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Home :: Types of Taxes :: Value Added Tax (VAT)

Value Added Tax​

Value Added Tax (VAT) is introduced by the Act No.14 of 2002 and is in force from 1st August, 2002. VAT Act replaced the Goods and Services Tax (GST) which was almost similar tax on the consumption of goods and services.

It is a tax on domestic consumption of goods and services. The goods imported into Sri Lanka and goods and services supplied within the territorial limits of Sri Lanka are the subject matter of this tax. It is a multi-stage tax levied on the incremental Value at every stage in the production and distribution chain of Goods and Services. The tax is borne by the final or the ultimate consumer of Goods or services. It is an indirect tax and the Government will receive at the end, through all the intermediary suppliers in the chain of production and distribution, an amount equal to the amount paid by the final consumer.

There are certain supplies of goods and services exempt from VAT. (As mentioned in the Part II of the First Schedule of VAT Act)​ 



Value Added Tax Act, No 14 of 2002 [Certified on July 26, 2002]
Value Added Tax (Amendment) Act, No 07 of 2003 [Certified on February 27, 2003]
Value Added Tax (Amendment) Act, No 13 of 2004 [Certified on Nvember 18, 2004]
Value Added Tax (Amendment) Act, No 06 of 2005 [Certified on March 30, 2005]
Value Added Tax (Amendment) Act, No 08 of 2006 [Certified on March 31, 2006]
Value Added Tax (Amendment) Act, No 14 of 2007 [Certified on April 12, 2007]
Value Added Tax (Amendment) Act, No 15 of 2008 [Certified on February 29, 2008]
Value Added Tax (Amendment) Act, No 15 of 2009 [Certified on March 31, 2009]
Value Added Tax (Amendment) Act, No 09 of 2011 [Certified on March 31, 2011]
Value Added Tax (Amendment) Act, No 07 of 2012 [Certified on March 30, 2012]
Value Added Tax (Amendment) Act, No 17 of 2013 [Certified on April 24, 2013]
Value Added Tax (Amendment) Act, No 07 of 2014 [Certified on April 24, 2014]
Consolidated Text of the Value Added Tax Act, No. 14 of 2002 [Incorporating Amendments up to 01.01.2014]
Value Added Tax (Amendment) Act, No.11 of 2015 [Certified on 30th October 2015]
Value Added Tax (Amendment) Act, No.20 of 2016 [Certified on 1st November 2016]
Value Added Tax (Amendment) Act, No.25 of 2018 [Certified on 16th of August, 2018]
Value Added Tax (Amendment) Act, No 19 of 2019 [Certified on 31st of October, 2019]
Value Added Tax (Amendment) Act, No 09 of 2021 [Certified on 13th May 2021]
Value Added Tax (Amendment) Act, No 13 of 2022 [Certified on 31st March 2022]
Value Added Tax (Amendment) Act, No 44 of 2022 [Certified on 14th December 2022]
Value Added Tax (Amendment) Act, No 32 of 2023 [Certified on 13th December 2023]
Value Added Tax (Amendment) Act, No 16 of 2024 [Certified on 20 th March 2024]
​Chargeability for Value Added Tax excluding chargeability on Financial Services
  • Manufactures
  • Importers
  • Services providers​
  • ​​Suppliers who supply goods under tender agreement 
  • ​Wholesale and Retail Trade​

Registration Threshold
  • Value of taxable supply of goods or services other than financial services by any person including whole sale and retail trade (with effect from 01.10.2022)​
    • exceeds Rs. 20 million per quarter, exceeds Rs. 80 million per annum
  • Value of supply of financial services by a specified institution or other person​
    • exceeds Rs. 3 million per quarter, exceeds Rs. 12 million per annum
  • Voluntary Registration
    • irrespective of the registration threshold any person who carries on or carries out a taxable supply can make an application for voluntary registration
VAT Rates
  • Zero Rate (0%)
    1. Exports
    2. On Exports of goods or services, supply of services by a hotel, guest house, restaurant or other similar businesses providing similar services, registered with the Sri Lanka Tourism Development Authority, with 60% of the total value of the inputs are sourced from local supplies/sources (from 01.12.2019 to 31.05.2022)
  • Standard Rate
    1. Prior to 01.06.2022 - 8%
    2. From 01.06.2022 to 31.08.2022 - 12%
    3. From 01.09.2022 to 31.12.2023 - 15%
    4. From 01.01.2024 - 18%
  • On Supply of Financial Services
    1. Prior to 01.01.2022 - 15%
    2. From 01.01.2022 - 18%
Registration for VAT

The TIN Certificate should be obtained from Primary Registration Unit and VAT registration could be obtained from the Tax Registration Unit at 2nd Floor of the Inland Revenue Headquarters or from any nearest Regional Office of the Department .

Application should be made through Tax Type Registration Form (TPR_005_E), not later than fifteen days from the date on which became liable for registration.

Documents required for Registration
  • TIN Certificate​
  • Certificate of Business Registration
  • In case of limited liability company
    • Memorandum & Articles of association
    • List of Directors
    • Certificate of incorporation
  • Copies of NIC of the proprietors/Directors of the business​
  • Particulars of sales to prove the turnover & monthly Bank statements to prove cash receipts.
  • Documents to prove that exports were made continuously by such exporters
  • For 22(7) registration - Project Plan
    • a copy of agreement with Board of Investment(if any)
    • deed or rent/lease agreement of property
    • sources of funds to the project to be proved for non BOI projects
    • a list of intended purchases – local & imports
Responsibilities of a Registered person
  • Display the Certificate of Registration at a clearly visible place in the business premises.
  • Issue tax invoices (to other registered persons).
  • Keep accounts for relevant periods.
  • Pay taxes and furnish returns on or before due dates.
  • Inform the Department any change in the following without delay.
    • Name,
    • Business Place,
    • Ownership,
    • Nature of business etc.
VAT Payments

    Any Person or Partnership who supplies goods or Service is required to make the payment for the particular month on or before 20th day of the following month.

Furnishing VAT Returns

Due date :

  • On or before the last day of the month after the expiry of each taxable period (may be monthly or quarterly)


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Last updated: 22-03-2024
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