Exemption of goods and services under the Value Added Tax Act, No. 14 of 2002 [as last amended by the Value Added Tax (Amendment) Act, No. 32 of 2023]:
(a) The supply or import of:
(i) Wheat and Wheat Flour
(ii) Infant Milk Powder
(iii) Pharmaceutical Products and Drugs (other than cosmetics), prescribed for therapeutic or prophylactic effect and bought with a physician’s prescription, along with raw materials for their production
(iv) Ayurvedic Preparations belonging to the Ayurveda Pharmacopoeia, Ayurvedic Preparations (excluding cosmetic preparations), Unani, Siddha, or Homeopathic Preparations (excluding cosmetic preparations) identified under specific coding systems, recommended by the Commissioner for Ayurveda appointed under the Ayurveda Act, No. 31 of 1961
(v) Crude Petroleum Oil, Kerosene, Aviation Fuel, Oil for Ships, or Fuel Oil specified under Harmonized Commodity Description Number 2710.19.60 for Custom purposes
(vi) Artificial Limbs, Crutches, Wheelchairs, Hearing Aids, related accessories or appliances worn, carried, or implanted in the human body to compensate for a defect or disability, White Canes for the blind, Braille Typewriters, Braille Writing Papers, Braille Writing Boards, and other articles used by disabled persons approved by the Minister based on relief requested by such individuals
(vii) Bio Fertilizer, Anemia Eggs, Peat Moss classified under specific Harmonized Commodity Description and Coding System Numbers for Custom purposes
(viii) Agricultural Seeds, Agricultural Plants, Shrimp Feed (including Prawn Feed) and Animal Feed (excluding Poultry Feed)
(ix) Yarn used for the textile industry identified under specific Harmonized Commodity Description and Coding System Numbers for Custom purposes
(x) Dyes used for the handloom industry identified under specific Harmonized Commodity Description and Coding System Numbers for Custom purposes
(b) The supply of:
(i) Educational Services provided by any person or partnership
(ii) Public passengers transport services (excluding air transport, water transport, tourist transport, excursion tours, and taxi services)
(iii) Electricity including distribution
(iv) Services in relation to burials and cremations by any institution or person
(v) Services at a restaurant situated beyond the immigration counter at the Bandaranaike International Airport
(vi) Goods and services to the mission of any state or organization eligible under the Diplomatic Privileges Act, No. 9 of 1996, or diplomatic personnel of such missions or organizations entitled to benefits (provided reciprocal benefits are available to their counterparts from Sri Lanka and identified as such by the Commissioner General)
(vii) Goods or services funded directly by foreign organizations for relief during natural or human disasters or for activities benefiting the national economy (as approved by the Minister)
(viii) Financial Services including:
– (A) Operation of any current, deposit, or savings account
– (B) Currency exchange
– (C) Issuance, payment collection, or transfer of ownership of notes, orders for payment, cheques, or letters of credit
– (D) Issuance, allotment, transfer of ownership, drawing, acceptance, or endorsement of any debt security or equity security
– (F) Underwriting or sub-underwriting of equity securities, debt securities, or participatory securities
– (G) Provision of loans, advances, or credits
– (I) Provision of installment credit finance, leasing facilities, and insurance services
– (I) Transfer of non-performing loans of a licensed commercial bank approved by the Central Bank of Sri Lanka with the Minister’s concurrence
(ix) All healthcare services excluding hospital room charges
(x) Imported articles subject to the Special Commodity Levy under Act No. 48 of 2007 (conditioned for sale without any processing except adaption)
(xi) Locally Manufactured Handloom Textiles
(xii) Locally manufactured Rice, Rice Flour, and Bread
(xiii) Unprocessed Agricultural, Horticultural, or fishing products produced in Sri Lanka
(xiv) Locally manufactured Surgical Gauze used for surgery
(xv) Fabrics subject to a cess at a specific rate under Harmonized Commodity Description and Coding System Numbers (in lieu of other import taxes specified in Gazette Notification under Sri Lanka Export Development Act, No. 40 of 1979)
(xvi) Services by the Department of Commerce, the Board of Investment of Sri Lanka, or the Sri Lanka Ports Authority provided to exporters or providers of zero-rated services for tax purposes
(xvii) Services provided by a person in Sri Lanka to another person outside Sri Lanka for use outside Sri Lanka and paid in Sri Lanka rupees
(xviii) Services that enhance the quality, character, or value of yarn, fabric, or garment for non-exporters
(xix) Geriatric Services and Child Care Services
(xx) Goods or services for Strategic Development Projects under Act No. 14 of 2008
(xxi) Goods or services for specified projects or infrastructure development projects funded through foreign loans or donations directly to Government Ministries (approved by the Minister based on the recommendation of the respective Government Ministry’s secretary)
(xxii) Goods or services by the Central Bank of Sri Lanka established under Act No. 16 of 2023
(xxiii) Services by public corporations provided on behalf of the Government of Sri Lanka free of charge from Parliament’s funds or arranged Government loans
(xxiv) Locally manufactured goods to Duty Free Shops for payment in foreign currency
(c) The Import of:
(i) Any article entitled to duty-free clearance under the Passenger’s Baggage (exemptions) Regulations per section 107 of the Customs Ordinance (Chapter 235) or any article cleared duty-free through a re-importation certificate in Schedule “A” of the Customs Ordinance (Chapter 235) or any article cleared ex-bond for use as ship stores
(ii) Goods used as exhibition material or material for technical demonstrations, which are re-exported after the project, exhibition, or demonstration’s completion, or Plant, machinery, or equipment imported for projects and re-exported upon project completion, subject to tax deferral under the provisions of subsection (3) of section 2, paragraph (b) of the second proviso
(iii) Aircraft Engines or Aircraft Spare Parts identified under specified Harmonized Commodity Description and Coding System Numbers for Custom purposes
(iv) Chemical Naphtha by the Ceylon Petroleum Corporation supplied to the Ceylon Electricity Board for electricity generation
(v) Goods:
– (A) For specified projects identified by the Minister, on which tax is borne by the Government
– (B) For projects identified as strategic development projects under Act No. 14 of 2008 during the implementation period, subject to specified conditions
– (C) For infrastructure development projects funded through foreign loans or donations directly to any Ministry of the Sri Lankan Government, approved by the Minister based on the respective Ministry secretary’s recommendation
(vi) Goods to a mission of any state or organization eligible under the Diplomatic Privileges Act, No. 9 of 1996, or diplomatic personnel entitled to such benefits, provided reciprocal benefits are available to counterparts from Sri Lanka and identified as such by the Commissioner General
(vii) Goods from foreign organizations or funds from such organizations for relief during natural or human disasters or for activities benefitting the national economy, as approved by the Minister
(d) The import and supply of goods at Duty Free Shops for payment in foreign currency.
