Approval for the Regulations under the Imports and Exports Control Act, No. 1 of 1969, published in the Gazette Extraordinary No. 2370/15 which was presented to Parliament on 13.02.2024 was approved after much deliberation by the Committee on Public Finance.
The aforementioned Regulation was taken into consideration at the Committee on Public Finance held yesterday (19) which was Chaired by Hon. (Dr.) Harsha de Silva.
The said Regulation involves extending the deadline for importation of electric motor vehicles under specific HS Codes until August 31, 2024, instead of December 31, 2023 for eligible individuals.
The Committee raised concerns regarding allegations of misuse of permits issued by the Ministry of Labour and Foreign Employment, as reported in the media. They inquired about the use of facilitators for vehicle imports instead of importers. Committee members further questioned the selection process for these 12 approved facilitators. The Ministry clarified that facilitators are chosen based on specific criteria and only approved upon meeting all requirements. They emphasized that the program is not limited to these 12 entities; anyone can apply. However, Customs officials presented findings from their investigation, revealing a 15% price discrepancy. Vehicles imported through facilitators seem to be undervalued. The Committee expressed serious concerns about this process, highlighting potential fraud and a significant 15% loss in government revenue.
In response to the Ministry of Finance’s explanation of duties like excise and luxury tax on imported vehicles, Customs officials highlighted a potential limitation in Section 51 of the Customs Ordinance. This section restricts their ability to address the issue of under-invoicing. The Committee identified this as a significant legislative loophole requiring urgent amendment to prevent further loss of crucial government revenue. The Ministry of Finance representatives confirmed ongoing efforts to amend the Customs Ordinance, and Section 51 will be addressed within these amendments.
The Ministry of Finance was instructed to report on the progress of the ratification of the amendments and finalize the said within two months. Furthermore, the Ministry was also instructed to update their website with information pertaining to the imported vehicles to maintain transparency.
State Ministers Hon. (Dr.) Suren Raghavan, and Members of Parliament Hon. Rauff Hakeem, Hon. Nimal Lanza, Hon. Johnston Fernando, Hon. Mahindananda Aluthgamage, Hon. Mayantha Dissanayake, Hon. Chandima Weerakkody, Hon. Harshana Rajakaruna, Hon. M. W. D. Sahan Pradeep Withana, Hon. Isuru Dodangoda, Hon. Premnath C. Dolawatte, were present at the Committee meeting held.
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