Vehicle imports to drop by about 90 percent after govt regulations

Sri Lanka's vehicle imports will drop by at least 90 percent after the government changes the way it calculates the value of certain motor vehicles, officials said on Friday.

The Indian Ocean island nation is trying to discourage unnecessary imports in a move to prevent dollar outflows and further weakening of the rupee currency.

Pressure on the currency has intensified after the central bank effectively floated it on Sept. 4. It has fallen 4.6 percent since then.

The finance ministry in a special gazette notification on Sept. 22 changed the basis by which customs will calculate the value of vehicles to one that is determined by the price provided by the manufacturer.

Previously, valuations were made based on the higher of two figures: the price determined by the director general of customs based on prices furnished by the manufacturersor the actual transaction value of the vehicle.

"Vehicle imports will drop by about 90 percent, that may be the intention of the people who created this," Kokila Deekiriwewa Co-President of the Vehicle Importers Association of Lanka told Reuters.

"Now, customs arbitrarily decides the valuation of vehicles on top of the rupee depreciation and other government regulations to discourage vehicle imports. So this will increase vehicle prices drastically."

On Oct 2, the finance minister also imposed a 100 percent margin on letters of credit (LC) for motor vehicles.

The cost of importing vehicles in the first seven months almost doubled to $744.4 million, central bank data showed.

The balance of payments during the first seven months of 2015 is estimated to have been in a deficit of $1.21 billion, compared with a surplus of $2.02 billion in the same period last year. (Reporting by Ranga Sirilal; Editing by Kim Coghill)

Source : http://in.mobile.reuters.com/article/idINL3N12923720151009

වාහන සඳහා බදු ඉහල දැමීමට හේතුව

ජපන් වාහන ශ්‍රී-ලංකාවට ගෙනඒම අවමකිරීම සඳහා කටයුතු සැලසීමට හේතුවූ කාරනාව වශයෙන් මුදල් අමාත්‍යවරයා ප්‍රකාශ කරන්නේ ඉදිරි දින 90 ක කාලය ඇතුළත දැනට වැඩිවි තිබෙන ඩොලරයේ අගය රුපියල් 130කට ආසන්න අගයක් දක්වා පහත වැටීමට නියමිතව ඇති බවයි.

ශ්‍රී-ලංකාවට ලැබීමට නියමිතව ඇති විදේශ ආධාර ප්‍රමාණයත් රුපියලේ අගය ස්වාභාවික ලෙස ස්ථාවරවීමට ඉඩහැරීමත් තුල මෙම තත්වය ඇතිවනු ඇති බව ඔහු ප්‍රකාශ කරයි. නමුත් මේ මොහොතේ වැඩිපුර වාහන ගෙන ඒම තුල ජනතාවට වැඩි මුදලක් ගෙවීමට සිදුවීම හේතුවෙන් වාහන ආනයනක කිරීම අධෛර්යය කිරීම සඳහා මෙසේ බදු පැනවීමට තිරණය කරනලද බව වාර්ථා වේ.

එමෙන්ම එළැඹෙන අයවැයත් සමඟ ආණයනික බදු අඩුකරනවාට අමතරව නව වැඩපිළිවෙළක් යටතේ ජපන් වාහන තොගයක් එකවර ගෙන්වන අයට අමතර වාහනයක් සඳහා විශේෂ සහනයක් ලබාදෙන වැඩපිළිවෙලක්ද සකසා තිඛෙන බව වාර්තා වන අතර මේ අනුව වාහන මිල තවත් පහල යනු ඇති බව අපේක්ෂිතයි.

Source : http://theceylon.net

Custom Valuation of Vehicle List

Motor Vehicle List with new FOB values

Bens http://www.customs.gov.lk/news/fob151002.pdf 

Landrover http://www.customs.gov.lk/news/fob2.pdf 

Mitsubishi http://www.customs.gov.lk/news/fob3.pdf 

Audi http://www.customs.gov.lk/news/fob4.pdf 

BMW http://www.customs.gov.lk/news/fob5.pdf 

Toyota http://www.customs.gov.lk/news/fob6.pdf

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.

Source : http://www.lankabusinessonline.com/sri-lanka-vehicle-prices-to-increase-with-new-customs-valuation-basis/

Japanese cars hit the sky

Through the Gazette notification No. 1933/16 pertaining to imposing Customs duties, the government has announced new Customs duties on Japanese motor vehicles like Toyota and others imported to Sri Lanka.

Accordingly, the Customs duty on a Toyota Aqua vehicle has been increased by Rs. 770,000while the duty on a Toyota Axio vehicle has been increased by Rs. 703,000.

Furthermore, the Customs duty on a Toyota Hiace Petrol vehicle has been increased by Rs. 1,365,000 and a Toyota Hiace Diesel vehicle by Rs. 1,700,000.

Similarly, the Customs duties on Toyota Premio/Allion vehicles have been increased by Rs. 675,000 and Toyota Prius motorcars by Rs. 1,120,000.

Also, the Customs duty on a Toyota Harrier has been upped by Rs. 1,150,000 while on a Mitsubishi Outlander the duty has gone up by Rs. 852,000.

The duty increases on these vehicles are given in the following Table:

Commenting on this, Sri Lanka Motor Vehicle Importers’ Association president Indika Sampath Merinchige said that the prices of these vehicles would increase in accordance with these Customs duty increases.

He also added that due to the duty increase on Japanese vehicles, the prices of Indian manufactured vehicles too would increase.

Source : http://bizenglish.adaderana.lk/exclusive-duty-increase-on-japanese-cars-hit-the-sky-aqua-up-by-7-lakhs-prius-by-11-20-lakhs/