Alleged Prado Duty Fraud: Misinformed JVP Leader Misleads The Parliament

By Nagananda Kodituwakku –February 13, 2016

Nagananda Kodituwakku

On 27th Jan 2016, the JVP Leader, Mr Anura Kumara Dissanayake, made a ‘revealing statement’ in the parliament, alleging that on the orders of the DGC Chulananda Perera and Finance Minister Ravi Karunanayake, a large number of Toyota Prado jeeps (180 units) seized by Customs, have been released only on recovery of 1.6 million rupees of additional duty for each vehicle. Anura K further alleged that the government had incurred a colossal revenue loss of over 4.7 billion rupees, as a result of the withdrawal of the Gazette Notification No 1901/3 of 10th Feb 2015 (issued by the Finance Minister), which permitted the Customs Officers to ‘combat such frauds’.

It appears that a group of Customs officers have taken the JVP leader for a ride, having fed him with some false information. Whatever is the motive behind these allegations, the JVP Leader cannot be allowed to mislead the people abusing the Parliamentary privileges.

Customs Law relating to valuation of commodities

Sri Lanka is a member of the General Agreement on Trade and Tarrifs (GATT) since July 1948 and in 1994 several important changes were made to GATT Valuation Agreement (Article VII), which were incorporated into the Customs Ordinance in 2003. This changes requires (Section 51) Customs to charge levies on all commodities on the ‘transaction value’, which is the primary source of valuation of goods for Customs purposes.

With this change, the Customs Law also provided stringent sanctions for ‘deliberate understatement of value for customs purposes’, which includes forfeiture of goods (Section 52) and if the fraudulent intent is established, to impose severe penal sanctions up to the treble the value of the goods (Section 129).

Alleged revenue losses on vehicle imports

In Sri Lanka, the Government’s tax revenue depends heavily on the levies charged on motor vehicles. And it is nothing but fair to say that Customs Department is responsible for causing a significant revenue loss due to the collusion of the some Customs officers assisting the unscrupulous importers to present false values for Customs purposes.

‘Vehicles’ withdrawn from application of GATT valuation regime  Read More