Social Security Contribution Levy Bill 17 06 2022

THE GAZETTE OF THE DEMOCRATIC
SOCIALIST REPUBLIC OF
SRI LANKA
Part II of June 17, 2022
SUPPLEMENT
(Issued on 21.06.2022)
SOCIAL SECURITY CONTRIBUTION LEVY
BILL
to provide for the imposition and collection of a levy known as the Social
Security Contribution Levy on the liable turnover of every person to whom
this Act applies; and to provide for matters connected therewith or incidental
thereto
Ordered to be published by the Minister of Finance,

Economic Stabilization and National Policies
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Social Security Contribution Levy 1
L.D.-O. 81/2021
AN ACT TO PROVIDE FOR THE IMPOSITION AND COLLECTION OF A LEVY

KNOWN AS THE SOCIAL SECURITY CONTRIBUTION LEVY ON THE LIABLE
TURNOVER OF EVERY PERSON TO WHOM THIS ACT APPLIES; AND TO
PROVIDE FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THERETO.
BE it enacted by the Parliament of the Democratic Socialist

Republic of Sri Lanka as follows:-
1. This Act may be cited as the Social Security Short title

Contribution Levy Act, No. 2022 and shall come into and date of
operation
5 operation on the First day of July 2022.
PART I
IMPOSITION OF SOCIAL SECURITY

CONTRIBUTION LEVY
2. The provisions of this Act shall apply to every person Persons to

whom this
10 (in this Act referred to as a “taxable person”) who -
Act applies
(a) imports any article;
(b) carries on the business of manufacture of any article;
(c) carries on the business of providing a service of

any description; or
15 (d) carries on the business of wholesale or retail sale of

any article including importation and sale of such
article other than a sale by the manufacturer of that
article being a manufacturer to whom the provisions
of paragraph (b) applies.
20 3. (1) A levy known as the “Social Security Contribution Imposition of

Levy” (in this Act referred to as “the levy”) shall, subject to the Social
Security
the provisions of this Act, be charged from every taxable Contribution
person for every quarter (in this Act referred to as the “relevant Levy
2 Social Security Contribution Levy
quarter”) on or after July, 1, 2022 in respect of the liable

turnover, specified in the Second Schedule hereto, at the
rate of 2.5 per centum, in the following manner:-
(a) In case of a taxable person referred to in paragraph

5 (a) of section 2, the levy shall be charged in respect
of the liable turnover of such person arising from
the importation of such article; and
(b) In case of a taxable person referred to in paragraph

(b), (c) or (d) of section 2, the levy shall be charged
10 in respect of the liable turnover of such person.
(2) For the purposes of this Act, “turnover”-
(a) with reference to a taxable person referred to in

paragraph (a) of section 2, arising from the
importation from any article means, the value of
15 that article ascertained for the purpose of the Value
Added Tax under section 6 of the Value Added Tax
Act, No. 14 of 2002, but does not include the value
of any exempted article referred to in Part IA of the
First Schedule;
20 (b) with reference to any taxable person referred to in

paragraph (b) of section 2, and to any relevant
quarter means, the sum receivable whether received
or not, in that quarter, of any article manufactured
and sold in Sri Lanka by such person other than
25 any exempted article referred to in Part IA of the
First Schedule;
(c) with reference to any taxable person referred to in

paragraph (c) of section 2 and to any relevant quarter
means –
(i) the sum receivable whether received or not,

from the supply in Sri Lanka of any financial
services by any person carrying on the business
of supplying any financial services in Sri Lanka
5 but does not include the exempted services
referred to in Part II of the First Schedule;
(ii) the value of any service arising from the

business of real estate and improvement
ascertained under subsection (7) of section 5
10 of the Value Added Tax Act, No. 14 of 2002
for the purpose of the said Act but does not
include the exempted services referred to in
Part II of the First Schedule ; and
(iii) the sum receivable, whether received or not,

15 from the provision of any service in Sri Lanka
other than the services referred to in
subparagraphs (i) and (ii) and any exempted
service referred to in Part II of the First
Schedule; and
20 (d) with reference to any taxable person referred to in

paragraph (d) of section 2 and to any relevant
quarter means the sum receivable, whether received
or not, from the wholesale or retail sale of any article
in Sri Lanka other than any exempted article referred
25 to in Part IB of the First Schedule.
(3) The turnover specified in subsection (2) for the

relevant quarter of any taxable person shall not include –
(a) any bad debt incurred by such person in that quarter:
Provided however, any bad debt recovered in any

30 relevant quarter, shall be included in the turnover of that
relevant quarter; or
(b) any value added tax under the Value Added Tax
Act, No. 14 of 2002 paid for that relevant quarter; or
(c) any rebate paid under the Export Development

Rebate in relation to any international event as
approved by the Minister.
PART II
5 REGISTRATION UNDER THE ACT
4. (1) Every taxable person, other than a taxable person Taxable

persons to be
referred to in paragraph (a) of section 2, who, carries on or
registered
carries out any activity referred to in section 2 (in this Act
referred to as a “taxable activity”) shall be required to be
10 registered under this Act by making an application for such
purpose to the Commissioner-General of Inland Revenue
(in this Act referred to as the “Commissioner-General”) in
the specified form-
(a) not later than fifteen days from the date of operation
15 of this Act, in the case of a taxable person whose
aggregate of the turnover, within the twelve months
period immediately prior to the date of operation
of this Act, exceeded one hundred and twenty
million rupees;
20 (b) not later than fifteen days from the date on which
the aggregate of the turnover for a quarter exceeds
or is likely to exceed thirty million rupees, in the
case of a taxable person to whom paragraph (a)
does not apply.
25 (2) Where the Commissioner-General is of the opinion

that the turnover of any person referred to in subsection (1)
relates to a single isolated transaction, such turnover may be
excluded in calculating the total turnover of such person for
the purpose of registration under this section.
30 (3) The Commissioner-General shall-

(a) upon receipt of an application by any person under

subsection (1); or
(b) where an application has not been received under

subsection (1), but the Commissioner-General is of
5 the opinion, having regard to the nature of the
activities carried on or carried out by such person,
that such person is required to be registered under
this Act,
register such person with effect from such date as the

10 Commissioner-General may determine (in this Act referred
to as a “registered person”).
5. (1) Any registered person may make an application in Cancellation

the specified form to the Commissioner-General to have his of
registration
registration cancelled, at any time after the lapse of a period
15 of twelve months following the date of registration, where-
(a) such registered person has ceased to carry on or

carry out a taxable activity referred to in section 2;
or
(b) the aggregate turnover of such registered person

20 during each immediately preceding four quarters
of the relevant quarter does not exceed hundred
and twenty million rupees.
(2) The Commissioner-General-
(a) shall, on receipt of an application under subsection

25 (1); or
(b) may at any time,
and upon being satisfied with the provisions of paragraphs

(a) and (b) of subsection (1) cancel such registration.
(3) The Commissioner-General may refuse to cancel the

registration of any person, where the Commissioner-General
is not satisfied that the conditions specified in paragraph (a)
or (b) of subsection (1) exist.
5 (4) Where the Commissioner-General cancels the

registration of a taxable person, he shall inform such person
of the date of cancellation of the registration by registered
post or by electronic means.
6. Notwithstanding the cancellation of registration Liability not

affected by
10 under section 5, a taxable person shall be liable for any act cancellation
done or omitted to be done under this Act while he remained of
a registered person under this Act. registration
7. Every registered person shall notify the Commissioner- Registered

taxable
General in writing or by electronic means of any change –
person to
notify certain
(a) of the name, address and place at which any taxable changes
15
activity is carried on or carried out by such person;
(b) of the nature of the taxable activity carried on or

carried out by such person;
(c) of the person authorized to sign returns and other

20 documents in respect of any activity carried on or
carried out by such person; and
(d) of ownership of the taxable activity carried on or

carried out by such person,
not later than fourteen days after the occurrence of such

25 change.
PART III
RETURNS AND INFORMATION
8. (1) Every registered person shall furnish to the Returns and

Commissioner-General a return either in writing or by information
to be
5 electronic means for every quarter on or before the twentieth
furnished
day of the month after the end of each relevant quarter. Every
such return shall be in the form specified by the
Commissioner-General.
(2) Every registered person who furnishes such return

10 under subsection (1) which is not in such form shall be
deemed for the purposes of this Act, not to have furnished a
return as required by subsection (1).
(3) The Assistant Commissioner shall issue a notice to a

person referred to in subsection (2) requiring such person to
15 furnish within fourteen days of receipt of such notice, a return
as specified in subsection (1).
(4) The Assistant Commissioner shall acknowledge

receipt of the return only upon receipt of a proper return as
specified in subsection (1) which shall be considered a valid
20 return for the purposes of this Act.
(5) For the purposes of obtaining full information in

respect of the turnover of any registered person, the Assistant
Commissioner may give notice in writing or by electronic
means to such person requiring him –
25 (a) to produce for examination or transmit to the

