Thursday, 19 June 2014 00:55
Ceylon Motor Traders Association (CMTA) yesterday cried foul over the Customs decision to disregard the declared transaction price and adopt a new valuation process of their own, which is based on the retail prices applicable in a foreign country.
It warned that the move results in significant damage to the motor industry.
CMTA Chairman Tilak Gunasekera said: “Sri Lanka is a signatory to the GAT agreement, which requires all signatories to base customs duty on ‘transacted values’. All brand new motor vehicle importers have followed this process. "
"In April 2014 a gazette was enacted, stating that Customs Duty will be set by the Director General of Customs, based on manufacturer values. However, the CMTA states that Customs do not adhere to manufactures’ values. Based on this gazette, Customs immediately stopped accepting our transacted values and instead, they published a set of values that are now applicable for the payment of Customs duty,” the Chairman said.
Gunasekera said that the Sri Lanka Customs Ordinance, enacted by an act of Parliament, requires Customs to inform the importer if they do not accept their transacted value and also to present to the importer their reasons for doubting the said value, and then giving the importer the opportunity to justify his position.
“None of this has been done; instead Customs is acting against the Customs Ordinance. We have made written representation through our lawyers, but yet we have not had a response. Recently, a local press article confirmed the DGC stating that Customs were determining values for duty purposes for car imports. He went on to say the reason for this action was because brand new car importers were adopting fraudulent and unethical practices. There is absolutely no basis for this statement. If there were any such instances, Sri Lanka Customs is fully empowered to take appropriate punitive action against such errant importers after due inquiry according to Customs law or any other law of the land.”
Stating that all its members have always fully cooperated with Sri Lanka Customs in their activities in the past, Gunasekera said the CMTA pledges its support to Sri Lanka Customs on behalf of all its members to expeditiously resolve pending matters of that nature, if any.
However, constant changes in policy decisions that inconvenience all franchise holders and hamper the progress of the motor industry which is one of the highest contributors to the government’s revenue each year is detrimental, he pointed out.
Gunasekera went on to say that the CMTA was holding this press conference to make known to the public the plight of the brand new car franchised holders.
“The Customs action is putting numerous permit holders in trouble as vehicles they imported are now costing a significantly higher sum of money. Permit holders are also incurring demurrage on their imports as Customs is not allowing importers to clear their vehicles without paying a higher duty based on the new method of valuation. No leeway was given for vehicles already ordered, and Customs has already adopted this gazette with immediate effect.”
Strengthening the CMTA’s plea, Vice Chairman Gihan Pilapitiya said: “The Gazette notification referred to only states that Customs duty be determined by the Director General Customs based on manufacturer values. All our imports are from the manufacturer and the manufacturer’s value is the same as the transacted value or the invoiced value. We urge that these values be accepted.”
The CMTA membership stressed the fact that the general practice of valuations being based on agent valuations have been carried on for years without any issue. They also stressed the fact that all permit imports were as per Government circular without any deviations, hence the CMTA was at a loss as to this sudden turn of events which is detrimental to the entire industry.
Outlining the CMTA’s contributions to the country, its economy and development, Gunasekera divulged the following facts: Total taxes paid to IRD (VAT/Duty/Income/Others) – Rs. 50 billion for the year 2013; employment opportunity (total work force) – over 100,000 people; Investment on facilities and infrastructure – Rs. 20-30 billion for the last five years; technical training provided for around 5,000 persons annually; amount spent on CSR projects – over Rs. 100 million for the last three years.
“In keeping with our contribution to the country’s economy and development, we strongly urge the Government to take heed of our pleas and rectify this situation with immediate effect,” said the CMTA.
CMTA, which is 95 years old and an affiliated trade organisation of the Ceylon Chamber of Commerce since 1919, is made up of all the franchise holders representing the leading automotive brands of the world.
The CMTA gives employment to over 100,000 people whilst training over 5,000 technicians and plays a vital role through the transport sector in the nation building machinery. Through training and providing employment, the CMTA has been paving the way for these Sri Lankan citizens to work internationally at international salary scales, thus contributing valuable foreign exchange to the economy. Addressing the gathering