Tax Dispute

Sept 03, 2008 (LBO) – Sri Lankan ship owners say a recent Supreme Court decision has resolved a long-standing dispute they have had with customs over import tax on ships.

To receive instant alerts from LBO on your Dialog mobile type ‘lbo’ and send to 678

According to the recent ruling, ships cannot be considered an import when sailing into Sri Lanka, and therefore not liable for import tax charged by customs.

“The Supreme Court in a landmark judgement stated it cannot hold that a vessel arriving in the ordinary course of navigation carrying goods onboard falls within the definition of ‘imported goods’,” said Mohamed Reza of Sri Lanka Shipping.

The company was one of the ship owners along with the Lanka Association of Ship Owners (LASO) that had contested the customs interpretation of the law to charge import tax on vessels.

The court ruling was with regard to an action filed by ship owner Vallibel Lanka.

Independent action in court by others including LASO are still pending.

Reza said the Supreme Court, in the matter of Vallibel Lanka, held that there is no provision in the Customs Ordinance for a sailing sh