Lanka Marine Services (Private) Limited v. Commissioner General of Inland Revenue – CA TAX/0008/2007-2022

In the case between Lanka Marine Services (Private) Limited and the Commissioner General of Inland Revenue, the court addressed whether the supply of bunker fuel to vessels within Sri Lanka qualifies as an “export” under Section 7(1)(a) of the Value Added Tax (VAT) Act, No. 14 of 2002, thereby entitling the supplier to zero-rated VAT treatment, and whether the Assessor provided adequate reasons as required by Section 29 of the VAT Act in rejecting the taxpayer’s claims. It was held that supplies of bunker fuel to vessels do not constitute exports for VAT purposes in the absence of clear evidence that such goods are destined for a foreign location. The reasoning reaffirmed the principle that zero-rating applies only where actual export is substantiated by documentation of foreign destinatio