Many of you have probably gone to a restaurant and been bewildered by the amount that the bill varies from what is on the menu.

Here are the tax categories of restaurant that you will come across in Sri Lanka.

Category 1 - Nett

Fast food or "quick service" restaurants and patisseries, and certain beach resorts whose clients are used to nett prices : where what you see is what you pay. This is applied by law in Eurozone countries, Australia and Japan. What most people want!
No calculation required.

Category 2 - Service Charge only

Single Plus (+). Small restaurants whose turnover does not make them liable to VAT, NBT or TDL, come into this category. Service charge is usually 10%.
To calculate your total cost, multiply by:
1.1

Category 3a - Value Added Tax (VAT) and Tourism Development Levy (TDL)

Double plus (++). No service charge. You are expected to leave a tip instead. This is rare. VAT 12% and Tourism Development Levy 1% thereon (cascading), totalling 13.12%.
Calculation : (1.12 x 1.01).
To calculate your total cost, multiply by:
1.1312

Category 3b - Value Added Tax (VAT) and Nation Building Tax (NBT)

Double plus (++). No service charge.You are expected to leave a tip instead. Very rare. The restaurant is not registered with the SLTDA (not eligible for TDL), but has a large enough turnover to be required to pay NBT. Usually a large Fastfood/Takeaway/Delivery/Catering-type operation. VAT 12% and Nation Building Tax 2% thereon (cascading), totalling 14.24%.
Calculation: (1.12 x 1.0204)
To calculate your total cost, multiply by:
1.1428

Category 3c - Service Charge and Nation Building Tax (NBT)

Double plus (++). The restaurant is not registered with the SLTDA (not eligible for TDL), but has a large enough turnover to be required to pay NBT. Service charge 10% and Nation Building Tax 2% thereon (grossed up and cascading), totalling 12.04%
Calculation: 1 + (0.1+2/98)
To calculate your total cost, multiply by:
1.1204

Category  4 - Service Charge, VAT, NBT, Tourism Development Levy

Four plus (++++) or "Service Charge and Government Taxes". This is the most common. Service charge 10%, VAT 12% thereon, then add Tourism Development Levy 1%  and Nation Building Tax (NBT) 2% (complicated cascade),  totalling 26.88%. 
Calculation : (1.1 + 0.01) x  1.12 x   [ 1+ {(1.02 + 0.01) x 0.02} ]
To calculate your total cost, multiply by:
1.2688

Category  4a - Service Charge, and erroneously calculated VAT, Nation Building Tax, Tourism Development Levy and CMC restaurant tax

"Service Charge and Government Taxes". Service charge 10%, VAT 12% thereon, then add Tourism Development Levy 1% (cascading) and Nation Building Tax (NBT) 2% (grossed up),  and CMC 1% restaurant tax, totalling 27.95%.
Calculation : (1.1 + 0.01) x  1.12 x   [ 1+ {(1.02 + 0.01) x 0.02} ]
To calculate your total cost, multiply by:
1.2765

Category 5 - Service Charge, VAT and Nation Building Tax

Triple plus (+++) for non-SLTDA registered restaurants. Service Charge 10%, then VAT 12% thereon, NBT 2% thereon, totalling 25.66%.
Calculation : 1.1 x 1.12 x 1.02
To calculate your total cost, multiply by:
1.2566

Category 6 - Nation Building Tax only

Beach resorts who had nett prices before 01 January 2011, are now required to pay 2% NBT.
To calculate your total cost, multiply by:
1.02
 
If a discount has been offered, before applying the multiple given, use
(1-discount percentage) first.
e.g. for 15% discount (1-0.15) = 0.85

Note:
According to the way it was gazetted, TDL should not create a cascading effect on the service charge, but most restaurants cascade it  regardless. The effect of the cascade is negligible.

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