Assistant Commissioner, within the period specified
in such notice any books of accounts whether
contained in a manual, mechanical or electronic
format or combination thereof, trade lists, stock
30 lists, registers, invoices, cheques, bank statements,
paying-in-slips, accounts, auditors’ reports or other
documents in his possession as may be specified in
order to verify the entries in such books, documents
and accounts; or
(b) to attend in person or by an authorized

representative at such place and on such date and
at such time as may be specified in the notice for
the purpose of being examined regarding the
5 taxable activity carried on or carried out by that
person.
(6) An Assistant Commissioner may retain in his custody

as long as such retention is necessary for the purpose of this
Act any books of accounts whether contained in a manual,
10 mechanical or electronic format or combination thereof, trade
lists, stock lists, registers, invoices, cheques, bank statements,
paying-in-slips, accounts, auditors’ reports or other
documents in his possession as may be specified in order to
verify the entries in such books, documents or accounts.
15 (7) A return, statement or form purporting to be furnished

under this Act by or on behalf of any registered person shall
for all purposes be deemed to have been furnished by that
person or by his authority, as the case may be, unless the
contrary is proved, and any registered person signing such
20 return, statement or form shall be deemed to be cognizant of
all matters contained therein.
(8) Where any registered person fails to comply with the

provisions of this section or fails to comply with the
requirements of a notice given to such person, the
25 Commissioner-General may –
(a) impose on such person a penalty of a sum not

exceeding fifty thousand rupees; and
(b) give notice in writing or by electronic means to

such person of the imposition of such penalty and
30 require such person –
(i) to pay such penalty; and

(ii) to comply with the requirements of this section

within such period as may be specified in such
notice.
(9) The Commissioner-General may reduce or annul any

5 penalty imposed on any registered person under paragraph
(a) of subsection (8) if such person proves to the satisfaction
of the Commissioner-General that his failure to comply with
the provisions of this section was due to circumstances
beyond his control and that he has subsequently complied
10 with the provisions.
PART IV
ASSESSMENT OF LEVY
9. (1) Where- Power of

Assistant
Commissioner
(a) any registered person who, in the opinion of the to make
15 Assistant Commissioner is chargeable with the levy, assessment
fails to furnish a return for the relevant quarter; or
(b) any registered person, who is chargeable with the

levy, furnishes a return in respect of any relevant
quarter but fails to pay the levy fully or partly for
20 that relevant quarter; or
(c) any registered person requests the Commissioner-

General in writing or by electronic means to make
any alteration or addition to any return furnished
by such person for the relevant quarter,
25 the Assistant Commissioner may assess the amount of the

levy, which such person, in the opinion of the Assistant
Commissioner, ought to have paid for that relevant quarter
and shall, by notice in writing or by electronic means, require
such person to pay such amount forthwith. The amount so
30 assessed in respect of such person for the relevant quarter
shall, be deemed to be the amount of the levy payable by
him for that relevant quarter.
(2) The notice issued under subsection (1) may refer any
penalty imposed under section 18.
(3) Where an assessment is made under subsection (1)

the difference between the amount so assessed and the
5 amount paid by such person as the levy for the relevant
quarter shall be the levy in default for that relevant quarter.
10. (1) Where it appears to the Assistant Commissioner Additional

that a registered person chargeable with the levy has, for the assessments
relevant quarter, paid as levy an amount less than the due
10 amount of the levy payable by him or chargeable from him
for that quarter, the Assistant Commissioner may, assess such
person at the additional amount at which, according to the
opinion of the Assistant Commissioner, the levy ought to
have been paid by such person. The Assistant Commissioner
15 shall give such person a notice of such assessment
accordingly.
(2) Where an assessment is made under subsection (1),

the amount so assessed shall be deemed to be the levy in
default in respect of such person for that relevant quarter
20 and accordingly such person shall, from the date on which
such person ought to have paid the levy for that relevant
quarter, be liable to the penalty in respect to such amount as
specified in section 18.
11. Where the Assistant Commissioner does not accept a Assistant

25 return furnished by any registered person and makes an Commissioner
to state
additional assessment on such person for the relevant quarter reasons
under section 10, the Assistant Commissioner shall
communicate to such person in writing or by electronic
means the reasons therefor.
30 12. Where the Assistant Commissioner is of the opinion Power of the

that a registered person has - Assistant
Commissioner
to determine
(a) sold any article or provided any service for a value the open
less than the open market value of such article or market value
service or for no value; or
(b) entered into a transaction, between two associated

persons, in respect of which the sale of any article
or the provision of any service has been made,
in order to avoid the payment of the levy, the Assistant

5 Commissioner shall, having regard to the circumstances of
such transaction and the time period of the sale of such
article or the provision of such service determine the open
market value of such article or service on which the levy
shall be charged.
10 13. Where the Assistant Commissioner is of the opinion Certain

that any transaction which reduces or would have the effect transactions
and
of reducing the amount of levy payable by any person is dispositions
artificial or fictitious or that any disposition is not in fact to be
given effect to, he may disregard any such transaction or disregarded
15 disposition and the parties to the transaction or disposition
shall be assessable accordingly.
14. The production of any document in writing or by Evidence of

electronic means, under the hand of the Commissioner- returns and
assessments
General purporting to be a copy of or extract from any return
20 or assessment made under this Act shall be admissible in all
courts and shall be sufficient evidence of the original.
15. (1) Where any registered person has furnished a return Limitation of
under section 8 in respect of the relevant quarter for levy in time for
additional
respect of any period, it shall not be lawful for the Assistant assessment
25 Commissioner, to make an additional assessment after the
expiration of three years from the end of the relevant quarter
in respect of which the return is furnished.
(2) Notwithstanding the provisions of subsection (1)

where the Assistant Commissioner is of the opinion that a
30 person has willfully or fraudulently failed to make a full and
true disclosure of all the material facts necessary to determine
the amount of levy payable by him for any relevant quarter,
it shall be lawful for the Assistant Commissioner to make an
additional assessment at any time.
PART V
PAYMENT AND COLLECTION OF THE LEVY
16. Every registered person shall account for levy on an Accounting

accrual basis. basis
5 17. (1) Every registered person shall, notwithstanding Payment of

that no assessment has been made on such person for the the levy
relevant quarter, pay the levy payable by such person on or
before the twentieth day of the immediately succeeding
month of the relevant month of that quarter to the
10 Commissioner-General, in such manner as may be specified
by him.
(2) Any levy not paid as set out in subsection (1) shall be
in default and the registered person by whom such levy is
payable or where any levy is payable by more than one
15 person, each such person shall be deemed to be a defaulter
for the purposes of this Act.
18. (1) Where the payment of any levy is in default, the Penalty for
defaulter shall, in addition to such levy in default pay as default
penalty –
20 (a) a sum equivalent to ten per centum of the amount

in default; and
(b) where the amount in default is not paid before the

last day of the month succeeding the month in which
such levy has begun to be in default, a further sum,
25 equivalent to two per centum of the amount in
default in respect of each period ending on the last
day of each succeeding month or part of such period
during which it is in default:
Provided however, that the total amount payable as

30 penalty under this subsection shall in no case exceed one
hundred per centum of the levy in default and any such
amount may be waived or reduced if the Commissioner-

General is satisfied that by reason of any special
circumstances in which the default occurred waiver or
reduction of such amount would be just and equitable.
5 (2) Where upon the final determination of an appeal under

Part VII, any levy in default to which any sum or sums under
subsection (1) has or have been added is reduced, then such
sum or sums shall be calculated on the levy so reduced.
19. (1) The Director General of Customs shall collect Collection of

10 from every taxable person, the levy chargeable from such the levy by
the Director-
person in respect of every article imported by such person, General of
at the time such article is imported, and shall make an Customs
endorsement on the import invoice relating to such article
specifying the amount so collected.
15 (2) Any amount collected under subsection (1) shall be

deemed to be the levy chargeable in respect of the turnover
arising from the importation of such article and shall be
deemed to have been paid by such person to the
Commissioner-General on the day on which such amount
20 was so collected.
(3) Any amount collectible under subsection (1) shall,

for the purpose of collection and recovery of such amount
and notwithstanding anything to the contrary in this Act, be
deemed to be customs duty chargeable under the Customs
25 Ordinance (Chapter 235) and accordingly, the provisions of
the Customs Ordinance (Chapter 235) shall apply to the
collection and recovery of such amount.
(4) Where any article imported into Sri Lanka is sold –
(a) by the Commissioner-General;
30 (b) by the Director General of Customs for the recovery

of any duty, levy or any charge collectible under
the Customs Ordinance (Chapter 235); or
(c) by the Sri Lanka Ports Authority established by the

Sri Lanka Ports Authority Act, No. 51 of 1979, for
the recovery of any dues collectible under that Act,
the purchaser of such article shall be deemed to be a person

