Vehicle import LC controversy deepens as importers say one LC can cover thousands of vehicles and avoid new surcharges.
Vehicle import LC claims made by the government are misleading because one Letter of Credit can cover thousands of vehicles, importers have warned.
The Sri Lanka Vehicle Importers Association says there is a major discrepancy between the government’s claim that 1,782 Letters of Credit were opened on the 15th and the actual number of vehicles expected to be imported through those LCs.
The association stressed that one Letter of Credit does not mean one vehicle.
According to importers, a single LC can include 3,000 or even 4,000 vehicles, depending on the scale and status of the importer involved.
They said an ordinary importer’s LC may include 2, 5, 10, or even 100 vehicles.
However, a main agent company can open one LC under a single line for as many as 5,000 vehicles, they pointed out.
The association further stated that vehicle-related LCs worth US$ 23 million were opened on May 15 alone.
It claimed these LCs appear to have been opened to avoid the surcharge imposed by the government.
The association explained that when importing used vehicles from countries such as Japan, all details, including the chassis number, must be included in the LC.
However, companies importing brand-new vehicles do not face the same requirement.
It also noted that the validity period of an ordinary vehicle importer’s LC is usually limited to a short period of around three months.
By contrast, main agent companies can open LCs valid for a much longer period, ranging from around one and a half years to two years.
The Vehicle Importers Association said this allows those companies to import thousands of vehicles required for the next several years without paying the relevant surcharge.
The association argues that this situation exposes a serious loophole in the government’s handling of the vehicle import tax and surcharge system.
