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Tax Trap

The Inland Revenue Department made Value Added Taxes (VAT) payments mandatory on all teas brought for the local market at the weekly auctions. The Inland Revenue Department made Value Added Taxes (VAT) payments mandatory on all teas brought for the local market at the weekly auctions. The tax was slapped on beginning at this week’s auction, to the dismay of local buyers, Asia Siyaka Commodity Brokers said. The new practice moves away from an earlier norm where only firms buying over 500,000 kilograms a quarter or over 1.8 million kilograms a year was liable to pay the tax.
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The tea brokers were liable to furnish sales information every month, allowing the Department to compute the tax liabilities. But with local firms working around the law to avoid the tax, Inland Revenue officials made the tax compulsory with exemptions, if any, only given to VAT resisted buyers, the Ceylon tea Traders Association said on Thursday.
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Buyers for the local market at this week’s dust tea auction however had to pay the 15 percent tax on top of the knockdown price (price at the fall of the hammer at the auction)Buyers registered as expo
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