5 referred to in paragraph (a) of section 2, and the provisions
of this Act shall apply to such person accordingly.
20. The turnover arising from any Islamic financial Islamic

financial
transaction shall be subject to levy in a similar manner as
transactions
equivalent in substance to non-Islamic financial transactions.
10 PART VI
APPEALS
21. (1) Any registered person or any person whose Appeals to

registration has been cancelled under this Act may, if he is the
Commissioner-
dissatisfied with any assessment, additional assessment or General
15 penalty, as the case may be, made in respect of him under
this Act, appeal against such assessment, additional
assessment or penalty, as the case may be, to the
Commissioner-General within thirty days after the service
of notice of such assessment, additional assessment or
20 imposition of penalty, as the case may be. Such person shall,
notwithstanding such appeal, pay the levy charged by such
assessment or additional assessment together with any
penalty imposed on him by this Act.
(2) The Commissioner-General, upon being satisfied that,

25 owing to absence from Sri Lanka, sickness or other reasonable
cause, the appellant was prevented from appealing within
the time period specified in subsection (1), shall grant an
extension of time for preferring the appeal.
(3) Every appeal shall be preferred to the Commissioner-

30 General by a petition in writing or by electronic means and
shall state precisely the grounds of such appeal.
(4) The receipt of every appeal shall be acknowledged

within thirty days of its receipt and where so acknowledged,
the date of the letter of acknowledgement shall for the
purpose of this section, be deemed to be the date of receipt
5 of such appeal:
Provided however, if the receipt of any appeal is not

acknowledged as specified in this subsection, such appeal
shall be deemed to have been received by the Commissioner-
General on the day on which it was delivered to the
10 Commissioner-General.
(5) Where the appeal against the assessment has been

made in the absence of a return, the appeal shall be
accompanied by a return with the proof of payment of the
levy and penalty due on such return.
15 (6) Every person preferring an appeal under subsection

(1) shall unless such person has already done so, pay to the
Commissioner-General the amount of the levy payable by
such person on the basis of the return furnished by him for
the relevant quarter together with any penalty thereon
20 accrued up to the date of such notice of assessment, and
shall attach, to the appeal a receipt in proof of such payment:
Provided however, the Commissioner-General, upon

being satisfied that owing to serious financial hardship
suffered by the appellant at or about the time of such notice
25 of assessment or, owing to other reasonable cause the
appellant was prevented from paying such levy and penalty,
may grant an extension of time for the payment of such levy
and penalty thereon accrued up to the date of payment, and
the receipt furnished within such extended time shall, for
30 the purposes of subsections (1), (5) and (6), be deemed to
have been attached to the appeal.
(7) Every appeal which was not made within the period
specified in subsection (1) or does not conform to the
provisions of subsections (3), (5) and (6) shall not be valid.
(8) Upon receipt of a valid appeal, the Commissioner-

General may cause inquiry to be made by an Assistant
Commissioner, other than the Assistant Commissioner who
made such assessment against which the appeal is preferred
5 and if, in the course of such inquiry, an agreement is reached
as to the matters specified in the appeal, the necessary
adjustment of the assessment shall be made.
(9) Where no agreement is reached between the appellant

and the Assistant Commissioner in the manner specified in
10 subsection (8), the Commissioner-General shall fix a time
and place for the hearing of the appeal.
(10) The appellant may attend the hearing of the appeal

in person or by an authorized representative. The
Commissioner-General may, if he thinks fit, from time to
15 time, adjourn the hearing of an appeal for such time and
place as he shall fix. In any case in which an authorized
representative attends on behalf of the appellant, the
Commissioner-General may adjourn the hearing of the appeal
and may, if he considers that the personal attendance of the
20 appellant is necessary for the determination of the appeal,
require that the appellant shall attend in person at the time
and place fixed for the adjourned hearing of the appeal. If
the appellant or his authorized representative fails to attend
at the time and place fixed for the hearing or any adjourned
25 hearing of the appeal, or if the appellant fails to attend in
person when required so to attend by the Commissioner-
General, the Commissioner-General shall dismiss the appeal:
Provided however, if the appellant, within a reasonable

time after the dismissal of an appeal, satisfies the
30 Commissioner-General that he or his authorized
representative was prevented from due attendance at the
hearing or at any adjourned hearing of such appeal by reason
of absence from Sri Lanka, sickness, or other reasonable
cause, the Commissioner-General may vacate the order of
35 dismissal and fix a time and place for the hearing of the
appeal.
(11) The Commissioner-General shall have power to

summon any person, whom he may consider able to give
evidence in respect of the appeal, to attend before him and
examine such person on oath or otherwise. Any person so
5 attending may be allowed by the Commissioner-General any
reasonable expenses necessarily incurred by such person in
so attending.
(12) The Commissioner-General may -
(a) before making his determination on any appeal, if

10 he considers it necessary so to do, require any
person, by notice given in writing or by electronic
means to produce for examination, or to transmit to
the Commissioner-General within the period
specified in such notice, any such deeds, plans,
15 instruments, books of accounts, trade lists, stock
lists, registers, cheques, paying-in-slips, auditors’
reports or other documents in his possession as may
be specified in such notice;
(b) obtain the assistance of a Commissioner, a Senior

20 Deputy Commissioner, a Deputy Commissioner or
an Assistant Commissioner who is familiar with the
issues involved in such hearing of an appeal.
(13) Where the Commissioner-General hears the evidence

of the appellant or of any other person in respect of the
25 appeal, he shall maintain or cause to be maintained a record
of such evidence.
(14) In determining an appeal under this section, the

Commissioner-General may confirm, reduce, increase or
annul the assessment appealed against and shall give notice
30 in writing or by electronic means to the appellant of his
determination on the appeal.
(15) Every appeal preferred under this section, shall be

agreed to or determined by the Commissioner-General,
within a period of two years from the date on which such
appeal is received by the Commissioner- General, unless the
5 agreement or determination of such appeal depends on –
(a) the decision of a competent court on any matter

relating to or connected with or arising from such
appeal and referred to it by the Commissioner-
General or the appellant; or
10 (b) the furnishing of any document or the taking of

any action -
(i) by the appellant, upon being required to do so

by the Commissioner-General or an Assistant
Commissioner by notice given in writing to
15 such appellant (such notice being given not
later than six months prior to the expiry of two
years from the date on which the appeal is
received by the Commissioner-General); or
(ii) by any other person, other than the

20 Commissioner-General or an Assistant
Commissioner.
(16) For the purposes of subsection (15) where an

extension of time has been granted to an appellant for the
payment of the levy, the date of receipt in proof of the
25 payment of levy shall be deemed to be the date of receipt of
such appeal.
(17) Where any appeal is not agreed to or determined

within the period specified in subsection (15), the appeal
shall be deemed to have been allowed and levy charged
30 accordingly.
22. Any person aggrieved by the determination of the Appeals to

the Tax
Commissioner-General under section 21 may appeal against
Appeals
such determination to the Tax Appeals Commission Commission
established under the Tax Appeals Commission Act, No. 23
5 of 2011.
23. Where – Finality of

assessment
(a) no valid appeal to the Commissioner-General has

been preferred under this Part against an assessment
or an additional assessment, such assessment or
10 additional assessment; or
(b) the Commissioner-General has determined the

amount of the levy on appeal, the assessment made,
reduced, increased or confirmed, as the case may
be, on such appeal,
15 shall be treated as final for all purposes of this Act:
Provided however, subject to the limitation of time

specified in section 15, nothing in this section shall prevent
an Assistant Commissioner from making an assessment or
additional assessment for any relevant quarter if it does not
20 involve any matter which has already been determined on
appeal.
PART VII
RECOVERY OF LEVY
24. (1) For the purposes of this Part “levy” includes the Recovery of
levy
25 penalty imposed under this Act.
(2) Whenever the Commissioner-General issues or

submits, as the case may be, a certificate under section 27 or
28 or a notice under section 29, he shall at the same time
issue to the defaulter a notification thereof by personal service
or by registered post or by telegraph or electronic means so

however, the non-receipt of such notification by the defaulter
shall not invalidate proceedings under this section.
25. Any levy in default shall be a first charge on all the Levy to be a
first charge
5 assets of the defaulter:
Provided that, –
(a) such charge shall not extend to or affect any assets

sold by such person to a bona fide purchaser for
value, prior to the seizure of the same in accordance
10 with the provisions of section 27;
(b) as regards immovable property, the levy shall not

rank in priority to any lease or encumbrance created
bona fide for value and registered prior to the date
of the seizure; or
15 (c) as regards movable property, where the levy for the

relevant quarters for more than five years is in
default, the levy for relevant quarters within five
years only to be selected by the Commissioner-
General, shall rank in priority to any lien or
20 encumbrance created bona fide for value prior to
the date of default of such levy.
26. (1) Where any levy is in default, the Commissioner- Notice to

General shall, before proceeding to recover such levy, issue defaulter
a notice in writing or by electronic means to the defaulter
25 stating –
(a) the particulars of such levy; and
(b) that action is being contemplated to recover such

levy.
(2) Where an assessment has been made and the defaulter

30 has not appealed within the specified time period against
the assessment in respect of which such levy is charged, he

may, within thirty days of the date of such notice make any
objection to the Commissioner-General in respect of the
levy so charged and the Commissioner-General shall
5 notwithstanding the provisions of section 34 consider such
objections and give his decision thereon which shall be
final.
27. (1) Where any levy is in default, the Commissioner- Recovery of

levy by
General may issue a certificate to a Divisional Secretary, an
seizure and
10 Assistant Divisional Secretary, a Fiscal, a Deputy Fiscal or a sale
levy collector containing particulars of such levy and the
name and address of the defaulter empowering the officer to
whom such certificate is issued to recover or required to
cause the levy to be recovered from the defaulter named in
15 the certificate by seizure and sale of his movable property.
(2) The seizure referred to in subsection (1) shall be

effected in such manner as the said officer shall deem most
expedient in that behalf and any property so seized shall be
kept for seven days at the costs and charges of the defaulter.
20 If the defaulter fails to pay the said levy in default together
with the costs and charges within the said seven days, the
Divisional Secretary, the Assistant Divisional Secretary, the
Fiscal, the Deputy Fiscal or the levy collector, as the case
may be, shall cause such property to be sold by public
25 auction.
(3) The sum realized by the sale shall be applied –
(i) firstly in payment of the costs and charges of

seizing, keeping and selling the property; and
(ii) secondly in satisfaction of the levy in default,
30 and any balance shall be paid to the defaulter.

