Finance Minister Mangala Samaraweera has reduced the VAT imposed on fabric to just 5% after considering the requests made by importers and traders engaged in using raw materials to make ready-made garments.
The Ministry of Finance and Media said that minister Samaraweera had signed the gazette notification today.
Earlier, the fabric was subject to LKR 100/kg CESS at the time of imports. The 2018 budget had proposed to impose a VAT of 15% on goods with the new VAT scheme coming into effect from the 16th August 2018. Importers, traders and industrialists engaged in using raw materials for the manufacture of ready-made garments had appealed to Samaraweera seeking relief.
After consulting with the relevant stakeholders, Samaraweera had reduced the VAT to 5% as a measure to help small and medium scale enterprises.
The Finance Ministry also said that the Enterprise Sri Lanka credit schemes will enable small and medium scale manufacturing industrialists to obtain raw materials at a low cost.
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