The Definitive Guide to Sri Lanka Vehicle Import Tax and Landed Costs (2025)

Navigating the **Sri Lanka Vehicle Import Tax** system in 2025 requires precision. With the government relying heavily on vehicle imports for revenue, the duties are multilayered and subject to regular changes via Gazette Notifications. Relying solely on percentage estimates is not enough; a clear understanding of the tax base, thresholds, and calculations is essential to determine the true **Total Landed Cost** of your vehicle.

This guide provides an in-depth breakdown of every compulsory levy involved in importing a motor vehicle under the relevant HS Codes, ensuring you understand exactly where your money goes. For immediate estimation, please use the PiXAMP Vehicle Import Tax Calculator.

Understanding the New 2025 Tax Structure

CIF (Cost, Insurance, and Freight)

**CIF** is an internationally recognized Incoterm where the seller is responsible for the **cost of the goods, obtaining and paying for minimum insurance, and the freight** to transport the goods to the buyer’s designated port of destination. While the seller pays for these charges, the **risk** of loss or damage transfers to the buyer as soon as the goods are loaded onto the shipping vessel. CIF is used exclusively for sea or inland waterway transport.

CID (Customs Import Duty) and The 50% Surcharge

The **Customs Import Duty (CID)**, or General Duty, is the foundation tax, calculated as **20% of the CIF value**.

The mandatory **50% Surcharge** is levied directly on the calculated CID amount. This effectively raises the total Customs Duty burden on the CIF value to **30% (20% base + 10% surcharge)**. This change was implemented via **Gazette Notification No. 2421/43 (Jan 31, 2025)**.

---

Excise Duty Deep Dive (HS Code Dependence)

The **Excise Duty** (XID) is the most complex levy. It is calculated according to several Gazettes (including **2418/43, 2421/42, and 2434/04**) and depends entirely on the vehicle’s specifications and its corresponding **Harmonized System (HS) Code**.

**How it's Calculated:**

• For Petrol, Diesel, and standard Hybrids: The duty is a fixed rate applied **per cubic centimeter (CC)**, tiered by engine size.
• For Electric (EV) and e-SMART/e-POWER vehicles: The duty is a fixed rate applied **per kilowatt (kW)**, tiered by motor capacity and age.
• **Important:** This calculator focuses on **HS 8703** (Passenger Cars, SUVs). Vans (HS 8704) use a different, non-CC/kW based tax structure.

Luxury Tax (LXT) Thresholds and Rates

The punitive **Luxury Tax** applies only if the vehicle's CIF value (in LKR) exceeds a set threshold. The tax is levied on the *amount exceeding* the threshold, not the full CIF value.

---

Value Added Tax (VAT) & Final Landed Cost

Value Added Tax (VAT)

**VAT (Value Added Tax)** is charged at the current rate of **18%**. It is applied to the **Total Taxable Base** after all other major duties are calculated.

Calculating Your Total Landed Cost

The final **Total Import Cost** (or **Landed Cost**) is the sum of every component: CIF (LKR) + Total CID(CID and SUR) + Excise Duty + Luxury Tax + VAT + VEL + Fixed Fees + Other Estimated Costs (Bank, Clearing, Commissions). This comprehensive figure represents the total capital needed to take legal possession of the vehicle in Sri Lanka.

Total Landed Cost = CIF + Total CID(CID and SUR) + Excise Duty + Luxury Tax + VAT + VEL + Fixed Fees + Other Estimated Costs(Bank, Clearing, Commissions)