President allows clearing of DCSL ethanol shipments
While the Government continues the ban on ethanol, it has permitted clearing a batch of pre-ordered containers belonging to the Distilleries Company of Sri Lanka PLC (DCSL) on the president’s directive.
This massive consignment of around 74 imported ethanol containers of DCSL held at the Colombo Port by Sri Lanka Customs under the ethanol import ban effective from January 1, 2020 has been released recently on the Directive of the Finance Ministry, a Customs Department official said.
The department has released these ethanol containers imported by this company after considering the reasons for the delay in the arrival of the shipment and the clearance procedure due to COVID-19 outbreak, Additional Director General of Customs Sunil Jayarathna told the Business Times.
The Treasury has directed the Customs to release the consignment of imported ethanol which had been seized at the port by department officials as the shipment arrived in the island after the date of ethanol import ban came into effect from January 1 this year.
DCSL was allowed to clear the 74 containers on condition that no more imports of ethanol will be entertained by Customs.
In a letter addressed to the Director General of Customs dated June 24, Treasury Secretary S.R. Attygalle has informed that President Gotabaya Rajapaksa has instructed to clear the consignment responding to a request made to him by DCSL Chairman Harry Jayawardena on June 11.
According to the relevant gazette notification issued on the ethanol import prohibition, importers are allowed to clear the shipments of ethanol where the import orders had been made before the effective date of ethanol import ban, he disclosed.
DCSL has made a pre-ordered shipment prior to January 1 2020 and the 74 imported ethanol containers with over one million litres of ethanol was not been cleared due to the COVID-19 curfew and lockdown.
Customs Department is empowered to lift the seizure of such consignments by considering appeals of importers, case by case.
This procedure is being carried out in accordance with two gazette notifications issued on the clearance of any imported goods for which an advance payment or order has been made before the effective date of prohibition, Mr. Jayarathna added.
The import ban on ethanol was imposed to prevent the massive foreign exchange out flow from the country; a senior Treasury official said adding that it will save a sum of Rs. 1 billion for government coffers per annum.
54 ethanol import licenses were allotted during the previous regime of which 34 belonged to distillery companies.
These companies are now compelled to purchase locally-made ethanol from three manufacturers including Pelawatta and Sevanagala Distilleries which produce sugarcane-based ethanol, he said.
The Treasury has received excise revenue of Rs. 130 billion from the liquor industry and DCSL paid Rs. 58 billion in taxes to the government last year.
Asked to comment, DCSL Chairman Harry Jayawardena told the Business Times that his company imported the 74 containers of ethanol placing the necessary import orders with its foreign buyers and opening LCs during the October 2019, way before the new January 1, 2020 suspension of the importation of ethanol,
Proper procedure has been followed as the ethanol import license holder and all import duties and levies paid for the clearance of the consignment, he said.
But there was delay in releasing the containers due to the COVID-19 curfew, he said adding that everything has been done legitimately and there was no issue with the government.
DCSL used to import one million litres of ethanol per month mainly from South Africa, Pakistan, and Australia, in addition to purchasing the local product.
(BS)