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Nation Building Tax (NBT)

Nation Building Tax (NBT) imposed under Nation Building Tax Act No. 9 of 2009 is in operation effective from February 01, 2009. The NBT Act has been amended by the following amendment Acts; Act No 32 of 2009, Act No 10 of 2011, Act No 09 of 2012, Act No 11 of 2013, Act No.10 of 2014, Act No. 12 of 2015 and Act No. 22 of 2016.

NBT is payable for every quarter at the specified rate on the liable turnover for that quarter.

Who is liable for NBT

NBT is payable by every person (individual, Company, body of persons) or partnership who-

  1. Imports any article into Sri Lanka; or
  2. Carries on the business of manufacturer of any article; or
  3. Carries on the business of providing a service of any description, including the business of banking or finance (excluding excepted services); or
  4. Carries on the business of wholesale or retail sale of any article (excluding excepted article).

Threshold for NBT

The following turnover thresholds are applicable for NBT registration.

  1. Liable Turnover from the supply of any goods or services (other than goods or services referred to in paragraph (B) below) which exceeds Rs. 3,750,000 in any quarter from 1 January 2015 upto 31 March 2016. This threshold is reduced as Rs. 3,000,000 and if it exceeds Rs.3,000,000 in any quarter from 01 April 2016 onwards.
  2. Liable turnover from a processing of any locally produced agricultural produce in the preparation for sale which exceed Rs. 25,000,000 in any quarter from 01 April 2016 onwards.

Liable turnover

  1. In the case of an importer – The value of the article imported as computed for the purpose of the Value Added Tax Act but excluding the value of any excepted article.
  2. The case of a manufacturer or service provider – Any sum receivable, whether received or not, from the sale of manufactured goods or provision of services (other than excepted goods and excepted services) in Sri Lanka after deducting:
  • Bad debts incurred;
  • Any Value Added Tax paid;
  • Any excise duty paid under the Excise Duty (Special Provisions) Act No.13 of 1 989;
  • Rebate paid under the Export Development Rebate in relation to any international event as approved by the Minister of Finance;
  • Any turnover from the Supply of any goods or services in relation to any international events approved by the Minister of Finance.

III. In the case of a wholesale or retail trader – Any sum receivable, whether received or not, from the sale of any article, other than the following articles;

  • Pharmaceuticals;
  • Sugar, dhal, potatoes, onions, dried fish, milk powder or chillies, specified under the provisions of the Special Commodity Levy Act No. 48 of 2007, where such article is subsequently sold by the importer of such article;
  • Gems or jewellery sold in foreign currency as authorised by the Central Bank of Sri Lanka;
  • Any printed book;
  • Any article exported;
  • Any article sold to any exporter for export;
  • Fresh milk, green leaf, cinnamon or rubber (latex, crape or sheet rubber) purchased from any manufacturer or producer thereof;
  • Petrol, diesel or kerosene sold in a filling station;
  • Retail sale of any article at duty free shops for payment in foreign currency;
  • Distribution of LP Gas.

 IV. The case of a business of providing financial services

Turnover for the business of providing financial services for NBT is the value addition calculated for the purposes of application of the attributable method referred to in subsection 4 read with subsection 5 of Section 256 of Value Added Tax Act No. 14 of 2002 which is not the turnover but the value addition.

 V. The case of a business of real estate and improvement thereon 

Turnover for the business of real estate and improvement thereon for NET purposes is the total turnover up to 31.12.2014 and from 01.01.2015 is the value addition calculated according to the same manner as defined in the subsection 7 of Section 5 of Value Added Tax Act No. 14 of 2002.

Rate of NBT

Nature of Business    Rate
Manufacturer (other than any wholesale or retail sales turnover)       2%
Any service provider (Including financial services)       2%
Distributor (1/4th of liable turnover)       2%
Wholesale or Retail (1/2th of liable turnover)       2%
Business of real estate and improvement       2%

Input tax credit for manufacturers

A liable person engaged in the business of manufacture of any article can claim Credit for the following input tax paid against the tax payable on turnover in the relevant quarter.

  1. Tax in respect of an article imported
  2. Tax in respect of an article purchased

Provided such articles are used exclusively in its business of manufacture.

If such input tax credit exceeds the tax payable for that quarter, the excess shall be deemed to be an advance payment of tax for the relevant subsequent quarter.

Payment of NBT

  • NBT on imports should be paid at the time of import.
  • NBT on manufacturing, services and trading for each month should be paid on or before the 20th of the subsequent month.

Filing of Returns 

  • NBT returns should be submitted on a quarterly basis on or before the 20th day after the end of the relevant quarter.

NBT Acts and Amendments up to August 2018

Description

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Nation Building Tax Act, No. 09 of 2009[Certified on 11th March, 2009] English Sinhala
Nation Building Tax (NBT) (Amendment) Act, No. 32 of 2009 [Certified on 18th May, 2009] English Sinhala
Nation Building Tax (NBT) (Amendment) Act, No. 10 of 2011 [Certified on 31st March, 2011] English Sinhala
Nation Building Tax (NBT) (Amendment) Act, No. 09 of 2012 [Certified on 30th March, 2012] English Sinhala
Nation Building Tax (NBT) (Amendment) Act, No. 11 of 2013 [Certified on 23rd April, 2013] English Sinhala
Consolidated Text of the Nation Building Tax (NBT) Act, No. 09 of 2009[Incorporating Amendments up to 30.04.2013] English Not available
Nation Building Tax (NBT) (Amendment) Act, No. 10 of 2014 [Certified on 24th April, 2014] English Sinhala
Nation Building Tax (NBT)(Amendment) Act, No.12 of 2015 [Certified on 30th October 2015] English Sinhala
Nation Building Tax (NBT)(Amendment) Act, No.22 of 2016 [Certified on 7th November 2016] English Sinhala
Nation Building Tax (NBT)(Amendment) Act, No.13 of 2017 [Certified on 9th August,2017] English Sinhala
Nation Building Tax (NBT)(Amendment) Act, No.20 of 2018 [Certified on 30th July, 2018] English Sinhala

 

 

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