Finance

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Published: 2002

Finance
Finance




AN ACT TO ENACT THE PROVISIONS OF LAW NECESSARY TO GIVE LEGAL FORCE TO CERTAIN BUDGET PROPOSALS AND OTHER MATTERS FOR THE FINANCIAL YEAR COMMENCING ON APRIL 1, 2002 ; AND FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THERE TO








BE it enacted by the Parliament of the Democratic Socialist Republic of Sri Lanka as follows:-



[8th July

, 2002 ]













Short title.



1.This Act may be cited as the Finance Act, No. 11 of 2002



PART I
IMPOSITION OF PORTS AND AIRPORTS DEVELOPMENT LEVY.



Levy on articles imported into Sri Lanka.



2.Subject to the provisions of section 5, there shall be charged and levied on every article originating from outside Sri Lanka and imported into Sri Lanka, a levy to be called the Ports and Airports Development Levy (hereinafter in this Part referred to as the "levy") at the rate of one per centum on the cost, insurance and freight value of that article.



Levy to be paid to the Director-General of Customs.



3.The levy payable under section 2 on an article imported into Sri Lanka, shall be paid by the person importing the article to the Director-General of Customs, at the time of the import of the article, and upon payment of the levy the Director- General of Customs shall cause an endorsement to be made on the import invoice relating to that article specifying the amount recovered as the levy.



Purchase of certain articles deemed to be imported for the purposes of this Act.



4.Where any article originating from outside Sri Lanka and imported into Sri Lanka is sold





(a) by the Director-General of Customs for the recovery of any customs duty, surcharge or other levy payable or deemed to be payable under the Customs Ordinance or for any contravention of the provisions of the Customs Ordinance ;



(b)by the Sri Lanka Ports Authority established by the Sri Lanka Ports Authority Act, No. 51 of 1979, for the recovery of any dues under that Act; or



(c)by the Commissioner-General of Inland Revenue, for any taxes administered by him,



the purchaser of that article shall be deemed for the purposes of section 3 to be the person importing that article and the provisions of this Act shall apply to him accordingly.



Exemptions.



5.Nothing in section 2 shall apply to any article imported into Sri Lanka in respect of the provision of any service by a mission of any State or any organization under the provisions of the Diplomatic Privileges Act, No. 9 of 1996.



Customs Ordinance to apply to the recovery of levy.



6.The levy shall, for purposes of recovery of the levy and not withstanding anything to the contrary in this Act, be deemed to be a customs duty payable under the Customs Ordinance and accordingly, the provisions of the Customs Ordinance shall apply to the recovery of such levy.



Amount recovered as levy to be credited to the Consolidated Fund.



7.The Director-General of Customs shall transmit to the Consolidated Fund, all sums recovered by him under this Part, as the levy.



Interpretation



8.In this Part, unless the context otherwise requires, "article" means any goods, materials, any agricultural or horticultural products or merchandise but does not include diamonds, gems, gold, jewellery and electronic items imported for the purpose of processing and re-export.



Retrospective effect.



9.Part I of this Act shall be deemed, for all purposes, to have come into force on May 1, 2002.



Validation.



10.Where the Director-General of Customs collects during the period commencing on May 1, 2002 and ending on the date of commencement of this Act, from a person importing an article an amount equal to one per centum on the cost, insurance and freight value of such article, such collection shall be deemed for all purposes to have been, and to be, validly made, and the Director-General of Customs is hereby indemnified against all action, civil or criminal, in respect of such collection.



PART II
AMENDMENT TO THE BETTING AND GAMING LEVY
ACT, NO. 40 OF 1988



Amendment of section 3 of Act No. 40 of 1988.



11. Section 3 of the Betting and Gaming Levy Act, No. 40 of 1988 (hereinafter in this Part referred to as the "principal enactment") is hereby amended by the substitution for the words and figure "Where any business of gaming, as is referred to in paragraph (b) of section 2,", of the words and figure "Where any business, as is referred to in subsection (1) of section 2,".



Amendment of section 4 of the principal enactment.



12.Section 4 of the principal enactment is hereby amended as follows :-





(1)in subsection (1) of that section, by the substitution, for the words, "levy under this Act shall pay", of the words and figures "levy under this Act for any year commencing prior to April 1, 2002 shall pay";



(2)by the insertion, immediately after subsection (1) of that section of the following subsection :





"(1A) A person liable to pay the levy under this Act for any year commencing an or after April 1,2002 shall pay the levy to the Commissioner-General in four equal installments on or before the first day respectively, of April, July, October and January of that year. For the purposes of payment of the levy the Commissioner-General may issue an identification number to the person liable to pay the levy :



Provided however, that the levy payable by any person for the year of assessment commencing on April 1, 2002, shall be paid by him in three equal installments on or before the first day respectively, of July, October and January of the year :



