The Finance and Mass Media Ministry yesterday announced the reduction of aValue Added Tax (VAT) on imported fabrics to 5 percent from 15 percent.
The ministry said the reduction was carried out after listening to the requests made by large and small-scale fabric industry stakeholders.
Finance and Mass Media Minister Mangala Samaraweera signed the gazette notification in this regard yesterday.
Earlier, fabric was subject to a Rs.100 per kilogramme cess at the time of import. The 2018 budget proposed to impose a 15 percent VAT on goods.
The Value Added Tax Act No 14 of 2002 was amended accordingly and the new VAT scheme came into effect from August 16, 2018.