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Obtain recommendations to automobile assembling industries for excise duty exemption.

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As per the Para (3) of the Schedule 1 of the Gazette (Extraordinary) No. 1591/10 of 04.03.2009 locally assembled vehicles using local vehicle components containing not less than 30% of domestic value addition are exempted from payment of Excise Duty on the recommendation made by the Minister - in – charge of the subject of Industries, subject to the conditions stipulated in schedule II of the Gazette notification.

The Procedure followed by the Macro Policy Division of the Ministry of Industry and Commerce for recommending locally assembled vehicles

  1. A company seeking a duty exemption under the said scheme needs to furnish an estimated cost structure to the Ministry of Industrial Development (MID). The MID would peruse the same, and if the estimated cost structure indicates that the company could achieve 30% domestic value addition, a no objection letter would be issued to enable the company to commence their operations.
  2. Thereafter, the MID, Department of Customs, Ministry of Finance and relevant technical teams (German Technical Institute etc) follows up the process of assembling of vehicles at all stages. At least 3 of these inspections are carried out by each of the parties.
  3. After completion, the company needs to submit the actual cost structure, certified /audited by a reputed chartered accountant with all the supporting documents (i.e. CusDecs, invoices etc.) to the Ministry to calculate the actual local value addition. (Submission of all necessary documents certifying their authenticity with the audited report is compulsory.)
  4. A committee comprising of members from all relevant Ministries / government organizations has been appointed by the Cabinet of Ministers, to take decisions with regard to the recommendations of Excise duty exemptions for automobile assembling industries. This committee makes the decision based on the observations made by all parties and by comparing the estimated and the actual cost structures, which should tally.
  5. The committee would recommend the duty exemption, if the minimum value addition of 30% has been achieved locally.

Organization Information

Ministry of Industry & Commerce & Resettlement of Protracted Displaced Person & Cooperative Development

P.O. Box .570
No. 73/1,
Galle Road

Mr. W.T.H.R. Withana
Telephones:+94 11 2 392149 / +94 11 2 392150 / +94 11 2 392154
Fax Nos:+94 11 2 449402

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Last Updated On: 2012-07-06 14:56:22
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