Provided further that, a person who commences to carry on any such business as is referred to in section 2 after the first day of April of any such year shall pay the levy he is liable to pay under this Act for that year in such number of installments not exceeding four, and on such dates as the Commissioner - General may consider reasonable, having regard to all the circumstances of the case.";



(3)in subsection (2) of that section, by the substitution, for the word:, and figure "under subsection (1)," of the words and figures "under subsection (1) or (1A)"; and



(4)by the addition at the end of that section, of the following subsection :





"(6) Where any instalment of the levy is in default, the Commissioner-General may issue a certificate containing particulars of the instalment in default and the name of the defaulter to the Inspector-General of Police and the Inspector-General of Police shall on receipt thereof, take such measures as may be necessary to stop the defaulter from carrying on the business of bookmaker or gaming, as the case may be, at the place as shall be specified in such certificate."



Amendment of the Schedule to the principal enactment.



13.The Schedule to the principal enactment is hereby amended as follows :-





(1)in Part 1 of that Schedule



(a) by the substitution for the words and figures "for every year commencing on or after April 1,2001", of the words and figures "for the year commencing on or after April 1,2001 but prior to April 1,2002"; and



(b) by the addition at the end of that Part of the following :
"For every year commencing on or after Aapril1,2002



Where live telecast facilities are used in carrying on the business.........

Five hundred thousand rupees.

Where live telecast facilities are not used in carrying on the business.........

ten thousand rupees." and;





(2) in Part II of that Schedule -



(a) by the substitution for the words and figures "for every year commencing on or after April 1,2001", of the words and figures "for the year commencing on or after April 1,2001 but prior to April 1,2002"; and



(b) by the addition at the end of that Part, of the following:
"For every year commencing on or after Aapril1,2002.........

Twelve million rupees.".





Retrospective effect



14.Part II of this Act, shall be deemed, for all purposes to have come into force on April 1, 2002.



PART III
ABOLITION OF CERTAIN LEVIES OF STAMP DUTY WITH EFFECT FROM MAY 1,2002



Abolition of scamp duty on instruments and documents.



15. No stamp duty shall be imposed or paid under the Stamp Duty Act, No. 43 of 1982 (hereinafter in this Part referred to as the "principal enactment") on any instrument executed or any document presented or filed on or after the date on which the provisions of this Part shall come into force.



Retrospective effect.



16.Part III of this Act shall be deemed, for all purposes, to have come into force on May 1, 2002.



Refund.



17.Where any person, liable to pay the stamp duty under the principal enactment on or after May 1, 2002, pays such stamp duty to the Commissioner-General in respect of may instrument executed or document presented or filed prior to the date of commencement of this Act, such person shall be entitled to a refund of the sum so paid as stamp duty on an application made to the Commissioner-General in that behalf.



Avoidance of doubts.



18. For the avoidance of doubt it is hereby declared that the provisions of this Part shall not derogate from the powers of any Provincial Council to levy to recover any stamp duty on any instrument or document referred to in List I of the Ninth Schedule to the Constitution.



PART IV
AMENDMENT OF THE FINANCE ACT, NO. 11 OF 1963



Repeal of Part VI of Act No. 11 of 1963.



19.Part VI of the Finance Act, No. 11 of 1963 is hereby repealed.



Retrospective effect.



20.Part IV of this Act shall be deemed, for all purposes, to have come into force on April 1, 2002.



PART V
AMENDMENT OF THE NATIONAL SECURITY LEVY
ACT, No. 52 OF 1991



Amendment of section 3 of Act No. 52 of 1991



21.Section 3 of the National Security Levy Act, No. 52 of 1991 (in this Part referred to as the "principal enactment") as last amended by Act, No. 4 of 2001 is hereby further amended in subsection (2) of that section as follows :-





(1)by the repeal, of sub-paragraph (xid) of paragraph (j) of item A of that subsection and the substitution, of the following sub-paragraph therefor





"(xid) client support services provided, on or after April 1, 2001 over the internet or the telephone by an enterprise set up exclusively for the provision of such services to one or more identified clients out side Sri Lanka, for which payment is received in foreign currency, through a bank ;



(2)in paragraph (l) of that subsection by the substitution for the words "for the use of any aircraft.", of the words "for the use of any aircraft "; and



(3)by the addition, at the end of that subsection, of the following :-









"(m) the proceeds from the sale of such percentage of garments as is permitted for sale locally, and where a sum of rupees twenty-five has been paid in respect of each garment, which is manufactured by a person for export, from fabric imported into Sri Lanka;".



Retrospective effect.



22.Part V of this Act shall be deemed, for all purposes, to have come into force on April 1, 2002.



PART VI
AMENDMENT TO THE GOODS AND SERVICES TAX
ACT, No. 34 OF 1996



Amendment of section 2 of Act, No.34 of 1996



23.









