Home / Knowledge / News / Apparel/Garments / Apparel body welcomes Suspended-VAT scheme
Apparel body welcomes Suspended-VAT scheme
May '11
The 'Simplified Suspended-VAT' scheme to be implemented by the Sri Lankan Government aims to achieve the export objectives of a value-added economy, according to Mr. Tuli Cooray, Secretary General, Joint Apparel Association Forum (JAAF).

Addressing the members from the apparel sector at a seminar, Mr. Cooray lauded the Government's decision to introduce a suspended-VAT scheme for local suppliers. He termed the scheme as “one of the most outstanding trade facilitation measures introduced by the Government.”

He said that it is an essential prerequisite for creating value added exports. Any company - irrespective of whether it is an exporter, indirect exporter, or a value-added service provider – if it proves to the satisfaction of the Commissioner General of Inland Revenue that it is exporting more than 51 percent of its turnover, directly or indirectly, then it can procure any local input on a Suspended-VAT basis without paying VAT.

All suppliers who supply to such eligible companies have to register themselves with the Department of Inland Revenue. A supplier can be a purchaser or vice-versa depending on the volume of exports, either direct or indirect.

The importance of the scheme lies in the fact that all export suppliers as well as purchasers are brought under it. Simultaneously, the VAT system removes cash flow burden from both the export industry and the Government. It even minimizes the chances of fraudulent activity concerning supplies to export sector.

The success of suspended- VAT will, however, depend on the ability of the industry to be compliant with the system and the ability of the Department of Inland Revenue (DIR) to effectively monitor.

For the purpose, the DIR is expected to implement electronic documentation in a progressive manner.

Under the current VAT system, exports were zero-rated and hence VAT on input is refunded to the exporters, whose money is blocked for a certain time. The new suspended-VAT system is better as it exempts from paying VAT in the first instance and hence, the question of refund does not arise. It would also save a lot of time and energy.

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Vidhyaa Shankar. S
A Ganapathi Chettiar

'The usage of knits is getting into the boundaries of woven fabrics'

Veronique Lee

‘Sustainable fashion is trending upwards, slowly but surely, as people...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Igor Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search