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Home :: Types of Tax​es :: Nation Building Tax (NBT)
 

Nation Building Tax

Nation Building Tax (NBT) is imposed with effect from 1.2.2009 by the Nation Building Tax Act No. 9 of 2009 as subsequently amended by, Nation Building Tax (Amendment) Act No. 32 of 2009, Nation Building Tax (Amendment) Act No. 10 of 2011, Nation Building Tax (Amendment) Act No. 9 of 2012, Nation Building Tax (Amendment) Act No. 11 of 2013 Nation Building Tax (Amendment) Act No 10. of 2014,Nation Building Tax (Amendment) Act No 12. of 2015 and Nation Building Tax (Amendment) Act No 22. of 2016.​​

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​​Scope of​ liability

NBT is payable by every person (individual, Company, body of persons) or partnership who:

  • Imports any article (other than any excepted article and any article in the personal baggage) into Sri Lanka ; or
  • Carries on the business of manufacturing of any article other than any excepted article; or​
  • Carries on the business of wholesale or retail sales of any article (other than such sale by the manufacturer of that article to whom the NBT provisions are applicable as the manufacture and liable under item (2) above, or
  • Carries on the business of providing a service of any description, including the business of banking or finance, other than any excepted service.
Liable Turnover

Liable turnover has been defined in relation to respective category of persons to whom NBT Act is applicable, as follows:-

  • Arising from the importation of any article means the value of that article ascertained for VAT purposes (under section 6 of the VAT Act) not including the value of excepted article
  • With reference to any manufacturer and to any relevant quarter means the sum receivable whether received or not, from the sale of any article manufactured in Sri Lanka in that quarter , other than any excepted article
  • With reference to any person providing any service, and to any relevant quarter means the sum receivable whether received or not, from the provision of any service in Sri Lanka, other than any excepted service 

    Provided that:
    • Arising from the business of providing any financial service in Sri Lanka, by any person carrying on the business of providing financial services means the value of supply referred to in subsection (2) of section 25A of the Value Added Tax Act, No. 14 of 2002 and the calculation of the value addition attributable to such financial services shall be computed for the payment of tax on the business of financial services by applying the attributable method referred to in subsection (4) read with subsection (5) of section 25C of the Value Added Tax Act, No. 14 of 2002 (with effect from 1.1.2014);
      Please refer the method of calculation for NBT purposes as set out in the Extraordinary Gazette No. 1868/10 of June 23, 2014​ issued under subsection (8) of section 25C of the VAT Act.
      Liable Turnover of such person from services other than financial service (which has not been considered as a supply liable to NBT on finance services) should be subject to NBT under the usual manner referred to in section 3.
    • Arising from the business of real estate and improvement thereon, means the value of that service ascertained for the purpose of Value Added Tax Act under subsection (7) of section 5 of the Value Added Tax Act, No. 14 of 2002 ( with effect from 1.1.2015)
  • With reference to any person carrying on the business of wholesale or retail sale of any article and to any relevant quarter means the sum receivable whether received or not from the sale in that quarter, of any article, other than –
    • Pharmaceuticals;
    • Any article which is subject to the Special Commodity Levy under the provisions of the Special Commodity Levy Act No. 48 of 2007, where such article is sold on or after January 1, 2014, by the importer of such article without any processing except for adaption for sale;
    • Gems or jewelry, if sold on the payment of foreign currency by any person authorized by the Central Bank of Sri Lanka to accept payment in foreign currency;
    • Any printed book;
    • Any article exported;
    • Any article sold to any exporter for export;
    • Fresh milk, green leaf, cinnamon or rubber (latex, crape or sheet rubber) purchased from any manufacturer or producer thereof;
    • Petrol, diesel or kerosene sold in a filling station;
    • Retail sale of any article at duty free shops for payment in foreign currency; and
    • Distribution of LP Gas.
    • Any motor vehicle by an importer of such vehicles which are sold by the importer himself;
    • Cigarettes by an importer of such cigarettes which are sold by the importer himself;
    • Liquor by an importer of such liquor which are sold by the importer himself;

For the purposes of paragraph (2), (3) or (4) above the liable turnover does not include

  • Any bad debts incurred,
  • Any VAT paid (if registered),
  • Any Excise Duty under Excise Duty (special provisions) Act paid other than exercise duty paid at the point of customs.
  • Rebate paid under the Export Development Rebate in relation to any international event as approved by the Minister of Finance.
  • Any turnover from the supply of any goods or services in relation to any international events approved by the Minister of Finance.
Liable Limit (Per Quarter)
  • Rs. 3,000,000   - For any quarter
  • Rs. 25,000,000 - For processing of any locally procured agricultural produce in the preparation for sale​,​
Rates
  • On the liable turnover (other than wholesale or retail trade) - 2%
  • On the liable turnover from the wholesale or retail sales of any article;
    • Three fourth of the liable turnover of any distributor - Nil 
    • One half of the liable turnover from the wholesale or retail
      sale of any article other than any turnover of a distributor - Nil 
    • The balance liable turnover - 2%
Payment of NBT on Self-Assessment Basis

NBT is payable on self-assessment basis in three monthly installments. Each installment is an amount not less than one third of the NBT payable for the quarter. The due dates are as follows.

Installment Payment Date
1st Installment On or before the 20th day of the second month of that relevant quarter
2nd Installment On or before the 20th day of the third month of that relevant quarter
3rd Installment On or before the 20th day of the month immediately succeeding the end of that relevant quarter

Payment should be made to any branch of Bank of Ceylon.

Credit for Tax paid

NBT credit is available only for manufacturers on the purchases made from any other manufacturer who registered for NBT.

Return of NBT

Return of NBT should be furnished on or before 20th day of the following month of the end of that relevant quarter.​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Last updated: 16-03-2017