation to items at
5% will not be allowed other than the
purchase of vehicles for transport or
machinery for the production.
(c) Input Tax Credit in relation to items at
18% will be restricted to 15%.
♦ Computation of VAT
• On manufacturing : Sale price excluding
VAT component multiplied by the VAT rate.
• On services : Final consumer price excluding
VAT component multiplied by the VAT rate.
• On imports : CIF with the addition of duty,
any surcharge, cess any excise duty, PAL and
5% of CIF (w.e.f. 01.01.05) and multiplied by
the VAT rate.
Annexure I
For any taxable period commencing on or
after January 1, 2005-
(a) The supply or import of –
(i) Paddy, seed paddy, rice, wheat,
cardamom, cinnamon, cloves,
nutmeg, mace, pepper, desiccated
coconuts, rubber, latex, fresh
coconuts, tea including green
leaf, rice flour,
wheat flour, bread, infants’
powdered milk, eggs and liquid
milk (not made out of powdered
milk or any grain);
(ii) Pharmaceutical products and
drugs (other than cosmetics)
including such products and
drugs certified by Cosmetics,
Devices and Drugs Authority,
established by the Cosmetics.
Devices and Drugs Act, No. 27
of 1980, and raw materials for the
production or manufacture of
such products or drugs;
(iii) Ayurvedic preparations which
belongs to the Ayurveda
pharmacopoeia or Ayurveda
preparations (other than cosmetic
preparations) or unani, siddha or
homeopathic preparations (other
than cosmetic preparations) and
raw materials for such
preparations;
(iv) Aircrafts, helicopters and
temporary import of any plant,
machinery or equipment or any
goods to be used as exhibition
materials or as materials, in any
technical demonstration;
(v) Books (other than cheque books,
periodicals, magazines,
newspapers, diaries, ledger books
and exercise books), and unused
postage and revenue stamps of
the Government of the
Democratic Socialist Republic of
Sri Lanka or of a Provincial
Council;
(vi) Crude petroleum oil, kerosene,
aviation fuel and oil for ships;
(vii) Artifical limbs, crutches, wheel
chairs, hearing aids, accessories
for such aids or appliances which
are worn or carried or implanted
in the human body to compensate
for a defect or disability, white
canes for the blind, Braille
typewriters and parts, Braille
writing papers and Braille writing
boards;
(viii) Agricultural tractors;
(ix) Cellular mobile phones;
(x) Agricultural machinery and
fertilizer. (w.e .f. 1.7.2004);
(xi) Agricultural seeds agricultural
plants, shrimp feed inclusive of
prawn feed and animal feed
excluding poultry feed ;
(b) The supply of
(i) Educational services by an
educational establishment or
government schools or schools
funded by the government or
schools registered with the
Ministry of Education that follow
the government curricula and
public library services by the
government, a Provincial Council
or a local authority;
(ii) Public passenger transport
services (other than air transport,
water transport, or transport of
tourists, excursion tours, and taxi
services) or the provision of
leasing facilities for such motor
coaches with seating capacity not
less than twenty eight passenger
seats and used for such public
passenger transport if such lease
agreement entered into prior to
January 1, 2004 and the provision
of leasing facilities for three
wheelers on any lease rental
payable on the leasing facility for
three wheelers on or after January
1, 2005.
(iii) Electricity not exceeding 30 kwh
per consumer as defined under
the Electricity Act (Chapter 205 )
per month; and electricity
through alternate energy projects
other than energy through hydro
power or thermal power;
(iv) Free or subsidized meals by an
employer to his employees at
their places of work and transport
free or at a subsidized rate by an
employer to his employees using
a motor coach between the place
of residence and work place of
such employees;
(v) Services in relation to burials and
cremations by any institution or
person;
(vi) Services by a person in Sri Lanka
to another person outside Sri
Lanka to be consumed or utilized
by such other person outside Sri
Lanka for which the payment is
made in Sri Lanka rupees;
(vii) Services at a restaurant situated
beyond the immigration counter
at the Bandaranayake
International Air Port;
(viii) Goods and services to the
mission of any state or any
organization to which the
provisions of the Diplomatic
Privileges Act, No. 9 of 1996
applies or to any diplomatic
personnel of such mission or
organization who is entitled to
such benefits provided that
reciprocal benefits are available
to their counter parts from Sri
Lanka and identified as such by
the Commissioner General;
(ix) Goods funded directly by foreign
organizations as approved by the
Minister for the relief of sudden
distress caused by natural or
human disasters;
(x) The following financial services -
(a) the operation of any current,
deposit or savings account;
(b) the exchange of currency;
(c) the issue, payment, collection
or transfer of ownership of
any note, order for payment,
cheque or letter of credit;
(d) the issue, allotment, transfer
of ownership, drawing,
acceptance or endorsement
of any dept security, being
any interest in or right to be
paid money owing by any
person;
(e) the issue, allotment or
transfer of ownership of any
equity security, debt security
or participatory security;
(f) the underwriting or sup-
underwriting the issue of any
equity security, debt security
or participatory security;
(g) the provision of any loan,
advance or credit;
(h) the provision -
(a) of the facility of
installment credit
finance in a hire
purchase conditional
sale or credit sale
agreement for which
facility a separate
charge is made and
disclosed to the person
to whom the
supply is made;
(b) of goods under any hire
purchase agreement or
conditional sale
agreement, which have
been used in Sri Lanka
for a period not less than
twelve months as at the
