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Thursday, 12 December 2013 00:00 - - {{hitsCtrl.values.hits}}
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VAT on wholesale and retail turnover Value Added Tax was imposed on buying and selling with effect from 1 January 2013, where the quarterly turnover exceeds Rs. 500 m. However, an appeal was made for the relief of the VAT embedded in the stocks held as at 31 December 2012 or to permit transitional period (which is allowed under the Act) to sell the stocks as at 31 December 2012 without VAT. Similar concessions of granting relief were made when GST and VAT were introduced on 1 April 1998 and 1 August 2002 respectively. Regrettably this request was not considered and large trading organisations including super markets absorbed this loss with the view to maintaining the prices at the same level. Now two more amendments have been suggested effective 1 January 2014: (a) The threshold of Rs. 500 m per quarter to be reduced to Rs. 250 m per quarter. (b) A subsidiary or an associated company of a group of companies engaged in wholesale and retail trade to be liable for VAT based on the aggregate value of supplies of each company in the group engaged in trade. These steps, I understand, have been taken to counteract the alleged action taken by big traders (including super markets) in splitting their turnover among group companies. It must be admitted that these types of action to avoid tax liability would not have arisen if the Department of Inland Revenue had granted the relief (input of VAT embedded in closing stocks) in 2013. They should have been fair by big traders (including super market) when VAT was introduced on 1 January 2013. In the circumstances, I appeal that this relief be granted on stocks as at 31 December 2013 so that prices will not change in the future with the additional burden on traders. Further in the past BTT, GST, VAT, Stamp Duty, ESC and Income Tax have been computed on individual turnover/income and not on group turnover/income. It is better for the Ministry to have dialogue with trade associations and big traders (including super markets) and grant suitable relief accordingly. In view of fact that the time period of less than a month is only available, early action is welcome. S.R. Balachandran, BSc.FCA, FCMADiscover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.
Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.