VAT effective from 1 Nov.

Friday, 28 October 2016 00:01 - - {{hitsCtrl.values.hits}}

The Value Added Tax (VAT) and the Nation Building Tax, which were passed in Parliament on Wednesday, will be effective from 1 November, the Finance Ministry said in a statement.

Accordingly, the prevailing 11% VAT will be increased up to 15% from Tuesday. The ceilings of monthly and annual VAT registration for retail and wholesale trading will remain at Rs. 12.5 m or Rs. 50 m respectively, the Finance Ministry said.

The average VAT registration limit will be Rs. 3 m a quarter-year or Rs. 12 m per year.

VAT has been imposed on cigarettes, liquor, telephone services, electrical equipment, perfumes, jewellery and powdered milk. In addition, VAT will also be imposed on consultation fees of doctors and medical specialists (including channel services) and hospital room charges.

According to the new Amendment, the existing 2% Nation Building Tax (NBT) will remain unchanged. However, the turnover limit to charge Nation Building Tax has been changed. The existing limit per quarter Rs. 3.75 m has been reduced to Rs. 3m.

Nation Building Tax will also be applied to telephone services and electricity as well. However, this will not affect the electricity bill.