date of such agreement;
(i) the life insurance, “Agrahara”
insurance and crop and livestock
insurance;
(j)the transfer of non-performing
loans of a licensed commercial
bank by way of transfer of such
loans to any other person in
terms of a re-structuring scheme
or other scheme of such bank as
approved by the Central Bank of
Sri Lanka with the concurrence
of the Minister.
(xi) The supply, lease or rent of
residential accommodation other
than the supply, lease or rent of
residential accommodation by an
enterprise which has entered into
an agreement with the Board of
Investment of Sri Lanka, under
section 17 of the Board of
Investment of Sri Lanka Law,
No. 4 of 1978, on or after April
1,2001 and the total cost of the
projects which such agreement
relates is not less than ten million
United States of American
dollars or its equivalent in any
other lease or rental;
(xii) All healthcare services provided
by medical institutions or
professionally qualified persons
 providing such care, other than
the supply of healthcare services
by a medical institution which
has entered in to an agreement
with the Board of Investment of
Sri Lanka under section 17 of the
Board of Investment of Sri Lanka
Law No. 4 of 1978, on or after
April 1, 2001 and the total cost of
the project to which such
agreement relates is not less than
ten million United States of
American dollars.
(c) The import of -
(i) Goods by the mission of any state
or any organization to which the
provisions of the Diplomatic
Privileges Act, No. 9 of 1996
applies, or by any diplomatic
personnel of such mission or
organization, including the
import under a temporary
admission carnet for re-export;
(ii) Any article entitled to duty free
clearance under the Passenger’s
Baggage (Exemptions)
Regulations made under section
107 of the Customs Ordinance, or
any article cleared duty free re-
importation certificate as
provided in Schedule A under the
Customs Ordinance, or any
article cleared ex-bond for use as
ship stores;
(iii) Goods by any organization
approved by the Minister, where
he is satisfied that such good are
gifts from persons or
organizations abroad for the
relief of sudden distress caused
by natural or human disasters or
such goods being medical
machinery, medical equipment or
an ambulance;
(iv) Goods by any person who has
entered into an agreement -
(a) prior to May 16, 1996; or
(b) prior to April 1, 1998 in
respect of a project, the total
cost of which is not less than
Rs. 500 million.
With the Board of Investment
of Sri Lanka under section
17 of the Board of Investment
of Sri Lanka Law No. 4 of
1978, which goods are
prescribed as a project related
article, to be utilized in the
project specified in the
agreement, during -
(i) the project implementation
period of such project as
specified in such agreement; or
(ii) up to the date of completion
of such project, which date shall
not be later than thirty six months
from the date of the last
agreement entered into prior to
the 19th November, 2003.
Whichever is earlier, other than
any article in the negative list
published by the Secretary to the
Treasury for the purpose of this
paragraph.
(v) Goods by any person who has
entered into an agreement with
the Board of Investment of Sri
Lank under section 17 of the
Board of Investment of Sri Lanka
Law No 4 of 1978, which is
prescribed as a project related
article, to be utilised in the
project specified in the
agreement, which project one
completed will be solely in the
business of making exempt
supplies, -
(a) for a period of two years
from August 1, 2002; or
(b) until the completion of the
project as determined by the
Board of Investment of Sri
Lanka.
Whichever is earlier, other than
any article in the negative list
published by the Secretary to the
Treasury for the purpose of this
paragraph;
(vi) Personal items and samples in
relating to business worth not
more than ten thousand rupees
through parcel post or courier;
(vii) A motor vehicle by a disabled
person specially designed for use
by disabled persons approved by
the Minister, on his being
satisfied that such vehicle is for
use specifically by such person;
(viii) Any capital items required for the
purposes of providing training by
any institution providing
vocational training or practical
training approved by the Minister
in charge of the subject of
Tertiary Education and Training
in consultation with the Minister
where the Government has
provided funds or other
assistance to such institution and
the surplus funds of such
 institution are re-invested as to Zero duty – Vegetable Seeds, Petroleum Oil, LP
the maintenance or improvement Gas, pharmaceuticals, Printed books, yarn, sewing
of such institution; thread, fabrics & natural pearls.
(ix) Goods to any project approved
by the Commissioner General, as 2.5% - most consumer needy items, raw materials
having a capital investment of not other than the zero duty items.
less than rupees one hundred 6% - Machinery, infant milk powder
million which are considered as 15% -Intermediate goods, milk powder,
project related capital goods, coconut oil, canned fish and household,
other than the in the negative list electric goods.
published by the Secretary to the 28% - Finished products, Vegetable and fruits
Treasury, during the project (frozen) and vehicles edible oil other than
implementation period which coconut oil.
shall not exceed three years from Specific rates-
the commencement of the
Rice Rs. 9.00 / kg
project, provided that such
Chilies Rs. 30.00 / kg
project makes taxable supplies
Red onion Rs. 5.00 / kg
upon the completion of the
Big onion Rs. 10.00 / kg
project (effective from
Potatoes Rs. 20.00 / kg
01.01.2005)
Sugar Rs. 4.50 / kg
(x) mples of garments for business
Green gram Rs. 5.00 / kg
purposes by garment buying
T/dhal Rs. 5.00 / kg
office in Sri Lanka registered
Cowpea Rs. 5.00 / kg
with the Textile Quota Board so
long as such item is not sold.

