Vehicle buyers in a state of shock
Apr 3, 2011

Vehicle buyers were in a severe state of shock yesterday on hearing that prices of vehicles below the 1300cc category, for which they had already paid an initial instalment had skyrocketed by more than Rs.700,000 as a result of the massive taxes being imposed on such imports. Heated arguments took place between customers and vehicleagent representatives in Colombo yesterday. The customers accused them of not having released the vehicles on time while being aware that taxes were being increased.

Most of the buyers had paid their initial instalments in November to buy small family cars under the 1300cc category and had been visiting the relevant showrooms on a weekly basis to check whether the vehicle shipment had arrived.

As a result of the increased taxes those who had paid for and booked the vehicles would now have to pay more than half a million rupees to buy the vehicles.

A Polgahawela school teacher said she paid Rs.200,000 in November but the vehicle was still to arrive. “But they have released vehicles to buyers who had paid their instalments after November,” she charged. “I won’t leave this place until I get my car as it is now been five months. They are telling me and others who paid instalments in November to come on dates they have been giving us since February.”

Ranjan, who had paid the initial instalment in November, accused the agents of holding on to the vehicles knowing about the tax hike.

Another customer said after he had paid the initial installment and obtained leasing facilities said he would ahead with the purchase. “What can I do now?” he asked. “I will somehow find another Rs.700,000 and buy the car as I have been preparing and planning for this for a long time,” he said.

A leading car-agent representative in Colombo said once the vehicle arrives at the port it is entered into the system. It is only then that the price is marked taking into account the taxes and other charges.

“We did not increase the taxes. It is mentioned in the agreement that prices can change due to unavoidable circumstances,” the rep said.

The Finance and Planning Ministry had on Saturday increased taxes to reduce the heavy traffic congestion and bring down Sri Lankas fuel bill.

Taxes have been imposed depending on the engine capacity of the vehicles. Tax on hybrid vehicles below 1000CC have been increased by 14 per cent with tax on all hybrids above 3000CC being increased by 57 per cent.

Production duties for cars and vans have been classified into the fuel type used together with the engine capacity. The tax on cars under 1000CC using petrol has been increased by 85 per cent while cars with an engine capacity of more than 3000CC are being increased by 129 per cent.

Vehicles between 1000 CC and 2000 CC have also been increased by 85 per cent. Import duty on vehicle spare parts have also been increased. However there has been no change in the tax imposed on commercial vehicles such as tractors, buses and lorries.

Source: Daily Mirror - Sri Lanka