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New formula for Customs valuation of motor vehicles: Finance Ministry
The Finance Ministry has announced a new formula for Customs valuation of motor vehicles.
The Customs value of motor vehicles henceforth will be based on four items, namely the Customs Value determined by the Director General of Customs, based on the Price furnished by the manufacturers of such vehicles, cost of Transport to the port of Sri Lanka, Loading, Unloading and Handling Charges associated with such transport, as well as cost of Insurance to the port.
The relevant gazette issued yesterday is effective from September 17 and will continue until further notice.
However, for the purpose of determination of Customs value of motor vehicles imported based on the Letter of Credit(s) established on or before September 16, this new formula of valuation will not apply.
The Sunday Times reported last week that undervaluation of vehicles by importers had deprived State coffers of around Rs 64 billion in revenue by way of duty and taxes, during the past nine months.
The new regulations are aimed at preventing importers, including small scale car importers, from undervaluing the imported vehicle, claiming it does not have all the options mentioned in the original vehicle.