• The new rate applies only to goods manufactured and released to the market after January 1

By Chaturanga Pradeep Samarawickrama

Amidst the recent increase in the Value Added Tax (VAT), effective as of yesterday, the Consumer Affairs Authority (CAA) has clarified that the elevated VAT rates will only apply to goods and items manufactured and released to the market from January 1 onward. It has been emphasized that the price adjustments based on VAT for items released to the market prior to 2024 will not be applicable, an official who wished to remain anonymous said.

The Authority said that they are analysing the market and would take action against the traders who arbitrarily increased the prices.

The consumer items should be released to the market on January 1 with the printed VAT including prices.
“The CAA said that traders lack the authority to unilaterally raise prices on consumer items at their discretion. Any such actions will result in legal consequences,” he said.

“The CAA asserts that traders lack the authority to arbitrarily raise prices on consumer items. Violations will result in legal action being taken against them,”

“The CAA official noted that certain consumer items are subject to an 18 per cent VAT, while others, having already incurred a 15 per cent VAT, would now be applicable for only a three per cent VAT.”
“In addition to the VAT imposition on January 1, prices for mobile phones, bus fare, three-wheeler fare, school van fees, milk tea, plain tea, and lunch packets were raised,” the CAA official said.          

•  Violations will result in legal action being taken against them