The Government of Sri Lanka published 'Gazette Extraordinary No. 2176/19', dated 22 May 2020 to amend the 'Imports and Exports (Control) Regulations No 1 of 2020', published in the 'Gazette Extraordinary No. 2171/5', dated 16 April 2020. The revised import regulation retained the restrictions on non-essential items, including motor vehicles.
'Operating Instruction 08/2020' was published on 29 May 2020 to avoid ambiguity when implementing the regulations of Gazette Extraordinary No. 2176/19, dated 22 May 2020. According to instructions stated on the aforementioned document, when the on-board date comes on or after 22 May 2020 for items included in Schedule 1 of Gazette Extraordinary No. 2176/19, dated 22 May 2020, which includes 'Temporarily Suspended' items, importation can be made only in an instance prescribed by regulation on the gazette. The items included in the Schedule I of Gazette Extraordinary No. 2176/19, dated 22 May 2020 includes items such as motor vehicles, footwear, garments, and agricultural produce that are not subjected to the Special Commodity Levy (SCL) among other non-essential items. Therefore, in the instance if the Letter of Credit facility was established before 21 May 2020 and advance payment is made less than 80%, importation cannot be made contrary to the regulations prescribed in the Gazette.
Items included in Schedule II of the Gazette includes fish meat, palm oil that is not chemically modified, and electrical equipment among other items. When the on-board date of such items comes on or before 21 May 2020, items can only be imported with a credit period of 90 days as mentioned in the Gazette Extraordinary No. 2171/5 dated April 16, 2020. When on-board date comes on or after 22 May 2020, items can be imported with a credit period of 90 days or 180 days as mentioned in Gazette Extraordinary No. 2176/19 dated May 22, 2020.
Items that are not included in Schedule I and II on Gazette Notification 2171/5 dated 16 April 2020 and shipped on or before the 21 May 2020, for the purpose of importing under Open Account and Consignment basis, can be cleared from Sri Lanka Customs without a penalty.
Items such as palm oil that is not chemically modified, cane or beet sugar and chemically pure sucrose in solid form, and portland cement, aluminous cement and similar hydraulic cement included in 'Annexure 1' are items that are to be imported with a 180-days credit period.
According to the Interim Trade and Custom Based Economic Framework, which is part of the COVID-19 Economic Revival Plan, Imports for exports on ‘No Foreign Exchange Basis’ is allowed strictly under the supervision of the Board of Investment (BOI), Export Development Board (EDB), and Sri Lanka Customs. Importing raw materials for local manufacturing is permitted, provided the domestic value addition is at least 30% and the foreign exchange savings from the import replacement activity is higher than the value of import of finished products.
Foreign Investment Projects concerning fruit drinks and canned projects relying on importation of foreign fruits will be based on foreign currency basis and is required to use locally grown fruits. Accordingly, the BOI and EDB are required to pursue such investors/factory owners to increase the use of local fruits.
To promote local rubber cultivation and tapping, rubber manufacturing companies are permitted to import latex and raw rubber subject to purchasing 50% or more of local supply at 25% higher than the global price of rubber.
Importing items for the telecommunication industry is allowed, provided the applicable taxes are paid for and the regulations of the Telecommunications Regulatory Commission (TRC) of Sri Lanka are met.
To promote the local assembly industry and IT related businesses, importing of IT equipment and computer accessories, mobile phones and electronics are permitted. Importing aluminum products other than those for construction industry is restricted.
Project-related imports for flagship projects are to be imported using foreign funds raised by investors abroad. The BOI is required to ensure that such investors will not borrow from Sri Lankan banks until the project is completed and commercial operations are commenced.