Sri Lanka vehicle prices to increase with new customs valuation basis

car

Oct 08, 2015 (LBO) – Sri Lanka’s finance minister has signed an extraordinary gazette to change the basis on which customs calculates the value of certain motor vehicles, and prices of some vehicles may increase by almost 50 percent, car dealers said.

With this order the actual transacted FOB value of the vehicle has been excluded from the new valuation criteria and Sri Lanka Customs will use a predetermined value in order to apply relevant customs duties.

As per the above gazette notification, issued on September 22, customs value of certain motor vehicles imported should be the aggregate of the following four items.

(1) Customs value, determined by the Director General of Customs based on the price furnished by the manufacturer of such vehicle.
(2) Cost of transport to the port of Sri Lanka.
(3) Loading, unloading and handling charges associated with the transport to the port of Sri Lanka.
(4) Cost of insurance to the port of Sri Lanka.

When compared to the early gazette notification published on 10 February 2015, there is only one major difference which affected the first item above.

(1) Higher of the two alternative values of (i) and (ii) below;

(i) Price determined by the Director General of Customs based on the price furnished by the manufacturer of such vehicle:

(ii) Actual Transacted Free On Board (F.O.B.) value of the vehicle. Transacted value shall include local charges of every description incurred until the vehicle reaches the port in Sri Lanka.

It is clear that the actual transacted FOB value of the vehicle has now been excluded from the new criteria.

Sri Lanka Customs will use a predetermined value in order to apply relevant customs duties, back dated to 17 September 2015. The effective date was then verbally postponed to 30 September 2015.

For instance as per Sri Lanka Customs data, 1800 cc 4 Cylinder PRIUS has a FOB value of 3,497,237 Japanese yen and that figure will be used as the base for their valuation.

2400 cc 4 cylinder RAV 4 has a value of 2,591,714 Japanese yen, while 2700 cc 4 Cylinder PRADO has a value of 3,956,727 Japanese yen.

According to the provisions of the gazette, these numbers are based on the prices furnished by the manufacturers of these vehicles. But the exact way as to how these predetermined values are obtained is undisclosed.

Kokila Deekiriwewa, a lawyer by profession and Co-President of Lanka Vehicle Importers Association told LBO that these values are arbitrary.

“These are baseless figures with just high values. These should be ‘based’ on the prices of manufacturers not ‘beyond’ their prices,” he said.

“As an example, you’ll have to pay more than 800,000 rupees to clear an imported Aqua car because of this.”

As per the new gazette same value will be applied for older vehicles and newer vehicles of the same model.

“Whether it is manufactured in 2012 or 2015, same duty will be applied.” he said.

In terms of Article 10 of the Customs (Amendment) Act No. 2 of 2003, the minister has the power to set minimum values on goods in order to charge custom duties on such minimum values.

“So, the DG of Customs or any other official has no power to set values; it should be done by the minister himself through a gazette and it’s not transferable,” he said.

“It is unfair to decide arbitrary values using several customs officials,” he further stressed.

The relevant gazette notification and the customs value of Japanese Motor Vehicles determined in terms of this gazette is reproduced below.

1933_16-E

The Customs Value of Japanese Motor Vehicles Determined in terms of G/N No.1933/16 of 22.09.2015. (Visit customs official website to view values related to other motor vehicles.)

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Shan
Shan
6 years ago

What About Vagon R prices???

expat
expat
6 years ago
Reply to  Shan

these lists aer by make. this is the list of toyota vehicles (8 pages). customs web site has other makes like bmw merc etc.

can we alter the laws to hang morons also ? please please

i just saw the merc list. why the hell do we need to bring an AMG S 65 ??????

a frnd or mine has the top of the range coupe (not in sri lanka). it is a 6.3 liter 12 cylinder brute.

where would u drive such a car in sri lanka?

these donkeys have no idea what vehicles suit our roads and the LAWS.

max speed in city – 56kmph. in country – 72kmph. on highway – 100kmph only in some places, else it is 80kmph.

the merc amg s 65 has acceleration of 0 to 60mph in 4 seconds. that is just in 2nd gear !!!! its max speed is listed as 185mph ( that is almost 300kmph!!!!)

