Crop Insurance Levy (CIL)

Download Crop Insurance Levy (CIL) Gazette No. 1824/23 

The Liability

Crop Insurance Levy shall be paid by every institution under the purview of the:

  1. Banking Act, No.30 of 1988
  2. Finance Companies Act, No. 78 of 1988; or
  3. Regulation of Insurance Industry Act, No. 43 of 2000

Accordingly, every Bank, Finance company or Insurance company registered under any of the above Acts shall be liable to Crop Insurance Levy to the National Insurance Trust Fund according to section 14 of the Finance Act no. 12 of 2013.

Base

One percent (1%) of the profit after tax for a year of assessment (period of twelve months commencing on the first day of April of any year and ending on the thirty first day of March in the immediate succeeding year)

Effective date

Crop Insurance Levy should be paid on the profit arising on or after 01.04.2013.

Calculation of Liability for the quarter

Levy shall be calculated based on the estimated profit after tax in each quarter.   Estimated profit after tax for each quarter can be either:

  • 1/4 of the profit after tax of the immediate preceding year or
  • Actual profit calculated for the relevant quarter (if the actual profit is ascertainable only)

Adjustment for actual liability at the end of the year of assessment

Reconciliation of actual liability with total liability declared should be done after finalizing the annual accounts (audited) for the relevant year of assessment. Additional liability arising after the reconciliation should be paid on or before the 30th September of year of assessment immediately succeeding year of assessment concerned.
Excess payment if any shall not be refunded but can be set off against the levy payable in subsequent year/s of assessment soon.

Penalty on default

A penalty shall be charged where levy or part thereof such levy is not paid on or before due dates. This penalty shall be charged in addition to the levy payable. The penalty shall not arise if at least 1/4 of the previous liability is paid on the due dates subject to the payment of final liability (if any) on or after 30th September of the immediately succeeding year of assessment.

  • A penalty equivalent to ten percent (10%) of such levy shall be charged in respect of first thirty (30) days in which the payment was in default
  • Further two percent of the levy for each further period of thirty days or part of thereof, however, total penalty will not exceeding 50 percent of levy

No penalty shall be charged for the levy payable for the 1st quarter ended 30th June 2013, which was due on or before 31st July 2013 if such levy is paid on or before 31st October 2013 alone with levy payable for the second quarter ended 30th September 2013.

Returns and Payments

Payment and Return of Crop Insurance Levy should be furnished on or before 30th day of the month immediately succeeding the end of that relevant quarter.

1st Quarter – April – June – Prior to 30th July
2nd Quarter – July – September – Prior to 30th October
3rd Quarter – October – December – Prior to 30th January
4th Quarter – January – March – Prior to 30th April

Annual returns should be furnished together with any balance payment if any on or before 30th September of year of assessment immediately succeeding year of assessment concerned. (e.g with regard to Y/A 2013/14, annual returns and payment should be furnished on or before 30th September 2014) .

Cheque should be drawn in favour of “National Insurance Trust Fund A/C No. 033-2-003-0-2467951” and furnished together with returns.