Sri Lanka Customs revises vehicle valuation twice within a month
Sri Lanka Customs has revised the vehicle valuation for the second time within a month based on actual manufacturers’ value of brand new vehicles cancelling the previous ad hoc valuation system which was introduced on September 30. The new revision in the basis on which Customs calculates the values of imported vehicles for the imposition of taxes came into effect from November 11 following the pressure exerted by vehicle importers’ associations, motor traders told the Business Times on Wednesday, two days before the November 20 budget presentation.
The prices of vehicles which were increased around 50 per cent under the previous valuation system will come down under the new valuation but motor traders were not in a hurry to import vehicles on the eve of the 2016 budget, they added.
Customs has published the new values of vehicles based on its origin and the mode of local distribution in its web site on recommendations made by the Valuation Committee, a senior Customs official said. These values tally with the vehicle value book and the Japanese vehicle guidebook and it is acceptable worldwide, Mahesh L.Ganwani, Director – Lekhraj Automobiles Pvt Ltd told the Business Times. He added that the Customs has revised the previous valuation criteria of using a pre-determined value in order to impose relevant customs duties, but it will not have an immediate impact on the local car market on the eve of 2016 budget (which was presented on Friday.)
The prices of imported Japanese vehicles have come down considerably, he said citing an example where the price of a Toyota Aqua rose by Rs. 770,000. But, with the new ‘Free-On-Board (FOB)’ value, its price will come down by around Rs. 500,000.The reason for this price reduction is that the Sri Lanka Customs has brought down the (FOB) value of the vehicles he added. But traders cannot pass this benefit to customers as they have imported vehicles by opening LCs before September and the value of those vehicles had been determined under the previous valuation criteria.
Meanwhile the Ministry of Finance is in the process of redefining “local handling charges” and items to be included therein, a senior official said.
Severe penalties including cancellation of import licence will be imposed against motor traders for under invoicing, he added.
Where there is no published value for a vehicle, importers must obtain values from Sri Lanka Customs prior to importing, he said.