Wrong Turn

Indian based Ashok Leyland says it plans to turn empty space at its local factory into a service centre, with as much as 50 percent of its current capacity lying idle. Indian based Ashok Leyland says it plans to turn empty space at its local factory into a service centre, with as much as 50 percent of its current capacity lying idle.

The company no longer assembles commercial vehicles like buses at its factory here in Homagama after it lost a 10 percent tax advantage over imported heavy vehicles about four years ago.

“Over the past few years the Sri Lankan government has removed all concessions so there is no particular merit in assembling vehicles here. It is cheaper to import it fully assembled than import a knocked down vehicle,” R.J. Shahaney, visiting Chairman of Ashok Leyland India, said on Friday.

About four years ago heavy vehicles assembled locally enjoyed a 10 percent tax advantage over fully assembled imported vehicles that were taxed at 20 percent.

This was later lifted and both assembled and imported vehicles are now under a flat tax rate of 2.5 percent, the manufacturers want lifted.

“This effectively removed our 10 percent advantage