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.