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L to R: Samantha Ranatunga, Chairman, HVA Foods PLC; Jan Müggenburg, Chief Executive Officer, Müggenburg Group; Graham Stork, Chief Executive Officer, HVA Foods PLC; Sarva Ameresekere, Group Chairman, George Steuart & Co. Ltd.

Sri Lanka's cash strapped Treasury will forego Rs. 7 billion in revenue as the government scraps the value added tax component on diesel with immediate effect, officials said.
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Sri Lanka's cash strapped Treasury will forego Rs. 7 billion in revenue as the government scraps the value added tax component on diesel with immediate effect, officials said. Diesel at the pump now costs Rs. 50.00, of which Rs. 7.55 (15 percent) is paid out as value added tax.

With crude oil prices touching US$ 70 per barrel, diesel should be sold at Rs.

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58.50 in July, Ceylon Petroleum Corp.
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(CPC) Chief Jaliya Medagama said Friday.
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"We (CPC) were told by the Treasury recently to hold on to diesel prices at current levels. In return, the Treasury will forego the 15 percent VAT," he said.

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The government's generosity will also extend to Indian Oil Corp's local unit, Lanka IOC, Finance Minister Sarath Amunugama said adding that the Treasury was hoping to raise Rs. 15 billion through a tax on diesel this year.

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"Keeping diesel prices at current levels is the best thing for the moment to keep the cost of living down.

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Because any price changes have a knock on effect on transport and food pric
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