An Economic Service Charge shall be charged, if aggregate turnover from Trade, Business, Profession or Vocation carried on or exercised in Sri Lanka whether directly or through an agent or more than one agent, exceed Rs. Fifty Million (50M) for that relevant quarter of every year of assessment.
In relation to any relevant quarter commencing on or after April 1, 2012, where such part of taxable income as consists of profits from any trade, business, professional or vocation assessed under Inland Revenue Act for the year of assessment which ended immediately prior to the commencement of the year of assessment to which such quarter belongs, is more than zero, the relevant turnover for such quarter shall be deemed to be zero. This exclusion is removed from the year of assessment 2016/2017.
Liability to ESC in Default
Where the ESC or part thereof has defaulted by a company, every director or other principal officer of such company shall be deemed to be a defaulter and recovery actions will be taken by The Department of Inland Revenue against the defaulter.
Due date for the Payment of E S C & Furnishing of ESC Return
E. S. C. shall be paid on quarterly basis and due date shall be on or before by the 20th of following month ending relevant quarter.
Return of Economic Service Charge shall be furnished annual basis and due date is 20th day of April for any year of assessment ending on March 31st of that year.
Economic Service Charge with effect from 1st April 2016
- The present exclusion of profit making businesses shall be removed.
- The present maximum liability of Rs.120 million per year shall be removed.
- The rate is increased from 0.25% to 0.5%.
- Petrol, diesel and kerosene retail trade shall be liable for ESC if the aggregate turnover for a Quarter is Rs.50 million. Tax shall be calculated on 1/10th of the liable turnover of such trade.
- ESC shall be charged in advance by the Commissioner General of Inland Revenue from the importers of items subject to Special Commodity Levy (SCL), on the CIF value of such imports, before clearance of such items from the Sri Lanka Customs, disregarding the threshold for ESC liability. The advance payment of ESC could be set off against the actual liability of ESC for the same year of assessment and not entitle for any refund.