Sri Lanka not to impose VAT on water

  • 18/04/2008

  • Colombo Page (Sri Lanka)

National Water Supply and Drainage Board (NWSDB) of Sri Lanka has decided not to enforce the pre decided 15 per cent value added tax (VAT) charges on consumer bills, from this month onwards. NWSDB was initially planning to pass on this 15 per cent VAT charges to consumers, having being directed by the Department of Inland Revenue. However, with an urgent directive given by the Ministry of Water Supply and Drainage, the plans of doing so has been stopped with immediate effect, which is considered as a relief for the consumers. NWSDB Deputy General Manager - Commercial, A. W. Gunasekara told ColomboPage that over 200 million liters of water is distributed on a monthly basis among 1 million consumers throughout the island at Rs. 12.50 per liter. "The extra tax addition for every service and value added products were passed by the Parliament in 2002, where water is not exempted. However, Water Board didn't pass this burden directly to the consumer. If the monthly consumption is less than 25 units the consumers were supposed to pay a part of this tax. In the market water is valued around Rs. 40 a liter, but we sell 10,000 liters for just Rs. 12.50,' Gunasekara said.