(4) Where the Commissioner-General is of the opinion

that recovery of any levy by the means specified in
subsection (2) is impracticable or inexpedient, he may submit
a certificate to the District Court having jurisdiction in the
5 district where the defaulter resides or in which any property
movable or immovable owned by the defaulter is situated,
containing such particulars of levy and the name and address
of the defaulter, and the Court shall thereupon issue a writ of
execution to the Fiscal authorizing and requiring him to
10 seize and sell all or any of the property movable and
immovable of the defaulter or such part thereof as he may
deem necessary for recovery of the levy, and the provisions
of sections 226 to 297 of the Civil Procedure Code shall,
mutatis mutandis, apply to such seizure and sale.
15 (5) For the purposes of this section, “movable property”

shall include plant and machinery whether fixed to a building
or not.
28. (1) Where the Commissioner-General is of the opinion Proceedings

in any case that recovery of levy in default by seizure and for recovery
before a
20 sale is impracticable or inexpedient or where the full amount Magistrate
of the levy in default has not been recovered, he may submit
a certificate containing particulars of such levy and the name
and last known place of business or residence of the defaulter,
to a Magistrate having jurisdiction in the division in which
25 such place of business or residence of the defaulter is situated.
(2) (a) The Magistrate shall thereupon summon such

defaulter before him to show cause as to why further
proceedings for the recovery of the levy should not be taken
against him.
30 (b) If sufficiant cause is shown, the levy in default shall

be deemed to be a fine imposed by a sentence of the
Magistrate on such defaulter for an offence punishable with
fine only or not punishable with imprisonment and the
provisions of subsection (1) of section 291 (except
35 paragraphs (a), (d) and (i) thereof) of the Code of Criminal
Procedure Act, No. 15 of 1979, relating to default of payment

of a fine imposed for such an offence, shall thereupon apply,
and the Magistrate may make any direction which, by the
provisions of that subsection, he could have made at the
5 time of imposing such sentence.
(c) Nothing in subsections (2) to (5) of section 291 of the

Code of Criminal Procedure Act, No. 15 of 1979, shall apply
in any case referred to in this subsection.
(d) In any case referred to in this subsection, the Magistrate

10 may grant time for the payment of the fine in installments.
(3) Nothing in this section shall authorize or require the

Magistrate in any proceeding thereunder to consider,
examine or decide the correctness of any statement in the
certificate of the Commissioner-General or to postpone or
15 defer such proceeding for a period exceeding thirty days, by
reason only of the fact that an appeal is pending against the
assessment in respect of which the levy in default is charged.
(4) The Court may be required bail to be given as a

condition precedent allowing time under subsection (2) for
20 showing cause for the payment of the fine and the provisions
of Chapter XXXIV of the Code of Criminal Procedure Act,
No. 15 of 1979 shall apply where the defaulter is so required
to be given bail.
(5) Where payment of the fine is directed to pay in

25 installments under paragraph (d) of subsection (2) and default
is made in the payment of any one installment, the same
proceedings may be taken as if default had been made in
payment of all the installments then remaining unpaid.
29. (1) Where the levy payable by any person is in default Recovery of
levy out of
30 and it appears to the Commissioner-General to be probable
debts
that any person –
(a) owes or is about to pay money to the defaulter or

his agent;
(b) holds money for or on account of the defaulter or

his agent;
5 (c) holds money for or on account of some other person

for payment to the defaulter or his agent; or
(d) has authority from some other person to pay money

to the defaulter or his agent,
the Commissioner-General may give to such person, a notice

10 in writing or by electronic means, a copy of which shall be
sent by post to the defaulter, requiring him to pay any such
moneys not exceeding the amount of the levy in default to
the officer named in such notice.
(2) The notice shall apply to all such moneys which are
15 in the hands of such person or due from such person at the
date of receipt of such notice, or come into his hands or
become due from him or are about to be paid by him at any
time within a period of three months after the date of such
notice.
20 (3) Any person who has made any payment in pursuance

of this section shall be deemed to have acted under the
authority of the defaulter and of all other persons concerned,
and shall be indemnified in respect of such payment against
all proceedings, civil or criminal, notwithstanding the
25 provisions of any written law, contract or agreement.
(4) Where any person to whom a notice has been given

under subsection (1), is unable to comply therewith owing
to the fact that moneys in question do not come into his
hands or custody or become due from him during the period
30 referred to in subsection (2), he shall within fourteen days of
the expiration thereof give notice in writing to the
Commissioner-General appraising him of the facts.
(5) Where any person to whom a notice has been given

under subsection (1) is unable to comply therewith and has
failed to give notice to the Commissioner-General as required
by subsection (4) or where such person has deducted or could
5 have deducted the levy to which the notice relates or any
part thereof and has not paid over as required by the
Commissioner-General the amount of such levy or part
thereof within fourteen days after the expiration of the period
referred to in subsection (2), such person shall, if he is an
10 individual, be liable or where such person is a company or
body of persons, whether corporate or unincorporated the
secretary, manager or the principal officer of such company
or body be personally liable, for the whole of the levy which
such person has been required to deduct, and such levy may
15 be recovered from such individual, secretary, manager or
other principal officer, as the case may be, by all means
provided for in this Act.
(6) For the purposes of this section, the expression

“defaulter” shall be deemed to include the agent of a person
20 who is in default and the provisions of this section shall
apply in any case where the levy which would have been
payable by any person if he were alive is in default, and for
the purpose of the application of these provisions in any
such case, the expression “defaulter” in subsection (1)
25 means –
(a) the executor or administrator of such deceased

person; or
(b) any person who takes possession of, or intermeddles

with, the property of such deceased person; or
30 (c) any person who has applied or is entitled to apply

to a District Court for the grant or resealing of
probate or letters of administration in respect of the
estate of such deceased person.
30. (1) Where the Commissioner-General is of the opinion Recovery of

levy from
that any person is about to or likely to leave Sri Lanka without
persons
paying the levy due from him, the Commissioner-General leaving Sri
may submit a certificate containing particulars of such levy Lanka
5 and the name of such person to a Magistrate, who shall on
receipt thereof issue a direction to the Inspector-General of
Police to take such measures as may be necessary to prevent
such person from leaving Sri Lanka without paying the levy
or furnishing security to the satisfaction of the
10 Commissioner-General for payment thereof.
(2) The Commissioner-General shall, at the time of

submission of the certificate to the Magistrate, issue to such
person a notification thereof by personal service, or registered
post or telegraph or by electronic means but the non-receipt
15 of any such notification by such person shall not invalidate
proceedings under this section.
(3) The production of a certificate signed by the

