The VAT amendment act envisages an additional income of 100 million dollars to the state.

Seneviratne says the VAT is applicable to sweet-flavoured and imported milk powder only.

The two pc NBT remains unchanged, but it will apply to businesses with a quarterly turnover of Rs. three million, down from Rs. 3.75 million.

The Finance Ministry says the 15 pc VAT and the NBT will come into force on November 01.

For wholesale and retail businesses, the VAT is applicable for those with an annual turnover of Rs. 50 million, or a quarterly turnover of Rs.12.5 million.

For other businesses, it is Rs. three million per quarter, or 12 million per annum.

The VAT applies for cigarettes, liquor, telecommunication services, electrical appliances, perfumes, milk powder, health services (channeling and room charges).

A list of 82 consumer items and services exempted from VAT has been announced.