Government explores other options to re-introduce SGST
The government is withdrawing the special Goods and Services Tax (GST) bill aimed at simplifying the existing tax structure and consolidates several taxes as single tax following the Supreme Court’s decision of requiring a two-thirds majority and referendum to enact it as a law, Finance Ministry sources said.
The Court observed that several clauses of the bill are inconsistent with some of the articles of
the country’s
constitution.
The Special GST consolidates several taxes on liquor, cigarettes, telecommunications, betting and gaming and vehicles. The Attorney General had cleared the draft law.
This legal issue has prompted the Finance Ministry to find an option to re-introduce the SGST and one of the options is to withdraw the tax and allow the previous taxation system with some revisions to relevant taxes to continue, said Joint Secretary of the Inland Revenue Service Executive officers’ Association H. A. L. Udayasiri.
The ministry has convened several special meetings to arrive at a decision and it will also seek the legal opinion of the Attorney General on possible options to re-introduce SGST and devising a new bill with necessary amendments.
The Ministry has made all arrangements to set up a separate revenue collection unit at the Treasury and install the computer system to collect SGST online, he said adding that it has been planned to collect additional revenue of Rs. 50 billion from the new tax by law and changes to the Value Added Tax.
Welcoming the Supreme Court order, Mr. Udayasiri said that this GST taxation is against the established system and procedure of revenue collection
in Sri Lanka.
He noted that the Tax Department is responsible for the collection of 54 per cent of total revenue collection in
Sri Lanka and taking over its responsibilities and functions one by one will create a dangerous precedent.
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