News
Inland Revenue releases list of goods and services exempt from enhanced VAT
The Inland Revenue Department yesterday (21) issued the list of goods and services that would be exempted from the enhanced Value Added Tax (VAT) regime that comes into effect from 01 January 2024.
The list of items included Wheat and wheat flour; infant milk powder; Pharmaceutical Products and Drugs (other than cosmetics) whose end use are confined to therapeutic or prophylactic effect and purchased on a prescription of a physician and raw materials for the production or manufacture of such products or drugs; Ayurvedic Preparations that belong to the Ayurveda Pharmacopoeia or Ayurvedic Preparations (other than cosmetic preparations) or Unani, Siddha or Homeopathic Preparations (other than cosmetic preparations); Crude Petroleum Oil, Kerosene, Aviation Fuel, Oil for Ships or Fuel Oil; Artificial Limbs, Crutches, Wheel Chairs, Hearing Aids, Accessories for such aids or Appliances, White Canes for the blind, Braille Typewriters and Parts, Braille Writing Papers, Braille Writing Boards, etc.; Bio Fertilizer, Artemia Eggs and Peat Moss; Agricultural Seeds, Agricultural Plants, Shrimp Feed inclusive of Prawn Feed and Animal Feed but excluding Poultry Feed; Yarn used for textile industry; and Dyes used for the handloom industry.
Among the services exempted from VAT are: Educational Services provided by any person or partnership; Public passengers transport services (other than air transport, water transport or transport of tourists, excursion tours and taxi services); Electricity including distribution; Services in relation to burials and cremations; Services at a restaurant situated beyond the immigration counter at the
Bandaranaike International Air Port; Goods and services to the mission of any state or any organisation to which the provisions of the Diplomatic Privileges Act; Goods or services funded directly by foreign organisations for the relief of sudden distress caused by natural or human disasters or to any activity having regard to the interest of the national economy, as approved by the Minister; a number of Financial Services:
the operation of any current, deposit or savings account; the exchange of currency; the provision of any loan, advance or credit, etc.; the life insurance, Agrahara insurance and crop and livestock insurance; the transfer of non-performing loans of a licensed commercial bank by way of transfer of such loans to any other person in terms of a restructuring scheme or other scheme of such bank as approved by the Central Bank of Sri Lanka with the concurrence of the Minister; All healthcare services provided by medical institutions or professionally qualified persons providing such care other than hospital room charges; Locally Manufactured Handloom Textiles;
Rice, Rice Flour and Bread so far as such products are manufactured locally; Unprocessed Agricultural, Horticultural or fishing products produced in Sri Lanka; Locally manufactured Surgical Gauze used for surgery; Fabric which are subject to a cess at a specific rate; Services by the Department of Commerce, the Board of Investment of Sri Lanka or the Sri Lanka Ports Authority; Services by a person in Sri Lanka to any other person outside Sri Lanka to be consumed or utilised by such other person outside Sri Lanka for which the payment is made in Sri Lanka rupees; Geriatric Services and Child Care Services; Goods or services to any specified project identified by the Minister, taking into consideration the economic benefit to the country, on which the tax is borne by the Government; or (b) Goods and services to any infrastructure development project funded through foreign loans or donations directly to the Government Ministries, approved by the Minster on the recommendation of secretary of the respective Government Ministry; Goods or services by the Central Bank of Sri Lanka.
Meanwhile, Goods to be used as exhibition material or as material in any technical demonstration and which are re-exported after the completion of such project, exhibition or demonstration; Aircraft Engines or Aircraft Spare Parts identified under specified Harmonised Commodity Description and Coding System Numbers for Custom purposes; Chemical Naphtha by the Ceylon Petroleum Corporation to be supplied to the Ceylon Electricity Board for the generation of electricity; and The import and supply of goods at Duty Free Shops for payment in foreign currency.
News
US-assisted ‘Ice’ detection: NPC to examine IGP’s move to transfer drug-busting team
Senior DIG among those slated for transfer
By Shamindra Ferdinando
The National Police Commission (NPC) is expected to take up Police Headquarters recommendation to transfer a group of police officers responsible for a major ‘Ice’ bust at the Colombo port recently.
NPC sources told The Island that recommendation in respect of transfers was received last week. Sources said that though the NPC was scheduled to meet today (01), whether IGP Priyantha Weerasooriya’s recommendation would be discussed and decided today was not known.
Members of the NPC are retired High Court Judge Lalith Ekanayake (Chairman), K. Karunaharan, Dilshan Kapila Jayasuriya, A.A.M. Illiyas and Jayantha Jayasinghe
The IGP directed the Special Investigation Unit (SIU) to probe those who carried out the 31 August, 2026 raid that resulted in the detection of 463 kgs of ‘Ice’ concealed in a container that arrived from Pakistan.
The US Embassy declined to comment on the probe though it declared that the largest ever narcotics detection was made on intelligence made available by the US Drug Enforcement Administration (DEA).
The officers investigated for what an authoritative Headquarters source called shortcomings and lapses on the part of the raiding party, belonged to the Central Crime Investigation Bureau (CCIB). Senior DIG Ranmal Kodituwakku who, on behalf of the CCIB, received information directly from the DEA, is among those Police Headquarters wanted to transfer.
