Sri Lanka cashes in on mineral sands surge

Saturday, 21 January 2012 00:37 -     - {{hitsCtrl.values.hits}}

Sri Lanka is joining to cash in on the international mineral sands and rare metals boom and is also giving relief to apparel manufacturing sector by reducing raw material import taxes.

“This will encourage the value-added industry while leading to more investment opportunities to establish new industries and increase export earnings,” said Minister of Industry and Commerce Rishad Bathiudeen.

Minister Bathiudeen was addressing Parliament on cesses imposed under the EDB Act

The new export cesses on mineral sands are mica (Rs. 1,000 per MT), ilmanite (Rs. 1,500 per MT), rutile (Rs. 2,000 per MT), titanium (Rs. 1,000 per MT) and zirconium (Rs. 500 per MT). A new cess on natural graphite exports (Rs. 10,000 per MT) has also been introduced. The 10% cess on timber logs has now been increased to 15%.

Export cess increased items are raw rubber (Rs. 12 per kg to 15 per kg), phosphate (increased from Rs. 3,000 per MT to Rs. 4,000 per MT), stones (increased from Rs. 20,000 per MT to Rs. 22,000 per MT) and granite and sand stones (HS Code 2516.11, new cess of Rs. 6,000 per MT, HS Codes 2516.12, 2516.20 and 2516.90 increased from Rs. 4,000 per MT to Rs. 5,000 per MT).

To reduce manufacturing costs, import taxes on following raw materials have been removed: Starch (HS Code 11.08), polymers and ethelyne in primary form (HS Codes 39.02, 3903.11, 3903.19, 3903.20, 3903.30, 3903.90.90 and several other HS Codes), pipes for mini hydropower projects (HS Codes 3917.29.10, 3917.40.10) and fabrics (HS Codes 52.08 through 52.12, 54.07, 54.08, 55.12 through 55.16, 58.01, 58.02, 58.11, 60.01 through 60.06).

Other taxes on imports with regard to fabrics (HS Codes 52.08 through 52.12, 54.07, 54.08, 55.12 through 55.16, 58.01, 58.02, 58.11, 60.01 through 60.06) have been completely removed. The other items that have been completely removed are VAT (12%), PAL (5%) and NBT (2%).

“The cess imposed on certain exports has been revised with the objective of discouraging export of these items in raw form and encourage value added exports. Cesses imposed on export of raw rubber, phosphate, granite, mica and timber logs have been increased while the cess on export of natural graphite, clay, illmanite, rutile, titanium, and zirconium have been newly imposed,” Minister Bathiudeen said.  International zircon prices started to increase at the end of 2010 and continued rising in 2011 and are expected to pick up again in the second half of 2012.