Senvec Lanka (Pvt) Limited vs Commissioner General of Inland Revenue – TAX 11/2010-2024

In the case between Senvec Lanka (Pvt) Limited and the Commissioner General of Inland Revenue, the court addressed the issue of whether the Appellant acted as an agent or as a principal under the Sole Agency Agreement with Hattori Seisakusho Co. Ltd., Japan, and whether the commission earned was for services consumed outside Sri Lanka for the purposes of zero-rating under Section 7(1)(c) of the VAT Act. It was determined that the Appellant functioned solely as an agent and that the commission related to services consumed outside Sri Lanka, thereby entitling the Appellant to the exemption. The decision reaffirmed the principle that contractual interpretation and the actual conduct of the parties are paramount in distinguishing agency from principal arrangements for tax purposes. Reliance wa