Application for effect the first import of a BOI enterprise

Permission to import the first consignment of capital goods and construction materials has to be granted by the Engineering Approvals & Special Projects Department in Head Office BOI and Engineering Department of the relevant Zone / Regional Office, after approval of the site and building plans.

Procedure for Clearance of Import Cargo (effect the first import of a BOI enterprise).

As an Investor who has signed an agreement under section 17 of the BOI law, you are eligible to import project related items approved by the Investment Department without customs duty. However, you are required to pay other taxes liable under the customs.

Required Documents

Air Freight.
  • 02 Copies of CUSDEC (BOI copy & Delivery copy)
  • Commercial Invoice
  • Master Airway Bill
  • House Airway Bill
  • Freight Arrival Notice
Sea freight
  • 02 Copies of CUSDEC (BOI copy & Delivery copy)
  • Commercial Invoice / Packing List
  • Bill of lading
  • Delivery order

Certificate of conformity of the building, has to be obtained from the same department prior to import of raw material. ( If applicable) .

Process Steps

Step(1)

Applicant should submit a duly filled application form together with aforesaid required documentation.

Step(2)

Application form it may be submitted with the appropriate fee to the Engineering Approvals & Special Projects Department in Head Office BOI and Engineering Department of the relevant Zone / Regional Office.

Step(3)

Board reviews the application and the relevant documents.

Step(4)

Clearance granted to the Applicant.

Application for cancellation of unutilized import CUSDEC

The below mentioned format to be used for cancellation of import entries.

Application for Cancelation of Import CUSDECS

Guideline for Assigning VAT Category.

A company shall enjoy prescribed VAT categories such as 22/7 VAT deferment, permanent VAT deferment, VAT exempt and VAT upfront facilities during their business life cycle base on authorized or prescribed principles. VAT Unit of Investor Services Department responsible for assigning a VAT category for a company.

  • 22/7 VAT Deferment
  • Permanent VAT Deferment
  • VAT Exempt
  • VAT Upfront

An investor who signed an agreement under the section 17 of the BOI law, eligible to obtain 22/7 VAT deferment facility during the project implementation period (i.e. PIP). The company needs to request the 22/7 VAT deferment facility from the Inland Revenue Department (i.e. IRD).
Then, the 22/7 VAT deferment facility approval letter from IRD need to be submitted to the VAT Unit of Investor Services Department of BOI with following documents.

Required Documents

  • Letter of Guarantee for 22/7 VAT Deferment
  • Application for Registration with Director General of Customs (i.e. DGC)
  • Power of Attorney (to ensure the company registration and directors)

Once the 22/7 VAT deferment facility period is expired, the company needs to follow relevant step as follows.

ScenarioAction Required

If PIP period exists and 22/7 VAT deferment facility is expired

Renew the 22/7 VAT deferment facility or if IRD will not extend the 22/7 facility move to VAT upfront facility 

If PIP period and 22/7 VAT deferment facility is expired

If IRD will not extend the 22/7 facility release import shipments through Sri Lanka Customs, all taxes are payable

If 22/7 VAT deferment facility is expired and first export is done

Enjoy Permanent deferment facility (this facility is entitle for export oriented companies only)

During the period of 22/7 VAT deferment facility the company needs to regularly submit the Extension to Settle the VAT Liability (90 days’ extension) letters and credit vouchers to settle the import VAT liability.

A company who successfully completed the construction period, they will be eligible permanent VAT deferment. The following conditions need to be completed to entitle for the facility.

Conditions

  • Should be an export oriented company.
  • First export needs to be completed.

The following documents need to be submitted to register for permanent VAT deferment facility.

 

Required Documents

  • Permanent VAT Deferment Request Letter
  • Letter of Guarantee for Permanent VAT Deferment
  • Application for Registration with DGC
  • Export Schedule for 3months

The company needs to regularly submit the Extension to Settle the VAT Liability (90 days’ extension) letters and credit vouchers to settle the import VAT liability.

The following reasons might be caused for disqualification of permanent VAT deferment facility.

 

Reasons for Disqualification

  • Inadequate export performance of the company (i.e. status will be decided by the IRD)

 

A company who successfully meets one of the following conditions, they will be eligible for VAT exempt facility.

 

Conditions
  • A company who is located in one of the 7 prescribed zones (i.e. 7 zones such as Katunayake, Biyagama, Koggala, Pallekele, Malwatta, Watupitiwala, Mirigama are eligible for the VAT exempt facility)
  • Items which are exempted from VAT Act No.14 of 2002
  • Exemption from special provisions and approvals

 

A company who successfully meets one of the following scenarios, they will be eligible for VAT upfront facility.

Scenarios Applicable for VAT Upfront
  • A company who unable to eligible for the permanent VAT deferment facility or VAT exempt facility
  • A company who registered for temporary VAT category (i.e. 2525)
  • A company who are liable to pay VAT from the agreement, act or any legitimate reason

* In addition to the above three reasons, inadequate export performance of the company might be caused to entitle for VAT upfront facility with the consent of IRD.

Guidance for Clearance of Imported Used Machines

The BOI enterprise should obtain an approval from the Investment Appraisal Department of the Board of Investment for the purpose of clearance of the imported used machines.


Required Documents
  • Request letter from the BOI enterprise
  • Valuation report from the certified chartered valuer and it should be submitted within 14

Guidelines for Foreign Exchange Receivable Statement

As per to the Extra Ordinary Gazette Notification 2184/21 dated 16 July 2020, cited as the Import and Export (Control) Regulations no. 04 of 2020, issued with regard to import restrictions, every exporter is required to submit the following details to the Investor Services Department in each quarter of the calendar year with the bank confirmation letter.  

  1. Remittance receivables as at the beginning of the quarter 
  2. Value of exports effected within the quarter
  3. Remittance received within the quarter
  4. Remittance receivables as at the end of the quarter 

 For further details with regards to this, please send an email to isho@boi.lk