Tax & VAT Disclosure

1. Purpose

This disclosure summarizes how taxes (VAT, GST, withholding tax, import duties) are treated for orders placed by international Buyers on SriLankaExport.com (operated by Harker International (Pvt) Ltd, Reg. No. PV 00338032, Kandy, Sri Lanka). It is general guidance only and does not replace tax advice specific to your business, jurisdiction, or transaction. Always confirm treatment with your tax adviser.

2. Listed prices

Unless explicitly stated otherwise on a listing:

• Prices are quoted FOB Colombo Port in USD.
• Prices are exclusive of all taxes, customs duties, freight, and insurance.
• The Vendor’s currency for invoicing is USD; the Buyer’s home-jurisdiction tax treatment is determined by the Buyer’s tax residency and the Incoterms agreed at the order stage.
• For sample orders shipped via courier, the listed sample price is exclusive of courier surcharges and destination clearance costs.

3. Sri Lanka VAT: the export side

Sri Lanka VAT is governed by the Value Added Tax Act No. 14 of 2002 as amended; the current standard rate is 18%. Exports of goods from Sri Lanka are zero-rated. In practical terms for a Buyer ordering goods for shipment outside Sri Lanka:

• The Vendor invoices you at the FOB price without Sri Lanka VAT (zero-rated under Schedule I, Part II of the VAT Act).
• The Vendor’s VAT registration number, where applicable, is shown on the tax invoice issued by the Vendor.
• Where the Vendor is required by Sri Lankan law to issue a Tax Invoice (as distinct from a commercial invoice), the invoice complies with Inland Revenue Department (IRD) requirements.

Where goods are sold for delivery within Sri Lanka (uncommon on the Platform; primarily applicable to in-country distributors), Sri Lanka VAT at the standard rate applies and is shown separately on the invoice.

4. Buyer-side tax treatment

Treatment in the Buyer’s home jurisdiction depends on where the Buyer is established. The summary below is provided for orientation; consult your tax adviser for definitive treatment.

European Union: B2B Buyers

Goods imported into an EU Member State from a third country (Sri Lanka is a third country for EU VAT purposes) are subject to import VAT at the rate applicable in the Member State of import, payable on importation at the customs declaration. Where the Buyer is a taxable person registered for VAT (B2B), import VAT is typically recoverable as input VAT through the Buyer’s domestic VAT return, subject to local rules. The reverse-charge mechanism applies to certain transactions; the Buyer is responsible for accounting for any reverse-charge VAT correctly under Article 196 of Directive 2006/112/EC.

Customs duty may apply depending on the Combined Nomenclature classification and any preferential trade arrangement between the EU and Sri Lanka. Sri Lanka currently has GSP+ access to the EU, which can result in reduced or zero duty on qualifying goods; the Vendor will issue a REX statement of origin where applicable.

United Kingdom: B2B Buyers

Post-Brexit, UK VAT applies on importation at the rate determined by the UK customs declaration. Reverse-charge accounting applies to certain B2B transactions; the Buyer is responsible for accounting for any reverse-charge VAT under the UK VAT Act 1994 and HMRC guidance. Postponed VAT Accounting is available to most VAT-registered UK Buyers.

UK–Sri Lanka customs duty depends on the UK Global Tariff classification and any preferential arrangement (currently the UK Developing Countries Trading Scheme, which extends GSP-equivalent preferences to Sri Lanka).

United States: B2B Buyers

The United States does not impose federal VAT. State-level sales and use taxes may apply depending on the state of import and the nature of the goods; treatment varies by state. US customs duty applies at the rate determined by the Harmonized Tariff Schedule of the United States; Sri Lanka qualifies for the US Generalized System of Preferences (GSP) on eligible goods, subject to its current renewed status.

India: B2B Buyers

Goods imported into India are subject to Integrated GST (IGST) at the rate applicable to the goods under the GST regime, payable on importation. The Buyer (as registered taxable person) may be eligible to claim input tax credit on IGST paid, subject to the conditions of the CGST and IGST Acts. Customs duty depends on the tariff classification; the India–Sri Lanka Free Trade Agreement (ISFTA) and the SAARC Preferential Trading Arrangement (SAPTA) provide preferential rates for qualifying goods.

Australia, New Zealand, Canada, Japan, China, ASEAN: B2B Buyers

GST or equivalent consumption tax applies on importation in most jurisdictions; treatment varies. Customs duty is determined by the HS classification under each jurisdiction’s tariff schedule. Several of these jurisdictions have preferential trading arrangements with Sri Lanka (e.g. APTA, GSP-equivalent). Consult your local tax adviser.

5. Withholding tax (WHT) on Vendor payouts

Where Harker International is required by the Sri Lanka Inland Revenue Act No. 24 of 2017 (as amended) to withhold tax on commission income paid to a Sri Lankan Vendor, the WHT is deducted from the Vendor’s payout and remitted to the IRD on the Vendor’s behalf. The Vendor receives an annual WHT certificate (currently BIR Form 1601) for filing with the Vendor’s own return. This is internal to the Vendor relationship and does not affect the price the Buyer pays.

6. Tax invoices

Each completed order generates two documents:

• Vendor commercial / tax invoice: issued by the Vendor in the Vendor’s name to the Buyer, showing the Vendor’s Business Registration Number, EDB Registration Number, and (where applicable) Sri Lanka VAT Registration Number. Used by the Buyer for customs clearance and tax accounting in the Buyer’s jurisdiction.
• Platform-fee invoice: issued by Harker International (Pvt) Ltd to the Vendor, reflecting only the platform commission. Not relevant to the Buyer’s tax position.

Copies of past tax invoices for completed orders are available to the Buyer through the Buyer’s account dashboard. Re-issuance can be requested at info@harker.international.

7. Import duties and clearance costs

Import duties, customs clearance fees, port handling charges, and any landed costs incurred at the destination are the responsibility of the Buyer unless the Incoterm agreed at the order stage explicitly allocates them to the Vendor (e.g. DAP “Delivered at Place” or DDP “Delivered Duty Paid”). Defaults assume FOB Colombo Port.

8. Buyer self-assessment statement

For B2B Buyers required to declare reverse-charge VAT or import VAT through their domestic return, the Buyer is solely responsible for the timely and accurate declaration. Harker International and the Vendor do not represent or advise on the Buyer’s home-jurisdiction VAT treatment.

9. HS classification

The Harmonized System (HS) classification on each listing is provided by the Vendor and is intended to assist with customs declaration. The HS code shown is a best-effort declaration based on the goods as ordinarily traded. The Buyer (or the Buyer’s customs broker) is responsible for confirming the correct classification under the destination jurisdiction’s tariff schedule for the specific shipment.

10. Customs documentation provided

The following documentation is provided by the Vendor at shipment, where applicable to the goods and destination:

• Commercial invoice.
• Packing list.
• Certificate of Origin (issued by Sri Lanka Department of Commerce or EDB).
• GSP Form A or REX statement (for EU preferential origin).
• Phytosanitary certificate (for plant-origin goods).
• Health certificate (for food / seafood goods).
• EU Catch Certificate (for seafood entering the EU).
• Lab test reports (where required by the destination jurisdiction).