The Government, in its COVID-19 economic revival plan, has imposed a Special Commodity Levy (SCL) on agricultural commodities including palm oil, dhal, potatoes, red onions, chili, salmon, yoghurt, and sugar to support a guaranteed price recommended by the Ministry of Agriculture and Plantation Industries as part of the tax framework.
According to the new interim guidelines, SCL will be maintained at a high level on sugar and sugar substitutes, milk powder other than formula for infants and canned fish to encourage local produce. Cement, palm oil and sugar imports will be subject to six months credit raised outside the country.
The import of pharmaceutical products, related raw material, seed and planting materials, fertilizer and fuel will be allowed but petroleum products will be liable to standard excise taxes.
Meanwhile, the import of motor vehicles including motorcycles and three wheelers will be suspended.
The import of Ethanol is banned, while the import of palm oil will be restricted. High quality coconut oil is to be imported under SCL. Only high quality ethanol imports by the State Pharmaceuticals Corporation will be allowed.
The import of raw material for the manufacture of cement, steel, plastic and ceramics will be subject to the standard duty, with CESS under credit arrangements. Import of raw materials for the production of incense sticks, fragrance and flavor for local cosmetic and similar industrial products will be subject to CESS.
Meanwhile, foreign investment projects in fruit drinks and canned products relying on the import of foreign fruits should be based on foreign currency earning basis and the investors as well as factory owners are requested to purchase local fruits.
Import of items for the telecom industry will also be subject to taxes and TRC regulations. Import of IT equipment, computer accessories, mobile phones and electronics are to be permitted to promote the local assembly industry and IT related businesses.
Furniture imports other than exclusive furniture for flagship projects are to be banned.
Project related imports for flagship projects are to be imported using foreign funds raised by investors abroad and borrowing from Sri Lankan banks is not encouraged until commercial operations begin.