The Department of Inland Revenue has issued a critical update regarding Value Added Tax (VAT) administration. Per Gazette Extraordinary No. 2463/05, dated November 17, 2025, the Commissioner General of Inland Revenue (CGIR) has specified a mandatory format and specification for Tax Invoices.
This new regulation comes into effect on January 01, 2026, giving businesses and software providers limited time to update their invoicing systems.
Here is a comprehensive breakdown of the new requirements to ensure your business remains compliant.
1. Mandatory Layout and Design
The new regulations move away from ad-hoc invoice designs to a structured layout. The document must be prominently titled “Tax Invoice” on the face of the document in bold or highlighted text.
The “Top Corners” Rule:
- Top Left-Hand Corner: Must display the Supplier’s details (TIN, Name, Address, and Telephone Number).
- Top Right-Hand Corner: Must display the Purchaser’s details (TIN, Name, Address, and Telephone Number).
2. The New Invoice Serial Number Logic
Perhaps the most significant technical change is the strict format required for the Invoice Serial Number. All registered persons must adopt the following format: YYMMM_QQQQ_XXXXX.
- YY: Last two digits of the calendar year (e.g., “25” for 2025).
- MMM: First three characters of the month in uppercase (e.g., “OCT”).
- QQQQ: An alphanumeric code for the branch, unit, or project (e.g., “BR03”).
- XXXXX: The numeric serial number of the invoice (no letters or symbols).
Example: The first invoice issued by Branch 03 in October 2025 would be numbered: 25OCT_BR03_1.
Note: The total length must not exceed 40 characters and must not contain spaces.
3. Critical Data Fields
The Gazette specifies exactly how data must be presented.
- Date Format: Both the “Date of Invoice” and “Date of Delivery” must be expressed in the MM/DD/YYYY format.
- Currency and Value:
- Values must be in Sri Lankan Rupees (LKR).
- Amounts must be stated without cents.
- The invoice must clearly separate the Net Amount (exclusive of VAT), the VAT Charged, and the Total Consideration.
- The total consideration must also be written in words.
- Mode of Payment: You must now explicitly state the payment method (Cash, Cheque, Bank Transfer, Online Payment, etc.).
4. Validity and Record Keeping
To streamline administrative burdens, the Gazette clarifies the “Request for Tax Invoice” rule. If a registered person makes a written request for a Tax Invoice within 14 days of a supply, that request is deemed valid for all subsequent supplies between the same parties. Repeated requests for future transactions are not required.
Retention Policy:
- The Original goes to the Purchaser.
- The Supplier retains the Duplicate (marked “Duplicate”).
- Both parties must retain these records for five (5) years from the end of the relevant taxable period.
What This Means for Your Business
If you utilize an ERP system (like SAP, Oracle, Xero, or custom POS software), you must contact your technical team immediately to reconfigure your invoice templates to meet the YYMMM_QQQQ_XXXXX serial numbering logic and the MM/DD/YYYY date format before January 1, 2026.
Failure to adhere to the specified format may result in disputes regarding input tax recoverability for your clients.
Sinhala Gazette
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