Commissioner-General stating that the levy has been paid
or that security has been furnished for the payment of the
20 levy or payment of the levy to an officer in charge of a
police station shall be sufficient authority for allowing such
person to leave Sri Lanka.
(4) Any officer in charge of a police station to whom the

amount of any levy specified in such certificate has been
25 paid shall forthwith pay such amount to the Commissioner-
General.
31. Where the Commissioner-General is of the opinion Use of more

that application of any one of the means of recovery specified than one
means for the
in this Act has failed or is likely to fail to secure payment of recovery of
30 the full amount of levy due from any person, he may proceed levy
to recover any sum remaining unpaid, by any means of
recovery specified in this Act, notwithstanding that an order
has been made by a Magistrate under section 28 and carried
into effect.
32. (1) Where a body corporate has not paid any levy on Recovery of
levy from the
or before the due date as specified in section 17, it shall be
principal
lawful to proceed under all or any of the provisions of this officer and
Act against a manager, director, secretary or any other others
5 principal officer of such body corporate, as if such officer is
responsible for such default unless he proves the contrary to
the satisfaction of the Commissioner-General
notwithstanding anything in any other written law relating
to such body corporate.
10 (2) Where an unincorporated body of persons has not

paid any levy on or before the due date as specified in section
17, it shall be lawful to proceed under all or any of the
provisions of this Act against any partner or office-bearer of
such unincorporated body of persons as if he is responsible
15 for such default unless he proves the contrary to the
satisfaction of the Commissioner-General, notwithstanding
anything in any other written law.
33. The Commissioner-General may, by notice given in Power of

writing or by electronic means to any person, require that Commissioner-
General to
20 person within the period specified in such notice to furnish obtain
any information which the Commissioner-General may information
require for the purpose of recovering any levy due from such for the
recovery of
person or any other person.
levy
34. The Commissioner General shall not commence any Time limit
25 action under sections 27, 28, 29 and 32 of this Act, for the for the
recovery of a
recovery of levy in default where a period of five years has levy in
lapsed from the completion of three months from the end of default
the relevant quarter in which the assessment by which such
levy was charged or levied becomes final and conclusive
30 under section 23.
35. (1) The Commissioner-General may, by writing under Commissioner-

his hand, delegate to any Assistant Commissioner any of the General to
delegate
powers or functions conferred on or assigned to the powers and
Commissioner-General by this Part. functions
(2) Every Assistant Commissioner to whom any power or

function has been delegated under subsection (1) shall
exercise or discharge such power or function subject to the
general or special directions of the Commissioner-General.
5 36. Any registered person who has paid any levy or penalty Levy or
in excess of any amount which he was liable to pay for any penalty paid
in excess to
relevant quarter shall be treated as an advance payment made be treated as
for any quarter succeeding the relevant quarter. an advance
payment
PART VIII
10 LIABILITY OF CERTAIN PERSONS TO PAY LEVY
37. (1) Where any registered person chargeable with the Liability of
levy dies, the executor of such deceased person shall, in executor to
pay levy
respect of all relevant quarters prior to the date of death of
such person, be chargeable with levy which such person
15 would be chargeable if he were alive, and shall be liable to
do all acts, matters and things which such person if he were
alive, would be liable to do under this Act:
Provided that, –
(a) no proceedings shall be instituted against the

20 executor in respect of any act or default of action of
the deceased person;
(b) no assessment or additional assessment in respect

of a period prior to the date of such person’s death
shall be made after three years from the end of the
25 relevant quarter in which the death occurred; and
(c) the liability of the executor under this section shall

be limited to the sum of –
(i) the deceased person’s estate in his possession

or control at the date when notice is given to
him that liability to levy will arise under this

section; and
(ii) any part of the estate which may have passed

to a beneficiary.
5 (2) Where an executor on behalf of the estate of a deceased

person carries on any taxable activity which is a part of such
estate, such executor shall, in respect of such taxable activity,
be chargeable with the levy with which such person would
be chargeable if he were alive.
10 38. (1) Where any taxable activity in respect of which Liability of

levy is payable is carried on or carried out by any person on certain
persons to
behalf of any other person as the agent of such other person, pay levy in
the first mentioned person shall be chargeable with the levy respect of a
in respect of that taxable activity in like manner and to the taxable
activity not
15 like amount as the second mentioned person would be belonging to
chargeable under this Act. them
(2) All the liable turnover of a non-resident person shall

be assessable either directly or in the name of his agent, in or
derived from Sri Lanka, whether such agent has the receipt
20 of such turnover or not, and the levy in terms of this Act so
assessed whether directly or in the name of the agent shall
be recoverable in the manner provided for in this Act, out of
the assets of the non-resident person or from the agent. Where
there are more agents than one, they may be assessed jointly
25 or severally in respect of the liable turnover of the non-
resident person and shall be jointly and severally liable for
levy thereon, in terms of this Act.
39. Where two or more persons act in the capacity as Trustees and
executors
trustees or executors of a deceased person’s estate, they may
30 be charged jointly and severally with the levy with which
they are chargeable in the capacity under this Act and shall
be jointly and severally liable for the payment of such levy.
40. (1) Notwithstanding anything in the Companies Persons liable

Act, No. 7 of 2007, where a company is wound up and where to pay levy
any levy to which that company is liable cannot be recovered, upon
liquidation of
then, every person who was a director of the company at any a company
5 time during the period in respect of which such levy is or dissolution
payable shall be jointly and severally liable for the payment of a body of
of such levy unless such person proves that the default in persons
payment of the levy cannot be attributed to any gross neglect,
malfeasance or breach of duty on his part in relation to the
10 affairs of the company, and the provisions of this Act relating
to collection and recovery of levy shall apply accordingly.
(2) Where a body of persons is dissolved and where any

levy to which that body of persons is liable cannot be
recovered, then, every person who was a partner or an office-
15 bearer of such body of persons at any time during the period
in respect of which such levy is payable shall be jointly and
severally liable for the payment of such levy unless he proves
that the default in payment of the levy cannot be attributed
to any gross neglect, malfeasance or breach of duty on his
20 part in relation to the affairs of such unincorporated body
and the provisions of this Act relating to collection and
recovery of levy shall apply accordingly.
41. Any act or thing required by or under this Act to be Who may act
done by any person shall, if such person is an incapacitated for
25 person, be deemed to be required to be done by the trustee of incapacitated
persons
such incapacitated person.
42. Any act or thing required by or under this Act to be Precedent

done by any person shall, in the case of two or more persons partner to act
in partnership, be deemed to be required to be done by the on behalf of
partnership
30 precedent partner of such partnership:
Provided that, any person to whom a notice has been

given under the provisions of this Act as a precedent partner
of a partnership shall be deemed to be the precedent partner
thereof unless he proves that he is not a partner of such
35 partnership or that some other person in Sri Lanka is the
precedent partner thereof.
43. (1) The secretary, manager, director or other principal Principal

officer of every company or body of persons shall be liable officer to act
on behalf of
to do all such acts, matters or things as are required to be a company
done under the provisions of this Act by such company or or body of
5 body of persons: persons
Provided however, any person to whom a notice has been

given under the provisions of this Act on behalf of a company
or body of persons shall be deemed to be the principal officer
thereof unless he proves that he has no connection with
10 such company or body of persons or that some other person
resident in Sri Lanka is the principal officer thereof.
(2) Where an offence under this Act is committed by a

company or body of persons, every person who at the time
of the commission of the offence was the secretary, manager,
15 director or other principal officer of the company or body of
persons shall be deemed to be guilty of that offence unless
he proves that the offence was committed without his
knowledge and that he exercised all such diligence to prevent
the commission of that offence as he ought to have exercised
20 having regard to the nature of his functions in such capacity.
PART IX
OFFENCES AND PENALTIES
44. Every person who- Offences

relating to
breach of
(a) being a person required to take an oath fails to
secrecy &c.
25 take an oath of secrecy when so required under
section 58;
(b) acts in contravention of the provisions of

section 58; or
(c) aids, abets or incites any other person to act in

30 contravention of any of the provisions of this
Act,
commits an offence under this Act and shall on conviction

after summary trial before a Magistrate be liable to a fine not
exceeding ten thousand rupees or to imprisonment of either
description for a term not exceeding six months or to both
5 such fine and imprisonment.
45. Any person who– Offences

relating to
fraud
(a) gives any false answer whether orally or in
writing or by electronic means to any question
or when requested to furnish information in
10 accordance with the provisions of this Act;
(b) omits from a return made under this Act, any

particulars which he should have included in
such return;
(c) makes any false return or false entry in any

15 return made under this Act;
(d) submits false documents for online

registration, uploading incorrect information
for registration or submitting false documents
under the electronic filing system permitted
20 under the revenue administration and the
management information system,
and thereby evades or attempts to evade levy or assists any

other person to evade or to attempt to evade levy commits
an offence under this Act, and shall be liable, after summary
25 trial before a Magistrate, to a fine consisting of–
(i) a sum equal to twice the amount of levy so evaded

or attempted to be evaded for which he is liable
under this Act for the relevant quarter in respect of
which the offence was committed; and
(ii) a sum not exceeding twenty five thousand rupees

or to imprisonment of either description for a term
not exceeding six months or to both such fine and
imprisonment.
5 46. Every person who – Offences

relating to
returns &c.
(a) fails to apply for registration as required
under section 9;
(b) fails to notify the Commissioner-General of

any matters required to be notified under
10 section 7;
(c) fails to furnish a return under section 8;
(d) having appeared before an officer of the

Department of Inland Revenue in compliance
with a notice issued to him under section 14
15 fails, without sufficient cause, to answer any
question lawfully put to him by an officer
acting under this Act;
(e) gives any incorrect information relating to

any matter or thing affecting his own liability
20 to levy or the liability of any other person;
(f) pays the amount under section 29 to any other

person other than the officer named in the
notice;
(g) wilfully obstructs or delays the

