Sri Lanka reduces VAT on imported fabric to 5%

Earlier, fabric was subject to Rs 100/kg CESS at the time of imports. The Budget 2018 had proposed to impose a 15 per cent VAT on goods. The Value Added Tax Act No 14 of 2002 was amended accordingly, and the new VAT scheme came into effect from August 16, 2018.

“As fabric was also subject to 15 per cent VAT, importers, traders and industrialists engaged in using fabric as raw material for making readymade garments had appealed to the minister of finance to provide them some relief as small-scale traders and industrialists who are not covered under VAT act have the adverse effect,” Sri Lanka’s ministry of finance and mass media said in a press release.

Minister of finance and mass media Mangala Samaraweera took the decision to amend the VAT act further to reduce the VAT on imported fabric to 5 per cent considering the possibility of giving a helping hand to proposed small scale industrialists under the Enterprise Sri Lanka scheme, the release said.

Enterprise Sri Lanka, the subsidised loan scheme by the ministry of finance and mass media, has introduced an interest subsidised loan scheme for medium and small-scale manufacturing industrialists and they can obtain fabric, as raw material at a low cost. (RKS)

Fibre2Fashion News Desk – India