CMTA calls for urgent recall of vehicle valuation and import processes

THE Ceylon Motor Traders' Association (CMTA) has highlighted the fact that Sri Lanka's vehicle import framework requires urgent recalibration to ensure fairness, transparency, and the protection of State revenue.

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The CMTA stated that one of the most critical issues that must be addressed is the automatic 15% reduction applied to the Cost, Insurance, and Freight (CIF) value of used vehicle imports when calculating import duties. The CMTA maintains that duty calculations should be applied uniformly across all importers, whether the vehide is brought in through an authorised agent as brand new or through a dealer as a used import. For example, if an authorised agent imports a 2026 zero-mileage vehicle of a particular brand at a CIF value of $50,000, the full value is used for duty assessment. However, if a dealer imports the exact same 2026 model, also zero mileage and identical in specification, but registered and subsequently de-registered prior to shipment, the CIF value for duty purposes is reduced by 15% to $42,500. This concession is granted solely because the vehide is technically dassified as "used" due to prior registration, despite there being no practical difference in mileage, condition, or specification between the two vehicles.

The CMTA believes this practice creates a structural imbalance in the market and results in a significant erosion of import duty revenue to the State. When two identical zero-mileage vehicles are assessed at different CIF values purely on the basis of a procedural registration classification, it distorts competition, disadvantages compliant authorised agents, and undermines equitable tax collection.