(d) import and supply of goods at

duty free shops for payment in Item Rate of Customs Level of Duty
foreign currency”. Duty Waived
Wheat grain 2.5% Full
Wheat flour 15% Full
(e) The supply of locally Masoor ghal 2.5% Full
manufactured goods to duty free Split yellow lentils 2.5% Full
shops for payment in foreign Sugar Rs. 4.50 per Kg. Full
currency. Potatoes Rs. 20.00 per Kg. Rs. 1.50 per Kg.
Chilies Rs. 30.00 per Kg. Rs. 10.00 per Kg
Milk power 15% 6%

Customs Duty
♦ Computation of duty
♦ Legislation: Customs Ordinance No.17 of
1869 as amended from time to time. Duty rate is applied on CIF value or quantity of
♦ Implementing Agency: Department of imports.
Customs. CD= value of CIF X Rate or Customs Duty
♦ Tax Liability: Customs Duty is levied on or
the CIF value of all goods, wares and • CD =Quantity X unit rate of duty
merchandise imported into Sri Lanka.
• Date of Payment : At the point of imports.

Duty Waiver Surcharge

ƒ Legislation : Levies under
Applicable partial/full duty waiver has granted the Customs Ordinance Act No.
approval for waiver of customs duty on the ƒ Implementing Agency: Sri Lanka
following items until further notice. (as at 31 Customs.
December 2004. ƒ Computer of Duty: Amount of
customs duty & surcharge rate.