(1) Section 2 of the Goods and Services Tax Act No. 34 of 1996 as last amendment Act No. 26 of 2000(hereinafter in this Part referred to as the "principal enactment" ) is hereby further amended in subsection (3) of that section by the substitution for the words from "goods imported into Sri Lanka are dutiable and liable to customs duty" to "Provided however the Director-General of Customs" of the following :-



"goods imported into Sri Lanka are dutiable and liable to customs duty :



Provided however no tax shall be charged on"









(a)any goods which entered into a customs bonded area; or



(b)any fabric imported by any person for the purpose of manufacture of garments for export, who 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 for the manufacture of garments for export under such agreement or on the transfer of such fabric with the approval of the Director- General of Customs or the Board of Investment of Sri Lanka, with or without value addition, to any other person for the purpose of manufacture of garments for export;



(c)any fabric imported by any person, who has registered with the Board of Investment of Sri Lanka as a Trading House, for the purpose of manufacture of garments for export through other garment manufacturers as are approved by the Board of Investment of Sri Lanka and the transfer with the approval of the Director-General of Customs or the Board of Investment of Sri Lanka, of such fabric to such manufacturers for the purposes of manufacture of garments for the export;



(d) any fibre, yarn, gray cloth, finished cloth, chemicals and dyes used for the manufacture of fabric, imported by any fabric manufacture who 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, for the purpose of such manufacture";



Provided further that, the Director-General of Customs".



"(2)In the second proviso to subsection (3) of that section





(a)by the substitution for the words "referred to in subsection (6) of section 22, for a period" of the words "referred to in subsection (6) of section 22 or the purchase of any fabric, manufactured by a person who 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 for the manufacture of fabric, by another person who 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 for the manufacture of garments for export under such agreement and who utilises the fabric so purchased for the manufacture of garments for export or a period";



(b)by the substitution for the words "from the dale of importation" of the words "from the date of importation or purchase";



Amendment of section 7 of the principal enactment



24.Section 7 of the principal enactment as last amended by Act, No. 5 of 2001 is hereby further amended by the repeal of sub-paragraph (ii) of paragraph (d) of that section, and the substitution therefor of the following :-





"(ii) client support services provided, on or after April 1, 2001 over the internet or the telephone by an enterprise set up exclusively for the provision of such services to one or more identified clients outside Sri Lanka, for which payment is received in foreign currency, through a bank ;"



Amendment of section 22 of the principal enactment



25. Section 22 of the principal enactment as last amended by Act no 26 of 2000 is hereby amended as follows :-





(1)in subsection (1) of that section by the substitution for the words "as may be specified in the Act" of the following:





"as may be specified in this Act :



Provided however, the amount of tax, due on the supply of any garments within such percentage as is permitted for sale locally by the Board of Investment of Sri Lanka under any agreement entered into by any manufacturer of garments for export under section 17 of the Board of Investment of Sri Lanka Law, shall be twenty-five rupees for each such garment supplied within Sri Lanka ;



(2)in the proviso to subsection (4) of that section by the repeal of paragraph (c) of that proviso and the substitution therefor of the following:-





"(c) there is in excess of input tax, in any taxable period, in the case of a registered person who has entered into an agreement with the Board of Investment of Sri Lanka and that taxable period, falls within the period referred to in item (xxvii) of the Schedule or with the project implementation period as stipulated in any agreement referred to in item (xxviii) of the Schedule or up to the commencement of commercial activities whichever is earlier; or " ;



(3) by the insertion, immediately after subsection (6) of that section, of the following subsection :-





"(6A) Notwithstanding anything contained in subsection (3) and paragraph (ii) of subsection (5) and item (xxvi) of the Schedule to this Act, credit for input tax shall be allowed in respect of a registered person who is engaged in the business of distribution of power where such power is purchased by the supplier of power from the Ceylon Electricity Board established under the Ceylon Electricity Board Act, No. 17 of 1969.".



Amendment of the Schedule to the principal enactment



26.The Schedule to the principal enactment as last amended by Act, No. 5 of 2001 is hereby further amended by the substitution for sub-paragraph (ii) of paragraph (a) of item (xxviii) of that Schedule of the following :-





"(ii) a period, on or before June 30, 2002 from the appointed date, in the case of any person making only exempt supplies after completion of the project; or".



Retrospective effect.



27.





(1) The amendment made to section 22 of the principal enactment





(a) by section 25(1) of this Act shall be deemed, for all purposes, to have come into force on April 1,2001 ;



(b) by section 25(2) of this Act shall be deemed, for all purposes, to have come into force on April I, 1998,



(2) The amendments made to section 2 and the Schedule to the principal enactment by sections 23 and 26 respectively, of this Act shall be deemed for all purposes to have come into force on April 1, 2002.



Sinhala text to prevail in case of inconsistency.



28. In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.
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