Monday Nov 24, 2025
Monday Nov 24, 2025
Monday, 24 November 2025 06:09 - - {{hitsCtrl.values.hits}}
The Court of Appeal has issued notice on the Commissioner General of the Inland Revenue Department (IRD) and other State agencies after a writ application challenged the legality of the Government’s newly gazetted VAT refund scheme, which replaced the abolished Simplified VAT (SVAT) system.
The move comes amid warnings from exporters that the current framework could delay refunds and trigger serious cash-flow pressures.
The case was called before the Court of Appeal on 20 November. Counsels Boopathi Kahathuduwa and N.K. Ashokbharan, appearing for multiple chambers, told the Court that the IRD had issued Gazette No. 2456/02 dated 29 September 2025, which they argued does not meet the statutory requirements of the VAT Act.
They submitted that exporters now fear they will be unable to obtain timely VAT refunds, despite the law requiring an automated, risk-based refund mechanism to be operational from 1 October 2025 following the abolition of the SVAT earlier this year.
After hearing submissions, the Court determined that the application disclosed sufficient prima facie grounds and issued notice on the respondents, including the IRD, the Board of Investment, and others.
During the proceedings, the Attorney General, representing the State respondents, informed the Court that the IRD intends to publish further guidelines that may address the concerns raised by the petitioners.