Date of Payment : At the point of

Customs.
 ƒ Tax Rates
Surcharge Exemption Items :
Cigarettes
< 60 mm in length Rs. 1,640 per 1000 sticks
ƒ Milk powder
60 mm – 67 mm Rs. 3,137 per 1000 sticks
ƒ Potatoes
67 mm – 72 mm Rs. 5,088 per 1000 sticks
ƒ Onions
72 mm – 84 mm Rs. 5,904 per 1000 sticks
ƒ Lentils
>84 mm Rs. 6,150 per 1000 sticks
ƒ Chillies
ƒ Coriarde Pipe tobacco Rs. 250/- per Kg
ƒ Wheat grain Diesel Rs. 2.50 per liter
ƒ Rice Kerosene Rs. 1.25/- per liter
ƒ Sugar Petrol Rs.20/- per liter
ƒ Infant Milk food Motor vehicle
ƒ Cement Petrol cars < 1000cc 30%
ƒ Paper 1000 cc – 1500 cc 40%
ƒ Auto trishaws >1500 cc 60%
ƒ Textiles and Yarn
Diesel cars <1000 cc 95%
> 1500 cc 115%

Turnover Tax Vans <1500 cc 72%

> 1500 cc 89%
♦ Legislation: Turnover Tax Act No. 69 Auto trishaws
of 1981 as amended from time to time. ƒ Petrol
Computation of Duty 4%
♦ Implementing Agency: Department Diesel 14%
of Inland Revenue. Turnover Tax on Motor Cycle > 125cc 15%
wholesale and retail trade is devolved Aerated and mineral water Rs. 6.0 per liter
to the provincial councils. Publications on Horse racing - Rs. 2/- per liter
♦ TT collected by the Department of
Inland Revenue was abolished from Certain – Electrical and Electric goods 10%
12.10.2001.

ƒ Computation of Duty

Excise (Special Provisions) Duty Domestic

Wholesale price excluding Excise (Special
Provisions) Duty multiplied by the Excise
♦ Legislation: Excise (Special (Special Provisions) Duty rate.
Provisions) Act No: 13 of 1989 and
Imports
Amendments Act No. 40 of 1990 and
105% of CIF with all fiscal levies excluding
Act No. 8 of 1994.
Excise (Special Provisions) Duty, multiplied by
♦ Implementing Agency: Excise
the Excise (Special Provisions) Duty rates.
(Special Provisions) unit of
Department of Customs.
♦ Tax liability: On the following Date of payment: Cigarettes &
articles manufactured locally or Petroleum products - monthly Liquor
imported. - quarterly Imports - at the point of
import

