Biz chambers go to court against SVAT removal

Three key Sri Lankan business chambers have challenged a decision by the Inland Revenue Department (IRD) to remove Simplified Value Added Tax (SVAT) for exporters without having a proper refunding mechanism.

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The Free Trade Zone Manufacturers' Association (FTZMA), together with the National Chamber of Commerce of Sri Lanka (NCCSL) and the Sri Lanka Chamber of Small and Medium Industries, has filed a writ application before the Court of Appeal on Tuesday challenging the IRD's decision to commence collecting VAT from October 1 without first operationalising the legally mandated automated refund mechanism.

The petitioners representing exporters, deemed exporters, subcontractors to exporters, service providers in the export supply chain, Small and Medium Enterprises, and the broader business community state that collecting VAT from export-related businesses without a proper functioning refund system and publishing the conditions of the proposed risk-based refund scheme in the Gazette, "is unlawful, unreasonable, and a violation of constitutional rights".