Annual Report 2010 - Ministry of Finance and Planning

2 | FISCAL DEVELOPMENTImport DutyThe revenue from import duty declinedby 19 percent to Rs. 64,165 million in2010 compared to the previous yearalthough the value of total imports (inrupee terms) increased by 30 percentreflecting the gradual recovery ofdomestic economic activities. Thedecline was mainly attributable to therevisions introduced to the import dutystructure during the year.In 2010, the duty structure wassimplified to have a three band tariffstructure with 30, 15 and 5 percentrates. However, a few tariff lines werecontinued at higher duty rates forrevenue purposes and also certaintariff lines were kept at specific (unit)rates mainly to address undervaluationissues. The tariff structure is reflectedin Table 2.6.In this process, the import dutywas either removed or reduced onvarious items, including the rawmaterials used in many sectors aswell as the importation of machineryand equipment to support domesticeconomic activity. In addition, theremoval of the 15 percent surchargeapplicable on imports in mid 2010 andthe duty waivers granted on petrolTable 2.5 > Motor Vehicle ImportsDescription Unit2008 2009 2010Tractors 28,175 12,874 18,077Passenger Vans and Buses 1,115 649 2,766Motor Cars (including Ambulances, Hearses 19,253 1,852 26,745etc.)Three Wheelers 42,687 30,259 91,658Motor Vehicles for Transtort of Goods13,953 5,736 21,204(including dual purpose & Cabs Etc.)Other 671 210 277Total 105,854 51,580 160,727Source: Department of Sri Lanka CustomsTable 2.6 > Tariff Structure (As at 31.12.2010)Duty RateNo. of Tariff Lines (8 digits level)Free 2,9675% 41515% 1,51630% 1,32775% 04100% 05Specific 60Specific & Advelorum 193Total 6,487Source: Department of Sri Lanka CustomsTrade AgreementTable 2.7 > Coverage of Products and Trade Volume under Free Trade Agreements -2010No.of tariff linessubjected to preferentialrate/duty free (HSCode at 8 digits level)Export Value(Rs. Mn)Import (CIF)Value (Rs. Mn)1. Indo-Sri Lanka Free Trade Agreement (ISFTA) 4,554 7,344 149,1552. Pakistan - Sri Lanka Free Trade Agreement (PSFTA) 5,305 216 9,5613. South Asia Free Trade Agreement (SAFTA ) 4,744 13 1,6554. Asia Pacific Trade Agreement (APTA) 561 164 1,0355. Other Agreementsa. Global System of Trade Preference (GSTP)b. South Asian Association for Regional Cooperation(SAARC)Source: Department of Sri Lanka Customs990634,798 4,915117152