Extend clearing date for vehicle LCs opened before 31st Oct. 2019
Firstly we wish to thank the Government for granting vehicle permits to Government Servants to import vehicles of our choice at concessionary Customs duty rates.
We are writing with regard to the luxury tax introduced on November 1, 2019 and concessions given to us who opened LCs before October 31, 2019.
We decided to order the vehicle based on the media release dated October 29 that was published in the Finance Ministry web site, signed by the Information Director, Mohamed Ali Hassan of the Finance Ministry. According to this statement, it was mentioned that the vehicles can be cleared through Customs before April 21, 2020.
Based on the above information provided, we opened an LC for a Mercedes Benz GLB New Model. Though it is a Mercedes Benz, it is a 7 Seater Family SUV and has a 1.3 L small engine that suits the basic family needs. This model is being released in the UK, end February 2020. Taking into consideration time taken for shipment etc, we assumed we could clear the vehicle before the April 21 deadline.
Subsequently a circular was released on November 1, 2019; by the Finance Ministry signed by the Minister Mangala Samaraweera that the final date to clear from Sri Lanka Customs was March 31, 2020, advancing it by three weeks from the previous April 21. Both circulars are still available on the Finance Ministry website.
Generally, when the Government publishes a regulation change, the usual procedure is to extend the dates accordingly. However in this instance they have advanced the time limit within just three days after the initial media release. The common practice is when subsequent circulars are issued and if a time limit is mentioned, dates are extended accordingly. Subsequently circulars are not issued advancing dates. Thus they have inconvenienced the permit holders. We solely depend on the manufacturer which in this case Mercedes Benz as their release dates and shipment dates are totally in their control.
The new Mercedes Benz GLB Model currently fetches a Customs Duty of Rs.1.4 million based on the old rates. However with the inclusion of the luxury tax of Rs. 3.2 million the total duty amount is around Rs. 4.6 million! We will now have to pay Customs Duty beyond what we can afford. When compared to the old tax with the new tax there is 225 per cent increase much more than what we had planned. If we were aware of this haphazard increase of Customs Duty we would not have planned on importing this GLB Model of the Mercedes Benz.
We do thank the government and appreciate the new amendment issued in the gazette of December 14, 2019 allowing amendments to the LC such as changing the vehicle model etc. However the deadline for the clearing remains the same as March 31. Even though this new amendment has been issued we in this case are unable to request for a change of vehicle, as new vehicle orders take 3-4 months to deliver. The Model GLB is a new release and we are not sure of when the actual release date will be. Further there is no time now to order another similar vehicle for our permit as there is only two months left.
We kindly request the government to give due consideration to the above mentioned facts and below. Would very much appreciate if point No. 1 is given priority:
1. Extend the clearing deadline till May 31 as the delivery for GLB vehicle might take some time from the initially announced date as it is a new model.
2. Please consider the Bill of Lading date as April 21 when doing any amendments if possible as some ships take more than the stipulated time of four weeks to reach Colombo from the UK due to various reasons which are beyond anyone’s control.
3. If the first two options are not possible, at least make the Bill of Lading date as March 31 as the deadline instead of the clearing date as March 31.
We hope that our new Prime Minister/Finance Minister will look into the matters mentioned above as he is known to be a people friendly PM and give us and others affected the requested relief.
Affected group of professionals