A new circular for importing vehicles in terms of trade and investment was recently introduced by the Finance Ministry. The circular was issued as a result of the changes made to the existing policy in accordance with the decisions made at the May 2nd cabinet meeting.
The new circular actively affects vehicles imported since June and is applied for senior executives in management and administration at state institutions and state co-operatives. Furthermore with regard to the new circular for vehicle imports, the minister went on to say that “The Trade Agreement Policy Circular No.01/2016 dated July 14, 2016 governs the import of vehicles for senior level executives grade administrative positions in state sector.”
The new regulations
The total price which entails the cost of the vehicle, freight (CIF) value and the insurance premium should be below USD 25,000 for any buyer of an imported or a locally-assembled vehicle to transfer the ownership before the end of a five-year period since the first registration.
The regulation further states that any vehicle that was cleared from the Customs before May 31st 2017 and any duty waivers that were allowed between November 20th 2015 until May 31st 2017 are restricted from the transfer of ownership before the completion of five years since the first registration.
Moreover, taxation is fully embraced by the vehicle permit holder for vehicles either imported or locally manufactured.
Tax relief amounts as follows:
According to the ministry, If the vehicle is worth less than USD 25,000, the tax implied is 35 percent with a tax relief of 65 percent. However, if the vehicle is worth between USD 25,000 and USD 30,000, the tax payable is 40 percent with a relief of 60 percent.
Finance Ministry issues New Circular for Vehicle imports
CMTA concerned on assembling vehicles locally
The Ceylon Motor Traders’ Association (CMTA) in a statement has raised concerns about the recent decision by the government, where it allowed the assembling of motor vehicles locally by using imported second hand spare parts.
According to the CMTA, the apex body representing the manufacturers of the global automobile brands in Sri Lanka, this decision by the authorities will jeopardize the safety of motorists, the general public and also contravenes existing Customs regulations which only permit the import of vehicles that have been used up to a maximum of three years from the date of the first registration.
The Association said the danger of allowing this to follow on is that the unsuspecting motor vehicle buyer would not know the year of manufacture of these so called assembled vehicles.
“A car manufactured 10 years ago can be issued with the latest registration number plates from the RMV.” -CMTA
The CMTA also believes that a 10-year old vehicle will not have the relevant spare parts necessary for repairs and maintenance of a vehicle, as the guarantee of spare parts from the manufacturer will only be valid between 10-15 years from the date of manufacture.
The Association highlighted that in the event of a major accident, the engine number and chassis number would not relate to the manufacturer's' records, thus causing security concerns. The status of registration will also be ambiguous and will therefore cause further legal complications.
The CMTA also believes that such a move would create many environmental concerns as well as safety concerns, as well as contradicting the government's long term policy of standardizing vehicles with brand new vehicle imports.
LOCAL NEWS
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