CCIB carried out the raid after having obtained a search order from the Aluthgama Magistrate court. Among the suspects taken in this connection are three Pakistani nationals.
News
2027 Budget to be held from 12 Nov. to 14 Dec.
* First Reading of the Budget on 7 October
The Committee on Parliamentary Business has decided that the Second Reading of the Appropriation Bill for the year 2027 (Budget Speech/presentation of Budget proposals) will take place on 12 November, followed by the Second Reading debate from 13 November to 14 December.
Secretary General of Parliament Kushani Rohanadeera said this had been decided at a meeting of the Committee on Parliamentary Business held recently under the chairmanship of Speaker Dr. Jagath Wickramaratne.
Accordingly, the Appropriation Bill was scheduled to be presented to Parliament for its First Reading on 7 October, the Secretary General said.
It was also decided that the Second Reading of the Appropriation Bill (Budget Speech) would be delivered by President Anura Kumara Dissanayake, in his capacity as the Minister in charge of Finance, on Thursday, 12 November, 2026.
Thereafter, the Second Reading debate will be held for seven days, from 13 November to 20 November. Accordingly, the vote on the Second Reading will be held at 6.00 pm on 20 November.
Thereafter, the Committee Stage debate will be held for 19 days, from 21 November to 14 December , with the vote on the Third Reading of the Budget scheduled for 6.00 pm on 14 December.
During this period, the Budget debate will be held every day, including Saturdays, except on public holidays and Sundays. Parliament is scheduled to meet at 9.30 am on each of these days.
From 9.30 am to 10.00 am each day, time will be allocated for the Parliamentary business specified under Standing Order 22(1) to (6). Thereafter, five Questions for Oral Answers will be taken up from 10.00 am to 10.30 am, followed by one question under Standing Order 27(2) from 10.30 am to 11.00 am.
Accordingly, the debate is scheduled to be held from 11.00 am to 6.00 pm on all days, except the two days on which votes are scheduled to be taken, Motions at the Adjournment Time will be taken up for debate from 6.00 pm to 6.30 pm, based on a 50:50 time allocation between the Government and the Opposition, the Secretary General stated.
It was also approved that during the Second Reading debate, 60% of the debate time will be allocated to the Government and 40% to the Opposition, while during the Committee Stage debate, 40% will be allocated to the Government and 60% to the Opposition.
Furthermore, if a division is called for on an Expenditure Head, relating to a Ministry, the relevant vote will be held at 6.00 pm at the conclusion of the proceedings on the respective day.
News
CB Governor confident over timely disbursement of next IMF tranche; hands post-2027 programme decisions to govt.
By Sanath Nanayakkare
Central Bank Governor Dr. Nandalal Weerasinghe addressed queries on the nation’s IMF bailout programme yesterday and indicated that Sri Lanka expects to reach a Staff-Level Agreement with the Fund shortly, clearing the path for the next tranche of funding under the $3 billion EFF arrangement before the end of the year.
Answering questions on Sri Lanka’s economic path, after the current programme expires in March 2027, Dr. Weerasinghe clarified that seeking a follow-up IMF arrangement was entirely a policy decision for the government rather than the Central Bank, maintaining the institutional boundary between Central Bank operations and political decision-making.
The Governor remained firm in his projection that the national economy would expand by around 4 percent throughout 2026, demonstrating economic resilience, even amid external volatilities, such as high oil prices.
Dr. Weerasinghe expressed confidence in the domestic economy’s underlying momentum. While international financial institutions and multilateral agencies had pegged Sri Lanka’s growth prospects at more conservative levels, typically around 3.0 to 3.5 percent, he emphasised that CBSL’s projections are grounded in continuous analysis of real-time indicators.
“When you compare with several other agencies, their growth projections hover around 3 to 3.5 percent. However, the economy is already growing at around 4 percent. In our projections, the economy will maintain this growth rate of around 4 percent throughout the year,” Governor Weerasinghe said.
He noted that despite mid-year quarter adjustments due to volatile oil prices, real economic indicators, including steady credit expansion across the commercial banking sector and sustained industrial and service activity, indicate that the growth trajectory remains firmly on track above the 4 percent benchmark.
Reiterating the Central Bank’s primary mandate, Dr. Weerasinghe noted that monetary policy actions remained focused on anchoring inflation and curtailing excess demand to prevent runaway price spikes.
On inflation targeting, the Governor mentioned that CBSL had submitted a technical recommendation to the Ministry of Finance to maintain an inflation target of 5 percent (+ or – 2 percent band) over the next three-year horizon.
Responding to inquiries on differing target forecasts announced by external agencies such as the IMF, Dr. Weerasinghe underscored that the Central Bank’s recommendations stem strictly from domestic technical and empirical evaluations.
“Our recommendation is based on pure technical and empirical analysis considering the country’s specific situation. We have recommended maintaining a 5 percent target for the next three years, and the government has accepted this recommendation,” he added.
Regarding foreign exchange management, the Governor noted that the Central Bank continues its active market intervention strategy aimed at smoothing out undue exchange rate volatility rather than resisting natural market trends.
Dr. Weerasinghe concluded that while the short-to-medium-term outlook remained assured, the combination of a steady 4 percent growth target and proactive fiscal measures would firmly anchor macroeconomic stability through 2026 and beyond.
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