Govt. relaxes restrictions on sanitaryware imports via new gazette

• Move follows amicable resolution of issues between local manufacturers and importers to support key sectors of housing and construction 

The Government yesterday relaxed restrictions on sanitaryware imports via an Extraordinary Gazette No. 2214/56 of 11 February.

Finance Minister Mahinda Rajapaksa issued the new Gazette in terms of the powers vested in him by Section 20 read together with Sub-Section 4(1), Section 6 and Section 14 of the Imports and Exports (Control) Act, No.1 of 1969 as amended by Act No. 48 of 1985 and Act No. 28 of 1987.

As per the regulations titled ‘Imports and Exports (Control) Regulations No. 03 of 2021,’ the Imports and Exports (Control) Regulations No. 02 of 2021 published in the Gazette Extraordinary No. 2213/8 has been repealed.

Selected ceramic goods (classified under the HS Headings of 69.06 and 69.10), as stipulated in the Schedule II, can be imported based on a minimum of 180-days foreign supplier’s credit facility or any other foreign based credit facility, “effective from the date of Bill of Lading or Air Waybill of the said goods.

The products include ceramic pipes, conduits, guttering and pipe fittings, ceramic sinks, washbasins, wash basin pedestals, baths, bidets, water closet pans, flushing cisterns, urinals and similar sanitary fixtures. Imports cater to 50% of the local sanitaryware demand but restrictions were imposed as part of measures to contain the outflow of foreign exchange amidst COVID-19 pandemic-led shocks to the economy as well as promote greater domestic manufacturing.  

The Daily FT on Monday exclusively reported that manufacturers and importers of sanitaryware in a welcome sign of unity reached a compromise to ensure free availability of their products in tandem with increased demand.

This was after the two sides met on Friday to discuss a resolution to the issue relating to import duty and CESS applicable on imports, as well as the support to promote domestic manufacturing. 

Following deliberations, both parties reached an amicable settlement which industry analysts described as “win-win” for all. 

Importers have agreed for an increased Customs duty of 30% as against 15% at present. In terms of the CESS, a flat rate of Rs. 125 per kilo has been agreed. At present, certain sanitaryware products enjoy zero CESS and others are charged at 15% or Rs. 40 per kilo. 

In response the main Opposition MP Dr. Harsha de Silva tweeted that increased in Customs duty and CESS decided by a ‘politically powerful oligopoly’ and some sellers will impact consumers. “Big tariff walls will never create efficiencies,” he added.

However, following the compromise, the Sri Lanka Ceramics and Glass Council, and the Tiles and Sanitaryware Import Association, jointly wrote to President Gotabaya Rajapaksa conveying the breakthrough.

They said the amicable resolution was in view of the President’s ‘Saubhagyaye Dekma,’ which specifies that special attention be given to locally manufactured items and to increase local manufacturing capacity to satisfy the market demand. “We also have taken into account where there is a shortage of sanitaryware available to the public to allow the importers to meet this demand,” the joint letter to the President said.

The two Associations have requested the President take into account the agreement reached and to instruct officials to amend the present duty and CESS on imports and gazette accordingly.

In response the Government yesterday issued the new Gazette.

The resolution follows the Finance Ministry last week publishing a note indicating the relaxation of tile imports and the next day, the Controller General of Imports and Exports repealed to ensure support for local manufacturers is intact. 

With the amicable resolution, restrictions are to be lifted, paving the way for free availability of sanitaryware products in the market.