Asian Paints (Lanka) Limited vs. Mr. Sarath Jayathillake and Mr. E.M.D.B. Ekanayake – CA WRIT APPLICATION NO.807/2008-2008

In Asian Paints (Lanka) Limited v. Mr. Sarath Jayathillake, Director General of Customs and Excise (Special Provisions) Division, Sri Lanka Customs, and Mr. E.M.D.B. Ekanayake, Director of Excise Duty, the court addressed the computation of excise duty under the Excise (Special Provisions) Act, No.13 of 1989. It was held that excise duty on locally manufactured paint must be calculated based on the wholesale price exclusive of the Value Added Tax (VAT) component. The ruling reaffirmed the principle that VAT, being a distinct tax collected from the consumer and remitted by the supplier separately to the state, should not be treated as part of the excisable value for the purpose of computing excise duty. Reliance was placed on statutory interpretation of the Excise (Special Provisions) Act a