25 Commissioner-General or any other officer
in the exercise of his power under section 51
or 52; or
(h) fails to maintain records as required under

section 53,
commits an offence under this Act, and shall on conviction

after summary trial before a Magistrate, be liable to a fine
not exceeding twenty five thousand rupees, or to
imprisonment of either description for a term not exceeding
5 six months or both such fine and imprisonment.
47. No prosecution in respect of an offence under this Prosecution

to be with the
Part shall be commenced except at the instance, or with the sanction of
sanction of the Commissioner-General. the
Commissioner-
General
48. The Commissioner-General may with the consent Compounding
10 of the parties and having regard to the circumstances in of offences
which any offence under this Act was committed, compound
such offence for a sum not exceeding one third of the
maximum fine imposed for that offence under this Act. Any
sum received by the Commissioner-General in compounding
15 an offence under this section shall be credited to the
Consolidated Fund.
PART X
MISCELLANEOUS
49. (1) Every notice to be given by the Commissioner- Signature

20 General, a Deputy Commissioner-General, Senior and service
of notice
Commissioner, Commissioner, Senior Deputy
Commissioner, Deputy Commissioner or an Assistant
Commissioner under this Act shall bear the name of the
Commissioner-General, the Deputy Commissioner-General,
25 Senior Commissioner, Commissioner, Senior Deputy
Commissioner, Deputy Commissioner or an Assistant
Commissioner, as the case may be, and every such notice
shall be valid if the name of the Commissioner-General, the
Deputy Commissioner-General, the Senior Commissioner,
30 the Commissioner, the Senior Deputy Commissioner, the
Deputy Commissioner or the Assistant Commissioner is duly
printed or signed thereon.
(2) Every notice given by virtue of this Act may be served

on a person either personally, by electronic means delivered
at, or sent by post to, his last known place of abode or any
place at which he is, or during the period to which the notice
5 relates, was carrying on or carrying out a taxable activity.
(3) Any notice sent by post shall be deemed to have been

served on the day on which it could have been received in
the ordinary course of post.
(4) In proving service by post it shall be sufficient to

10 prove that the letter containing the notice was duly addressed
and posted.
50. (1) Any notice, assessment, certificate or other Validity of

proceeding under this Act shall not be quashed, or deemed assessments
to be void or voidable, for want of form, or be affected by
15 reason of a mistake, defect or omission therein, if the same is
in substance and effect in conformity with, the intent and
meaning of this Act, and if the person assessed or intended
to be assessed or affected thereby is designated therein
according to common intent and understanding.
20 (2) Without prejudice to the generality of subsection (1)

an assessment shall not be affected or impugned by reason
of–
(a) a mistake therein as to the name or surname of

person chargeable, the amount of the value of the
25 liable turnover or the amount of the levy charged;
or
(b) any variance between the assessment and the notice

therefor,
if notice of such assessment is duly served on the person

30 intended to be charged and contains in substance and effect
the particulars set out in paragraph (a) of this subsection.
51. (1) Any officer of the Department who is specially Power to

authorized by the Commissioner-General in that behalf may, search
buildings or
accompanied by a peace officer, where necessary, do all or places
any of the following acts:-
5 (a) enter and search any building or place where he has

reason to believe that any books of accounts,
registers, records or other documents, which in his
opinion will be useful for or relevant to any
proceeding under this Act may be found, and
10 examine them if found;
(b) seize any such books of accounts, registers, records

or other documents or place marks of identification
thereon or make extracts or copies therefrom; and
(c) make a note or an inventory of any other thing

15 found in the course of any search under this section
which in his opinion will be useful for, or relevant
to, any proceedings under this Act, and the
provisions of the Code of Criminal Procedure Act,
No.15 of 1979, relating to searches shall apply, so
20 far as may be, to searches under this section.
(2) In this subsection “peace officer” shall have the same

meaning as in the Code of Criminal Procedure Act, No. 15 of
1979.
(3) Before authorizing any officer to exercise the powers

25 under subsection (1), the Commissioner-General shall record
the circumstances which necessitate the exercise of such
powers by such officer.
(4) Where any officer authorized by the Commissioner-

General under subsection (1) takes into his possession any
30 book of accounts, register, record or other document from
any person, such officer shall issue to such person a
memorandum specifying the book, register, record or other
document he has taken into his possession.
(5) Any book of account, register, record or other document

taken into his possession under subsection (1) by any officer
may be retained in the possession of such officer as long as
may be necessary for a scrutiny of such book, register, record
5 or other document or for the institution of legal proceedings
against the person to whom such book, register, record or
other document belongs.
52. (1) The Commissioner-General or any other officer Power to

of the Department who is specially authorized in that behalf search where
taxable
10 by the Commissioner-General in writing may do all or any activity is
of the following acts:- carried on or
carried out
(a) enter and inspect any place or building where any
taxable activity is carried on or carried out by any
person for the purpose of ascertaining whether the
15 provisions of this Act are being complied with;
(b) open and examine any book of account, register,

record or any other document which may be found
therein and make an inventory of any of the articles
found therein;
20 (c) examine and take copies of, or make extracts from,

any book of account, register, record or other
document found in such place or building;
(d) take possession of any book of account, register,

record or other document or place marks of
25 identification thereon;
(e) count and make a record immediately of the cash

found in such place or building;
(f) require any person whom he finds in such place or

building to give such information within his
30 knowledge with respect to matters under this Act;
and
(g) examine, either alone or in the presence of any other

person, as he thinks fit, with respect to matters under
this Act, every person whom he finds in such place
or building.
5 (2) Where an officer authorized by the Commissioner-

General under subsection (1) takes into his possession any
book of account, register, record or other document from
any person, such officer shall issue to that person a
memorandum specifying the book, register, record or
10 document he has taken into his possession.
(3) Any book of account, register, record or other document

taken into his possession under subsection (1), by any officer
may be retained in the possession of such officer for a period
not exceeding three years from the date of taking such
15 possession for the purposes of scrutinizing such book,
register, record or document or for the institution of legal
proceedings against the person to whom such book, register,
record or other documents belongs:
Provided however, where the Commissioner-General has

20 instituted action in case of wilful evasion under sections 45
or 46, as the case may be, such book, register, record or
document may be retained as long as it is required for the
purposes of such prosecution.
53. (1) Every registered person shall keep and maintain Keeping of
25 records in respect of the taxable activity carried on or carried records
out by such person to enable the Commissioner-General or
any other officer authorized by the Commissioner-General
in that behalf to ascertain the liability for the payment of the
levy.
30 (2) The form of the records to be maintained under

subsection (1) and the particulars to be submitted therein
shall be specified by the Commissioner-General.
(3) For the purpose of this section “records” includes-
(a) books of accounts, (whether contained in a

manual, mechanical or electronic format or
combination thereof) recording receipts of
5 payments, income or expenditure, and also
includes vouchers, bank statements, invoice,
tax invoices, tax credit notes, tax debit notes,
receipts and such other documents as are
necessary to verify the entries in any such
10 books of account;
(b) details of any warehouse, go-down or any other

place where stock of goods are kept and the
stock of goods kept in such warehouses, go-
down, or any other place, as the case may be;
15 and
(c) any list or record required to be maintained or

kept in accordance with the provisions of this
Act or under any regulations made thereunder.
PART XI
20 ADMINSTRATION PROVISIONS
54. (1) The Commissioner-General shall be in charge The

of the administration of this Act, assisted by such number of Administration
of the Act
Deputy Commissioner-Generals, Senior Commissioners,
Commissioners, Senior Deputy Commissioners, Deputy
25 Commissioners and Assistant Commissioners of the Inland
Revenue Department (in this Act referred to as the
“Department”) as may be necessary for the purpose of giving
effect to the provisions of this Act.
(2) (a) The Commissioner-General may authorize any

30 Deputy Commissioner General, Senior Commissioner,
Commissioner, Senior Deputy Commissioner, Deputy
Commissioner or Assistant Commissioner of the Department
to exercise, perform or discharge any power, duty or function

which is conferred or imposed on, or assigned to the
Commissioner-General by this Act.
(b) A Deputy Commissioner-General, Senior

5 Commissioner, Commissioner, Senior Deputy
Commissioner, Deputy Commissioner or Assistant
Commissioner of the Department exercising, performing or
discharging any power, duty or function conferred or
imposed on, or assigned to the Commissioner-General by
10 any provision of this Act shall be deemed for all purposes to
be authorized to exercise, perform or discharge that power,
duty or function, until the contrary is proved.
(3) A Commissioner or a Senior Deputy Commissioner of

the Department may exercise, perform or discharge any
15 power, duty or function conferred or imposed on, or assigned
to, an Assistant Commissioner by any provision of this Act.
55. The Commissioner-General may, from time to time, Forms

specify the forms to be used for the purposes of this Act, and
any form so specified may, from time to time, be amended
20 by the Commissioner-General.
56. For the purposes of this Act, the Minister may, on Use of
the recommendation of the Commissioner- General make electronic
communications
regulations authorizing or facilitating the use of data
messages, electronic records, electronic documents or
25 electronic communications for matters specified in section
8 of the Electronic Transactions Act, No. 19 of 2006.
57. The Commissioner-General may pay, from sums Commissioner

appropriated for that purpose by Parliament, such sums of General may
pay rewards
money as he considers reasonable in the circumstances of to informants
30 the case, to any individual who provides information which
results in the assessment of the levy payable and paid by
any other person.
58. (1) Every person having a duty under this Act or Official
being employed in the administration of this Act, shall regard secrecy
as secret and confidential all information received in an
official capacity in relation to a taxable person, and may
5 disclose that information only to the following persons:-
(a) the employees of the Department and of the

