Indian small cars to benefit; trishaws most hit from Lankan import duty changes

Monday, 30 May 2016 00:47 - - {{hitsCtrl.values.hits}}

Indian small cars are to benefit from Sri Lanka’s last week import duty changes though the dominating three-wheelers will be hard hit, according to the Press Trust of India.

Sri Lanka has reduced import duties on cars with an engine capacity of 800 and 1,000 cubic centimetre (cc) while increasing duty on higher engine capacity cars, a move likely to benefit India-made smaller vehicles.

The prices of vehicles with an engine capacity above 1,000cc will increase following the increase of the minimum unit tax from yesterday, Sri Lanka’s Vehicle Importers Association said.

According to a gazette notification released by the Ministry of Finance, the 800 and 1,000cc cars will have a lower import tax band.

A majority of this category’s imports are dominated by Indian-made cars. An example of this is the Indian-made Maruti Wagon-R.

The tax range for such cars is expected to come down from its present tax range of 1.5 -1.6 million Sri Lanka rupees to about 1.35 million, car dealers said.

However, the Indian-made three wheeler auto taxies have been hit by a raised band and will have an increased rate of customs duty, the dealers said.

Rich users of SUVs are the worst-hit, with the import tax on one particular brand, which stood at about 5.4 million Sri Lankan rupees, rising up to above 7.6 million Sri Lankan rupees.

This will raise the market price by about 13 million additionally, the dealers said.

Dwindling foreign reserves have forced the Government to curb vehicle imports by imposing higher taxes.