Most vehicles imported into Sri Lanka are priced in yen, dollars or pounds, but every tax is calculated in rupees. The rupee value of your vehicle depends on one number you do not control: the exchange rate Customs uses on your declaration. A few percent movement in that rate can change your landed cost by hundreds of thousands of rupees, and can even pull a car into luxury tax.
Which exchange rate Customs uses
Customs does not use your bank’s rate. Under Section 17 of the Customs Ordinance, the Director General of Customs publishes a notice of Rates of Exchange, based on a letter from the Central Bank of Sri Lanka, and “all duties of Customs as well as other charges” are paid at those rates. Each notice takes effect from a stated date and replaces the previous one. Sri Lanka Customs publishes them on its website as the weekly rates for duty calculation.
The rate used for your vehicle is printed in box 23 of the CUSDEC. Ask your clearing agent which week’s rate will apply to your declaration.
How much the yen moved in 2026
Two real figures for the Japanese yen:
- The Customs notice effective 27 April 2026: Rs. 2.0144 per yen.
- The CUSDECs we reviewed from September 2026: Rs. 2.1522 per yen.
That is a rise of 6.84% in the rupee cost of every yen in five months.
Worked example: the same car at both rates
A 2026 Honda Vezel petrol hybrid (1,496cc) with a CIF value of JPY 2,636,451.75, using 2026 rates:
| Item | At Rs. 2.0144 / yen | At Rs. 2.1522 / yen | Difference |
|---|---|---|---|
| CIF in rupees | 5,310,868.41 | 5,674,171.46 | +363,303.05 |
| Customs Import Duty (30%) | 1,593,260.52 | 1,702,251.44 | +108,990.92 |
| Surcharge (50% of CID) | 796,630.26 | 851,125.72 | +54,495.46 |
| Excise duty (1,496cc à Rs. 3,450) | 5,161,200.00 | 5,161,200.00 | 0 |
| Luxury tax | 0 | 139,337.17 | +139,337.17 |
| VAT (18%) | 2,410,748.29 | 2,512,109.84 | +101,361.55 |
| SSCL (2.5%) | 334,826.15 | 348,904.14 | +14,077.99 |
| Total landed cost | 15,626,533.62 | 16,408,099.76 | +781,566.14 |
The exporter’s price did not change at all, yet the car cost Rs. 781,566 more to land.
Which taxes move with the exchange rate
- Move with the rate: the CIF value itself, Customs Import Duty, the surcharge, VAT and SSCL (their base includes CIF Ã 1.10), and luxury tax.
- Do not move: excise duty for petrol, diesel and hybrid cars (a fixed rupee amount per cc) and for electric and e-SMART cars (per kW), VEL and the fixed Customs fees.
The luxury tax trap
The biggest single jump in the example comes from luxury tax. For a petrol hybrid the threshold is Rs. 5.5 million of CIF (Gazette 2421/41). At Rs. 2.0144 per yen the Vezel’s CIF was Rs. 5.31 million, under the threshold, so it paid no luxury tax. At Rs. 2.1522 its CIF became Rs. 5.67 million, so it paid 80% of the Rs. 174,171 above the line: Rs. 139,337.
If your car’s CIF is close to its luxury tax threshold (Rs. 5.0 million for petrol and diesel, Rs. 5.5 million for hybrids, Rs. 6.0 million for electric and e-SMART cars), a weaker rupee can add a tax you had not budgeted for.
A rule of thumb
For this car, a 1% rise in the yen rate (from Rs. 2.1522 to Rs. 2.1737) adds about Rs. 145,700 to the landed cost: about Rs. 56,700 from the higher CIF and Rs. 89,000 from the taxes that follow it. Cars with a higher CIF, or a lower excise share, are affected even more.
What you can do
- Budget with a margin. Add a few percent to the current rate when you plan, especially for orders that will be declared months later.
- Watch the threshold. If your CIF is near the luxury tax line, recalculate at a slightly weaker rupee.
- Recalculate before you commit. Enter your CIF in the original currency and the latest Customs rate in the PiXAMP import tax calculator and see how each tax line changes.
Sources
- Sri Lanka Customs, Customs Notification (General), Rates of Exchange, effective 27.04.2026, issued under Section 17 of the Customs Ordinance (notice).
- Gazette Extraordinary No. 2421/41 of 31 January 2025 (luxury tax thresholds), Ministry of Finance, 2025 gazettes.
- A real September 2026 CUSDEC (exchange rate and CIF), identifying details removed.
These figures are estimates for planning. Confirm the final amount with Sri Lanka Customs or a licensed clearing agent.