Sri Lankan motor traders are urging the Treasury to review the new valuation system now being implemented by the Customs as most of them are struggling to clear vehicles from the port, officials of the Ceylon Motor Traders’ Association (CMTA) said. According to Finance Ministry guidelines issued recently, Customs authorities have been empowered to assess [...]

The Sundaytimes Sri Lanka

Sri Lanka motor traders angry and perturbed over new vehicle valuation system

300 vehicles stuck in the Colombo port yard
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Sri Lankan motor traders are urging the Treasury to review the new valuation system now being implemented by the Customs as most of them are struggling to clear vehicles from the port, officials of the Ceylon Motor Traders’ Association (CMTA) said.

According to Finance Ministry guidelines issued recently, Customs authorities have been empowered to assess the valuation of the imported vehicle without considering the declared imported value creating serious problems, they added.

At least 300 new vehicles including some Montero’s were detained by the Customs due to discrepancy in the valuation made by the Valuation Committee, they revealed.

A media conference was convened by the CMTA on Wednesday to draw the attention of the authorities and all stakeholders of the motor industry to the Custom’s decision to disregard the declared transaction price and adopt a new valuation process of their own. This is based on the retail prices applicable in a foreign country, which in turn is resulting in significant damage to the motor industry.
CMTA Chairman Tilak Gunasekera, told journalists that “Sri Lanka is a signatory to the GATT agreement, which requires all signatories to base customs duty on ‘Transacted Values’. All brand new motor vehicle importers have followed this process”.

In April 2014 a gazette was enacted, stating that Customs duty will be set by the Director General of Customs, based on manufacturer values. He noted that “Customs does not adhere to manufacturers’ values. Based on this gazette, Customs immediately stopped accepting our transacted values and instead, they published a set of values that are now applicable for the payment of customs duty”.
The Sri Lanka Customs Ordinance, enacted by an Act of Parliament, requires Customs to inform the importer if they do not accept their transacted value and also to present to the importer their reasons for doubting the said value, and then giving the importer the opportunity to justify his position.

None of this has been done; instead Customs is acting against the Customs Ordinance, he alleged.

He went on to say the reason for this action was because according to the Treasury some brand new car importers were adopting fraudulent and unethical practices. There is absolutely no basis for this statement.

If there were any such instances, Customs is fully empowered to take appropriate punitive action against such errant importers after due inquiry according to the Customs law or any other law of the land.

All CMTA members have always fully cooperated with Customs in their activities in the past.

The CMTA pledges its support to Customs on behalf of all their members to expeditiously resolve, if there are, any pending matters of that nature.

“However constant changes in policy decisions inconvenience all franchise holders and hampers the progress of the motor industry which is one of the highest contributors to the government’s revenue each year”, he added. “The Customs action is putting numerous permit holders in trouble as vehicles they imported are now costing a significantly higher sum of money,” he said.

Permit holders are also incurring demurrage on their imports as Customs is not allowing importers to clear their vehicles without paying a higher duty based on the new method of valuation, he revealed.

No leeway was given for vehicles already ordered, and Customs have already adopted this gazette with immediate effect, said Gihan Pilapitiya, CMTA Vice Chairman .

“All our imports are from the manufacturer and the manufacturer’s value is the same as the transacted value or the invoiced value. We urge that these values be accepted,” he added.

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