Oriflame Lanka (Pvt) Ltd Vs. Commissioner General of Inland Revenue and others – CA WRIT APPLICATION NO. 307/2007-2011

In the case between Oriflame Lanka (Pvt) Ltd (Petitioner) and the Commissioner General of Inland Revenue and the Attorney General (Respondents), the court addressed the legality of a Value Added Tax (VAT) assessment imposed on Oriflame Lanka, focusing on the correct method of computing “taxable value” for VAT purposes. It was held that the calculation of VAT must reflect the actual consideration received by the supplier, including necessary deductions for post-supply discounts such as performance-based rebates to beauty consultants. The principle reaffirmed is that VAT liability attaches only to amounts actually received by suppliers, not notional or catalogue prices, and that beauty consultants function as consumers, not agents, in these transactions. The decision was grounded on the inte