Excise (Ordinance) Duty

ƒ Legislation :Excise Ordinance No. 8
of 1912 and subsequent amendments.
ƒ Implementing Agency : Department
of Excise
 ƒ Tax Liability : Spirits (ethyl alcohol) ♦ A concessionary levy at the rate of .25
and Domestically produced liquor. per centum (w.e.f.01.01.2005) on
these articles imported for processing
ƒ Tax Rates:
and re-export.
♦ Exemptions :-
Coconut and processed Arrack - Rs. 366.00 per
proof litre (a) Imports by any diplomatic mission or Any
Country Made Foreign Liquor - Rs. 490.00 per other organization within the province of
proof litre Diplomatic Privileges Act No. 9 of 1996.
Molasses and Palmyrah Arrack - Rs. 366.00 per (b) Imports of diamonds, gems, gold,
proof litre Jewellery and any electronic items or
Malt liquor above 5% in strength - Rs. 43.50 components import for processing and
per litre re-export.
Malt liquor less than 5% in strength
- Rs. 27.50 per litre
Wine - Rs.200 per proof liter Debits Tax
Spirits use for industrial purposes
- Rs. 200/-per liter ♦ Effective from 01.06.2002
♦ Legislation: Debits Tax Act (awaits
parliamentary approval).
Date of Payment : Monthly ♦ Implementing Agency : Department of
Inland Revenue
Luxury Motor Vehicle Tax ♦ Tax Liability : The Debits Tax at the rate
of one tenth of one per Centrum (0.1%)
ƒ Legislation :The motor vehicle levy will be charged on all debits on current
was introduced in Sri Lanka by the account transaction, proceeds realised by
Finance Act No. 16 of 1995 and the enchshment of certificates of deposits
implemented from 1st April 1995. and travellers cheques .
ƒ Implementing Agency : Department of
Motor Traffic
♦ Exemptions
ƒ Tax liability :- Luxury motor vehicles as
classified below liable to a levy which (i) If tax liability of a current account during a
is imposed on an annual depreciation particular month is not more than Rs. 10
over a period of 7 years. (ii) Debits made on tax payments and
Tax Rates loan/interest payments to the government.
(iii) Payments in relation to -
Vehicle Type Capacity Levy in the first year (a) pension fund benefits
(b) settlement of transactions for licensed
Luxury Diesel-exceeding 2500cc 50,000/- produce brokers
Petrol-exceeding 2000cc (c) trading in government securities for
Semi luxury Diesel-2200cc-2500cc primary dealers.
Petrol-1800cc-2000cc 25,000/- (d) Outright and repurchase and reverse
repurchase transactions of government
Semi luxury and corporate debt securities in the
dual purpose Diesel-exceeding 2500cc secondary market.
Excluding 10,000/- (e) Settlement of transactions in the
vans Petrol-exceeding 2000cc Colombo Stock Exchange.
(iv) Debits in relation to:
(a) inter- and intra-bank transactions
(b) collection accounts
(c) any exempt account
Ports and Airports Development Levy (d) dishonored cheques and error
corrections.
♦ Effective from 01.05.2002
♦ Legislation : Finance Act No. 11 of 2002
♦ Implementing Agency : Department of Betting and Gaming Levy
Customs
♦ Tax Liability : A levy at the rate of 1.5 ♦ Legislation : Betting and Gaming Levy
per Centrum (w.e.f.19.11.2004) on CIF Act No. 40 of 1990.
value of imported article. ♦ Implementing Agency : Department of
Inland Revenue.
♦ Tax Liability

Gaming - Rs. 12 million per year

Bookmaking - with live telecast Rs.
500,000 per year
Bookmaking - without live telecast Rs.
10,000 per year
Quarterly payments
Each place of business will be liable to the
above duty
The above rates are effective from 1.4.2002
 Computation formulae for imported goods
Where
v = CIF value in Rupees
c = Cess Levy under Sri Lanka Export Development Act
d = Customs Duty
s = Surcharge
e = Excise (special provisions) Duty (ED)
t = Value Added Tax (VAT)
p = Ports and Airports Development Levy (PAL)
l = Social Responsibility Levy (SRL)
re = Rate of Excise (special provisions) Duty (ED)
rt = Rate of Value Added Tax (VAT)

• Customs duty (d) = (CIF value)* (Customs duty rate)

or
= (quantity) * (unit rate of customs duty)

• Surcharge (s) = (Customs duty)* Surcharge rate

• Cess Levy (c) = (CIF value)* (Cess levy rate)

or
= (quantity)*(unit rate of Cess levy)
or
= (Value of Customs duty)*10%1

• Port and Airports Development Levy (p) = (CIF value)* PAL rate

• Value Added Tax (t) = (v + 5% of v + d + s + c + p + e)*VAT rate

or
= [(v+5%v+d+s+c+p)*(1+ re)]* rt
.................................................
(1-( re * rt))

• Excise (Special Provisions) Duty (e)

= (v+5% of v +d +s +c + p + t)*(ED) rate

or
= [(v+5%v+d+s+c+p)*(1+ rt)]* re
..................................................
(1-( re * rt))

• Social Responsibility Levy (l) = (d + s + e )*SRL rate

1
applicable only to the items with Customs duty equal or more than 45% of the CIF