By Mandana Ismail Abeywickrema
The Carlton Motor Sports Club has imported 19 vehicles to the country under special approvals without paying duties amounting to over Rs. 200 million for the Colombo Night Races.
The millions loss in revenue to the state coffers due to the importation of these vehicles under special approvals could have helped ease the country’s burgeoning budget deficit.
These vehicles have been imported to the country between the 4th and 11th of the month when the country’s hapless masses were trying to come to terms with the government’s 2013 budget that failed to ease the burdens shouldered by them.
President Mahinda Rajapaksa presenting the 2013 budget said the government will keep the budget deficit at 5.8 percent of GDP in 2013, and a 2012 target of 6.2 percent will be maintained despite falling import tax revenues. The government is hopeful of reducing the budget deficit to 4.5 percent of GDP by 2015.
Given the current scenario, the government would be able to achieve these ambitious targets by increasing its revenue through direct and indirect taxes, which are mainly paid by the ordinary citizens in the country.
The loss of over Rs. 200 million by the government at present could be considered a monumental loss of revenue.
The 19 vehicles that were imported include two Lamborghini Gallardos, a Porsche 911 GT3 (3,900 CC), an Aston Martin N24 (3,500 CC), a Nissan Fairlady (3,500 CC), a Honda Civic (3,500 CC) and 13 Etios motor racing cars (one 1,197 CC vehicle and 12 1,496 CC vehicles). All these vehicles have been imported by Carlton Motor Sports Club at 123, Bauddhaloka Mawatha, Colombo 4 and cleared by GAC Logistics Limited in Colombo 2.
The duties for the 13 Etios racing cars that are valued at US$ 293,613 are estimated at Rs. 95,892,762 (approximately Rs. 95.8 million).
However, the 13 units have been cleared after paying only the port handling charges since they have been imported from India under the carnet facility.
An interesting fact is that although there’s a stipulated time period to re-export the vehicles imported to the country under car net, measures could be taken to extend the period.
The Treasury would then have lost out on Rs. 95.8 million in duties.
The loss of revenue continues with the importation of the other vehicles for the Night Races.
The duty for the Porsche 911 GT3 (manufactured on 25/4/2012) that has been valued at US$ 50,300 is estimated at Rs. 16,884,745 (approximately Rs. 16.8 million). The vehicle was imported from Japan on December 11th.
The duty payments have been waived off since the vehicle had been imported on a temporary basis.
Also, the Aston Martin N24, Nissan Fairlady and the Honda Civic that have been imported from Malaysia on December 10th are valued at US$ 206,900. The duty payments estimated for the vehicles are Rs. 51,732,688.
Once again, the duty payments have been waived off since the vehicles have been declared as temporary imports to the country.
The two shipments that have imported vehicles declared as temporary imports to the country do not have any guarantees.
However, there are doubts over the importation of the two Lamborghini Gallardos.
The Lamborghini Gallardo racing car (2008 model), bearing chassis number ZHWGE127x8LA07121 on December 5th from Hong Kong, is valued at US$ 60,380 and the duty payments estimated at Rs. 19,758,745 (approximately Rs. 19.7 million).
The Customs declaration document does not indicate whether the vehicle has been imported under carnet or on a temporary importation.
Interestingly, the declaration does not indicate any guarantees as well.
It is also a similar case with the Lamborghini Gallardo LP560-4GT3 bearing chassis number 09-7-1071 that was imported on December 7th from Hong Kong.
The vehicle is valued at US$ 59,344 and the duty payments due are valued at Rs. 17,962,499 (approximately Rs. 17.9 million). The importation mode of the vehicle has not been stated in the Customs declaration.
Sources from Customs say that if the vehicle declaration does not specify the mode of importation, chances were that the two Lamborghini vehicles would not be re-exported.
In such a circumstance, Sri Lanka Customs would have to charge the duty payments from the consignee, which is Carlton Motor Sports Club.
Director, GAC Logistics Limited, Chandima Hulangamuwa while confirming that the Company had cleared the vehicles brought down to the country for the Night Races said they would be re-exported.
He explained that while some vehicles have been imported on carnet some others have been imported on special approvals.
He said that the Company would ensure that the vehicles would be re-exported within the stipulated period of time.
“Since they will be re-exported, there is no need to pay for Customs. Only port handling charges would have to be paid,” Hulangamuwa said.
When inquired as to how much had been paid by the Company as port handling charges for the vehicles that have been imported, he was unable to give a figure off hand.
“The port charges have been paid and there’s no revenue issue,” he re-iterated.
However, when explained that out of the six Customs declaration forms in The Sunday Leader’s possession, two forms had not clearly indicated whether it was imported under carnet or imported temporarily, Hulangamuwa re-affirmed that all vehicles had special approvals and would be re-exported.
“This scenario is common in many countries. Singapore is the best example where vehicles are imported in this manner and not even port handling charges have to be paid,” he said.
Be that as it may, the Customs declaration forms of the 13 Etios vehicles indicate that the vehicles have been cleared after paying a mere Rs. 1,500, giving the impression that the importation of vehicles were in fact a revenue issue.
A slogan by several trade unions that protested against the government’s move to remove taxes on Lamorghinis resonates – “Unta Lamborghini, apita badagini” (Lamborghini for them, hunger for us).