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SVAT 11002 HOW TO

This however only applies during the project’s implementation period

Anyone that’s registered under section 22(7) of the VAT Act.

In order to qualify your project under this, you need to gain approval from the relevant Government ministry Specific projects are specific or strategic projects you may want to pursue in the country.

Anyone that is registered under VAT and engages in specific projects recognised by the government.

You supply more than 50% of your goods/services to SDP (Special Development Projects) during its implementation period.

You supply over 50% of your stock to people that use your stock to manufacture goods for export.

You buy over 50% of your stock to export.

You can apply as a RIP to qualify for SVAT if:

SVAT 11002 HOW TO

How to qualify as a Registered Identified Purchaser (RIP) Let’s take a look at the qualifying criteria for each type. You need to qualify and register as one of these to be eligible for SVAT. Registered Identified Purchasers (RIP).There are two types of people that can access SVAT: Who is eligible for SVAT?Īs great as SVAT sounds from what we’ve mentioned in the previous section, not everyone can qualify for it. In summary, SVAT is a voucher businessmen can issue during B2B transactions that allows them to bypass paying VAT first and then apply for a painstakingly slow refund from the IRD. Instead, they can issue an SVAT voucher and submit it to the IRD as proof of transaction and eligibility. With this, Mangala and Gihan no longer have to initially pay VAT on B2B transactions and apply for refunds afterwards. This allows businessmen like Mangala and Gihan to issue an SVAT voucher at the point of B2B transactions instead of paying the 15% VAT like they usually would. To combat this issue, the Government introduced SVAT (Simplified Value Added Tax) in 2011. This isn’t great for businessmen and their cash flow, especially when there are 100s or 1000s of transactions like this happening in the real world. Usually, Mangala and Gihan would have to apply for a refund from the IRD and wait weeks, or months for a response. Because of this, Mangala and Gihan are eligible for a refund on the 15% VAT amount they paid on the transaction – this is also basically what SVAT is. It was a B2B transaction (Gihan is selling the construction material he bought from Mangala to other sellers). However, this wasn’t a B2C (business to final consumer) transaction.

This means that both Mangala and Gihan will have to pay 15% VAT on this transaction. Sales of construction material fall under VAT regulations, once they exceed the VAT threshold (the threshold is LKR 120 million top line revenue). Gihan purchases construction material from wholesalers like Mangala and exports it to other countries. The first thing you need to know about SVAT is that it only applies to people who take part in B2B (business-to-business) activities. This sounds a little confusing at first, but the next section should help you understand this better. SVAT is a voucher system that exempts B2B transactions from paying VAT at the point of transaction. The VAT rate in Sri Lanka is currently 15%. VAT (Value Added Tax) is a tax you pay on B2C (business to final consumer) transactions.

Is there a difference between SVAT and VAT? Are there penalties for not submitting SVAT forms?.How to qualify as a Registered Identified Seller (RIS) How to qualify as a Registered Identified Person (RIP)ī. Is there a difference between SVAT and VAT?Ī.In this article, we’ll guide you through the ins and outs of SVAT – and, by the end of it, you should be able to navigate its basics by yourself. This is where Simplebooks can step in to help. But, if you’re a newbie, you may not have all the necessary tools at your disposal. Most folks have advisors or accountants to help them navigate through the clutter.

Let’s face it, Sri Lanka’s VAT and SVAT regulations aren’t the easiest to understand.