Department of Customs in the course, and for the
purpose, of carrying out their duties;
(b) the Minister assigned the subject of Finance in the

10 course, and for the purpose of carrying out the
supervision of the Department;
(c) the Auditor-General or any officer of the Auditor

General’s Department authorized by the Auditor-
General, only when such disclosure is necessary for
15 the purposes of official duties;
(d) any tax authority of a foreign country, in accordance

with an international agreement entered into with a
specific authority;
(e) the Attorney-General for the purpose of any

20 criminal or civil proceeding where actions are
instituted by the State or actions filed against the
State or where the opinion or advice of the
Attorney-General has been sought in writing by
the Department;
25 (f) a Court, in a proceeding to establish the tax liability

or responsibility of a registered person in respect of
an offence;
(g) the Land Reform Commission, only when such

disclosure is necessary for the purposes of official
30 duties;
(h) the Head of the Department of Foreign Exchange

for the purpose of prosecuting for violations of the
Foreign Exchange Act, No.12 of 2017;
(i) a Commission of Inquiry appointed under the

5 Commissions of Inquiry Act, No.17 of 1948 in an
investigation into the affairs of any person or the
spouse or child of such person; and
(j) the Commission to Investigate Allegations of

Bribery or Corruption established under the
10 Commission to Investigate Allegations of Bribery
or Corruption Act, No.19 of 1994.
(2) A person who receives information under subsection

(1) shall maintain secrecy of such information except to the
minimum extent that any disclosure under this Act is
15 permitted.
(3) The obligation as to secrecy imposed by this section

shall continue to apply in respect of any person
notwithstanding that such person ceases to be appointed
under or employed in carrying out the provisions of this
20 Act.
PART XII
GENERAL
59. (1) The Minister may make regulations in respect Regulations

of matters required by this Act to be prescribed or in respect
25 of matters authorised by this Act to be made.
(2) Every regulation made by the Minister shall come

into operation on the date of its publication in the Gazette
or on such date as may be specified in the regulation.
(3) Every regulation shall within three months after its

30 publication in the Gazette, be brought before Parliament for
approval. Any such regulation which is not so approved

shall be deemed to be rescinded as from the date of
disapproval but without prejudice to anything previously
done thereunder. A notification of the date on which a
5 regulation is deemed to be rescinded shall be published in
the Gazette.
60. In this Act, unless the context otherwise Interpretation

requires–
“article” includes any goods, material or any agricultural

10 or horticultural produce;
“Assistant Commissioner” means an Assistant

Commissioner of Inland Revenue appointed under
section 97 of the Inland Revenue Act, No. 24 of 2017
and includes Deputy Commissioner;
15 “authorised representative” shall have the same meaning

as in the Inland Revenue Act, No. 24 of 2017;
“body of persons” shall have the same meaning as in the

Inland Revenue Act, No. 24 of 2017;
“business” includes trade, profession or vocation;
20 “Commissioner-General” shall have the same meaning

as in the Inland Revenue Act, No. 24 of 2017;
“Deputy Commissioner” means the Deputy Commissioner

of Inland Revenue appointed under section 97 of the
Inland Revenue Act, No. 24 of 2017;
25 “Freight Forwarder” shall have the same meaning as in

the Licensing of Shipping Agents, Freight
Forwarders, Non Vessel Operating Common Carriers
and Container Operators Act, No.10 of 1972;
“importation” excludes bringing any article in the

personal baggage of the passenger into Sri Lanka
[“baggage” shall have the same meaning as in section
107A of the Customs Ordinance (Chapter 235)];
5 “manufacture” means any process for–
(a) making an article;
(b) assembling or joining any article whether by

chemical process or otherwise;
(c) adapting for sale any article; and
10 (d) packaging, bottling, putting into boxes, cutting

into pieces, cleaning, polishing, wrapping,
labeling, or in any other way whatsoever
preparing for sale any article otherwise than in
a retail store for the purpose of sale in such
15 store exclusively and directly to the consumer;
“Minister” means the Minister assigned the subject of

Finance under Article 44 or 45 of the Constitution;
“non-resident persons” means persons who are not

resident persons under section 69 of the Inland
20 Revenue Act, No. 24 of 2017;
“open market value” in relation to any sale of article or

provision of service at any date, means, the
consideration in money which a similar sale or
provision would generally fetch if sold or provided in
25 similar circumstances at that date in Sri Lanka, being
a sale or provision freely offered and made between
persons who are not associated persons;
“partnership” shall have the same meaning as in the Inland

Revenue Act, No. 24 of 2017;
“person” shall have the same meaning as in the Inland

Revenue Act, No. 24 of 2017;
“quarter” means the period of three months commencing

on the first day of January, April, July or October of
5 any year;
“registered distributor” in relation to any manufacturer

or producer of any goods in Sri Lanka means any
person or partnership appointed by such manufacturer
or producer for the sale in the wholesale market, of
10 such goods, at such price as may be determined by
such manufacturer or producer, from time to time;
“service” includes any business of real estate and

improvement thereon; and
“supply of financial services” shall have the same meaning

15 assigned to such expression under section 25F of the
Value Added Tax Act, No.14 of 2002.
61. In the event of any inconsistency between the Sinhala text

Sinhala and Tamil texts of this Act, the Sinhala text shall to prevail in
case of
prevail. inconsistency
FIRST SCHEDULE
[Section 3(2)(a) and (b)]
PART IA
EXEMPTED ARTICLES
1. Any article exported by the manufacturer;
2. Any article not being a plant, machinery or fixture imported

by any person exclusively for the use in, or for, the manufacture
of any article for export;
3. Any article sold by a taxable person to any exporter, if the

Commissioner-General is satisfied on the production of any
documentary evidence that such article or any other article
manufactured, of which such article is a constituent part, has in
fact been exported from Sri Lanka by such exporter directly
or through a trading house established for export purposes;
4. Any article which is imported, is proved to the satisfaction of

the Commissioner- General, that such article is imported to Sri
Lanka for–
(a) the display at an exhibition;
(b) the temporary use in Sri Lanka in any project approved

by the Minister;
(c) the purposes of repairs to that article to be carried out in

Sri Lanka;
(d) any other similar purpose, and is to be re-shipped, within

a period of one year from the date of importation of such
article to Sri Lanka or within a period of ninety days after
the completion of such project; or
(e) producing any cinematographic film or teledrama in Sri

Lanka and taking out of Sri Lanka for further processing
or printing with the approval of the National Film
Corporation;
5. Any article imported, if proved to the satisfaction of the

Director-General of Customs, that such article was, prior to its
importation, taken out of Sri Lanka for repairs;
6. Any spare part imported by any airline or shipping company,

if proved to the satisfaction of the Commissioner-General, that
such spare part is to be used for the maintenance of any aircraft
or ship, used in international traffic and owned or chartered by
such airline or shipping company;
7. Any article sold, to the United Nations Organization or to any

specialized agency of such organization or to the diplomatic
mission of any foreign Government or to any member of the
diplomatic staff of such mission or to any other person approved
by the Minister on the recommendation of the Minister of
Foreign Affairs as being of the status of a diplomatic mission;
8. Any article imported if such article is subject to the Special

Commodity Levy charged under the Special Commodity Levy
Act, No. 48 of 2007;
9. Fertilizer;
10. Petroleum and petroleum products other than lubricants

classified under Harmonized Commodity Description and
Coding Numbers for customs purpose;
11. L.P. Gas;
12. Pharmaceuticals identified under the Harmonized of

Commodity Description and Coding System;
13. Tea supplied by the Manufacturer being a manufacturer

registered with the Sri Lanka Tea Board established by the Sri
Lanka Tea Board Law, No. 14 of 1975, to any registered
broker for sale at the Colombo Tea Auctions;
14. Any article for the use in any project approved by the relevant
Minister and by the Minister in charge of the subject of Finance
taking into consideration the economic benefit to the country
and where the tax in respect of such project is borne by the
Government;
15. Bitumen classified under HS code No. 2714;
16. Raw materials or packing materials imported for the

manufacture of pharmaceuticals subject to the approval of the
relevant authority;
17. Plant, machinery or equipment imported on temporary basis

for the use of large-scale infrastructure development projects
approved by the Minister in charge of the subject of Finance as
being of beneficial for the economic development of Sri Lanka,
on condition that goods will be re-exported after the completion
of work;
18. Foreign currency notes imported, being notes classified under

HS Codes 4907.00.90;
19. Raw materials or packing materials imported for the

manufacture of ayurvedic preparations which belong to the
Ayurveda Pharmacopoeia or ayurveda preparation subject to
the approval of the relevant authority;
20. Pure-bred breeding animals under HS 0102.10 or