the fastest i experienced with my frnd is 200kmph and it was scary.

why the hell would anyone be allowed to bring such a vehicle to sri lanka???

dilky
dilky
6 years ago
Reply to  expat

don’t be jealous of your own friend bro.

expat
expat
6 years ago
Reply to  dilky

if u saw his car collection (7) u would be jealos too LOL

shyabith
shyabith
6 years ago
Reply to  expat

I went through the customs site but couldn’t find other vehicles list. If possible can you share that link with me? thank you.

jagath
jagath
6 years ago
Reply to  Shan

yes i want to know what about wagon r prices

JilBola
JilBola
6 years ago
Reply to  jagath

Let me speak to RK abt your WagonR !!!!
🙂

Abdul Hameed
Abdul Hameed
6 years ago

Government is crook. UNP is same boat as SLFP. Can you tell me in which country Ministers get permit free of taxes, where as people pay 100-300% in taxes. What a country? Most countries charge 5-15 % taxes for imports. That is why when tax was lowered people bought more cars. Because people cannot predict government policy.

NPathirana
NPathirana
6 years ago

While all these are Free for Politicians, Govt servants who never pay Income tax. What a Country ? What a discriminative policy ?Why someone dont goto courts about these Duty Free permits and Some people exempted from Income tax (Like Govt Servants) ???

Even Govt servants get 66.66% Price reduction on train tickets. Is Govt servants are very exclusive class ?

If taxes to be adjusted it should be done with a policy and little by little, without affecting so much suddenly.,

expat
expat
6 years ago
Reply to  NPathirana

LOL ma8 , the “COURTS” are also part of the government apparatus !!!!

who in their right mind would say know to a gift horse 🙂

Jayasoriya
Jayasoriya
6 years ago

What is this financial policy. Actually any government not charging tax like this base. Tax charging must be fare and reasonable. What this policy charging tax on more than the valve of the item. This is dispute of the international trade. How government valve the item, more than the MKT valve for tax base.
This is not financial policy. He want to give punishment to the public for spending on car.He want to provide tax free for Politician and have luxary life for them . For that he is collecting money

rookie
rookie
6 years ago

this is plain stupid
in sri lanka – 95% people buy cars that can have best resell value and best fuel efficiency. When people are buying hybrids that’s quite good than someone buying diesel or petrol driven car. What about the electrics? we need to reduce our import bill on fuel and these guys go and raise tax on fuel efficient cars! no one will stop importation as having a car has become a social pride/status in sri lanka. even if u cant find money to eat/stay – they will have a car and a fancy mobile phone!!

the govt employees has to pay tax and there cannot be discrimination – we all work hard for our living and we dont get govt aid! so why the discrimination? because govt officials get paid on the taxes the masses contribute and in return govt provides service.

why doesnt the govt invests in agri culture and increase production? why we still import? we proudly say of our rich culture of self sufficiency but where has these gone now a days?

in developed countries you would find only a lower % use own vehicles – and vast majority are on a superior public/private transport on metro or rail. Sri Lanka – well we need to have a car else we dont go on time….

Dil
Dil
6 years ago

Government should provide sufficient time before making any policy changes. I ordered my first car in my life. now it was stuck in the port. I opened the LC on 22nd September. but goods were shipped on 16th September. I don’t know what is going to happen.

Dear Minister of Finance,
Pls implement your changes from 1st of October. Being a responsible accountant, pls give adequate time for general public before policy decision. Don’t be harsh like a previous government.

Tx

yaha pala
yaha pala
6 years ago

RK want to find the money looted by MR and VIP family. Blame and Flame the dreams of public. It’s so unfortunate that we have uneducated Ministers in the Finance Ministry.

pathirana
pathirana
6 years ago

what about honda fit shuttle 1.3 duty??

Jagath
Jagath
6 years ago

Hey Ravi Karunanayaka, You are not a good financial minister.
Evan you can’t read well “sihinala language”.
Are you a Muslim guy?

idiot
idiot
6 years ago
Reply to  Jagath

sas there is a language called Sinhala and majority communicate with it.
If Ravi k is not good in it he should have done in english

Sas
Sas
6 years ago
Reply to  idiot

I am still searching for a language called “sihinala”
Only thing I get is potatoes.