VAT Bill presented in Parliament

The Value Added Tax (Amendment) Bill was presented to Parliament today by Leader of the House Minister Lakshman Kiriella amidst concerns from Opposition lawmakers that for the second time the Bill may have been presented in an irregular manner

Soon after the Bill was presented, UPFA (Joint Opposition Group) MP Bandula Gunawardene point out that the Bill had been published in the gazette before it got Cabinet approval.

He said that the proper procedure is to get Cabinet approval before it is published in gazette.  “The Bill got Cabinet approval on September 12 but the gazette was issued on September 9,” he said.

State Minister of Finance Lakshman Yapa Abeywardena said that they Ministry had got an opinion from Attorney General on the matter and the report would be given to parliament tomorrow.

Speaker Karu Jayasuriya said that if there is a dispute, the Bill can be challenged in Court. “I will accept the State Minister’s position,” he said.

His is the second time the Bill is being presented to the House. The Supreme Court ruled in early August that the previous Bill presented by the Minister to the House did not signify Cabinet approval, as is the constitutional requirement and hence could not be proceeded with.

The new Bill, approved by the Cabinet on September 12, includes several changes to the Bill previously presented to the House.   In terms of the new bill, VAT will be charged at 15 percent while the threshold of registration for VAT has been reduced from Rs. 3.75 million a quarter or Rs. 15 million a year to Rs. 3 million a quarter or Rs. 12 million a year.

The imposition of VAT applies among others to wholesale and retail trade where the threshold is more than Rs. 50 million a year or Rs. 12.5 million a quarter. The new rate will also be imposed on private health services other than diagnostic tests, dialysis, and OPD services excluding medical consultation, telecommunication services, tobacco products and powdered milk which contain added sugar or other sweetening matter.

(CK)