HS 0104.20.10, milking machines under HS 8434.10, dairy
machinery under HS 8434. 20 and spare parts under HS
8434.90, at the point of importation;
21. Solar panel modules, accessories or solar home systems for the
generation of solar power energy classified under Harmonized
Commodity Description and Coding Numbers for custom
purposes at the point of importation;
22. Coal;
23. Any article manufactured by a company identified as a Strategic

Development Project in terms of subsection (4) of section 3 of
the Strategic Development Project Act, No. 14 of 2008 sold to
another Strategic Development Project or to a specialized project
approved by the Minister of Finance or to a company registered
with Board of Investment of Sri Lanka established under the
Board of Investment Law, No. 4 of 1978, so far as such articles
are considered as import replacement and supplied during the
project implementation period; and
24. Any machinery or equipment imported or purchased locally

for the purpose of generating electricity by the Ceylon
Electricity Board established under the Ceylon Electricity Board
Act, No. 17 of 1969 or any institution which has entered into
an agreement with the Ceylon Electricity Board to supply
electricity, being machinery or equipment classified under
Harmonized Commodity Description Coding Numbers for
customs purposes and approved by the Minister of Finance.
PART IB
[Section 3(2)(d)]
EXEMPTED ARTICLES
1. Pharmaceuticals;
2. Any article which is subject to the Special Commodity Levy

under the provisions of the Special Commodity Levy Act, No.
48 of 2007, where such article is sold by the importer of such
article without any processing except for adaption for sale;
3. any article exported;
4. petrol, diesel or kerosene sold in a filling station;
5. L.P. Gas; and
6. fresh milk, green leaf, cinnamon or rubber (latex, crepe or

sheet rubber) purchased from any local manufacturer or local
producer.
PART II
EXEMPTED SERVICES
1. Generation of electricity and supply of electricity other than

the supply of electricity by Ceylon Electricity Board established
under the Ceylon Electricity Board Act, No. 17 of 1969;
2. Medical services;
3. Supply of water;
4. Transportation of goods and passengers;
5. Services provided to any exporter of any article, being services

directly related to improving the quality and character of such
article;
6. Services of sewing garments provided to any exporter of such

garments;
7. Services of a freight forwarder and a shipping agent licensed

under the Licensing of Shipping Agents Freight Forwarders,
Non Vessel Operating Common Carriers, and Container
Operators Act, No. 10 of 1972 or courier services in so far as
such services are in respect of the exporter of any article from
Sri Lanka;
8. Services provided by a public corporation, in so far as such

services are in respect of the exportation of any article from
Sri Lanka;
9. Services of an auctioneer, broker, insurance agent or

commission agent of any local product to the extent of the
brokerage receivable by such auctioneer or broker, or
commission receivable by such insurance agent or commission
agent, as the case may be;
10. Services of a travel agent in respect of inbound tours operated

where the payment for such services is received in foreign
currency through a bank and such agent is registered with the
Ceylon Tourist Board;
11. Client support services provided over the internet, telephone

or by an enterprise, exclusively for the provision of such
services, to one or more identified clients outside Sri Lanka,
for payment in foreign currency;
12. The business of life insurance;
13. Distribution, production and supply of any cinematographic

films primarily for exhibition in cinemas;
14. Exhibiting films in a cinema;
15. Any service provided to the United Nations Organization or

to any specialized agency of such organization or to the
diplomatic mission of any foreign Government or to any
member of the diplomatic staff of such mission or to any other
person approved by the Minister on the recommendation of
the Minister of Foreign Affairs as being of the status of a
diplomatic mission;
16. Any service rendered in or outside Sri Lanka to any person or

partnership outside Sri Lanka for the utilization out of Sri
Lanka for payment in foreign currency, if such foreign
currency is remitted to Sri Lanka through a bank;
17. Services provided to any specific project carried on, out of

foreign funds or donations received by the Government, as
approved by the Minister considering the economic benefit to
the country;
18. Any service provided by the Central Bank of Sri Lanka

established under the Monetary Law Act (Chapter 422);
19. Any service provided free of charge by any public corporation

out of the funds voted by Parliament from the Consolidated
Fund or out of any loan arranged through the Government, on
behalf of the Government;
20. Services provided by any Government Department, Ministry

or any Local Authority;
21. Services provided by foreign consultancies for the large-scale

infrastructure development projects being projects which have
been approved by the Minister of Finance, as beneficial for the
economic development of Sri Lanka;
22. Services provided in relation to ship building for the

international market for payments made in foreign currency;
and
23. Any service provided by the Employee’s Trust Fund, Provident

Fund, Pension Fund, Pension Trust Fund and Gratuity Fund.
SECOND SCHEDULE
[Section 3(1)]
LIABLE TURNOVER
Liable Turnover
1. Importation of any article 100% of the turnover referred to

[Section 2 (a)] in section 3(2)(a)
2. Manufacture of any article 85% of the turnover referred to
[Section 2 (b)] in section 3(2)(b)
3. Providing a service
[Section 2 (c)]
(a) Supply of Financial 100% of the Value addition

services attributable to financial services
referred to in section 3(2)(c)(i)
The value addition

attributable to such financial
services shall be computed
for the payment of levy on
the business of financial
services for the purpose of
this Act by applying the
attributable method referred
to in Chapter IIIA of the
Value Added Tax Act, No.
14 of 2002:
Provided however, that
in calculating the value
addition attributable to such
financial service, where the
amount of profits for each
relevant quarter cannot be
accurately ascertained, such
amount may be estimated on
the basis of available
information. The estimated
amount shall be adjusted to
reflect the actual amount
with the audited statement
of accounts on yearly basis
and such adjustment shall be
submitted within six months
after the closing date of the
relevant accounting period;
(b) Land and improvements 100% of the turnover

referred to in section
3(2)(c)(ii); and
(c) Services other than (a) 100% of the turnover

and (b) referred to in section
3(2)(c)(iii).
4. Wholesale and retail sale
(a) Sale of any article by a 50% of the turnover

registered distributor in referred to in section 3(2)(d)
relation to any manufacturer
or producer of any goods in
Sri Lanka; and
(b) Wholesale or retail sale other 25% of the turnover referred

than item (a) above including to in section 3(2)(d)
importation and sale
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THE GAZETTE OF THE DEMOCRATIC

SOCIAL SECURITY CONTRIBUTION LEVY

Ordered to be published by the Minister of Finance,

Price : Rs. 85.00 Postage : Rs. 35.00

This Gazette Supplement can be downloaded from www.documents.gov.lk

AN ACT TO PROVIDE FOR THE IMPOSITION AND COLLECTION OF A LEVY

BE it enacted by the Parliament of the Democratic Socialist

1. This Act may be cited as the Social Security Short title

IMPOSITION OF SOCIAL SECURITY

2. The provisions of this Act shall apply to every person Persons to

(a) imports any article;

(b) carries on the business of manufacture of any article;

(c) carries on the business of providing a service of

15 (d) carries on the business of wholesale or retail sale of

20 3. (1) A levy known as the “Social Security Contribution Imposition of

quarter”) on or after July, 1, 2022 in respect of the liable

(a) In case of a taxable person referred to in paragraph

(b) In case of a taxable person referred to in paragraph

(2) For the purposes of this Act, “turnover”-

(a) with reference to a taxable person referred to in

20 (b) with reference to any taxable person referred to in

(c) with reference to any taxable person referred to in

(i) the sum receivable whether received or not,

(ii) the value of any service arising from the

(iii) the sum receivable, whether received or not,

20 (d) with reference to any taxable person referred to in

(3) The turnover specified in subsection (2) for the

(a) any bad debt incurred by such person in that quarter:

Provided however, any bad debt recovered in any

(c) any rebate paid under the Export Development

5 REGISTRATION UNDER THE ACT

4. (1) Every taxable person, other than a taxable person Taxable

25 (2) Where the Commissioner-General is of the opinion

30 (3) The Commissioner-General shall-

(a) upon receipt of an application by any person under

(b) where an application has not been received under

register such person with effect from such date as the

5. (1) Any registered person may make an application in Cancellation

(a) such registered person has ceased to carry on or

(b) the aggregate turnover of such registered person

(2) The Commissioner-General-

(a) shall, on receipt of an application under subsection

(b) may at any time,

and upon being satisfied with the provisions of paragraphs

(3) The Commissioner-General may refuse to cancel the

5 (4) Where the Commissioner-General cancels the

6. Notwithstanding the cancellation of registration Liability not

7. Every registered person shall notify the Commissioner- Registered

(b) of the nature of the taxable activity carried on or

(c) of the person authorized to sign returns and other

(d) of ownership of the taxable activity carried on or

not later than fourteen days after the occurrence of such

RETURNS AND INFORMATION

8. (1) Every registered person shall furnish to the Returns and

(2) Every registered person who furnishes such return

(3) The Assistant Commissioner shall issue a notice to a

(4) The Assistant Commissioner shall acknowledge

(5) For the purposes of obtaining full information in

25 (a) to produce for examination or transmit to the