Feb Sun 2021

Team Simplebooks

A guide for importers and exporters in Sri Lanka

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Are you thinking about setting up an import or export business in Sri Lanka? Sri Lanka’s unique geographic location gives many advantages to operate an import or export business from the country. However, understanding the processes, and regulations you need to follow can be difficult without the proper guidance.

In this article, you’ll learn everything there is to know about operating an import and export business in Sri Lanka, including how to register your business for import or export, Sri Lanka Customs processes and tools, understand the function of HS codes, customs duty and tariff rates, and various import and export requirements that you will have to follow.

How to register as an importer or exporter?

To start your business as an importer or exporter, the first thing you need to do is register with Sri Lanka Customs by following the below steps.

Step 1: Obtain the application

Submit the application form titled “Importer Exporter Registration Application.” This application contains several mandatory fields that need to be completed by you. (e.g., Name of Business, Address, Details of Directors/Partners)

Usually, you’d have to visit the website of the Customs Department to obtain your application. However, we’ve attached a soft copy of the sheet here to make things easier for you.

Step 2: Get enrolled in the ASYCUDA system.

The ASYCUDA (Automated System for Customs Data) system is an integrated customs management system used by Sri Lankan Customs. The system helps in keeping track of information on products that are being imported or exported.

You’ll need to upload company/personal details along with photographs of all partners/individuals to the Sri Lanka Customs ASYCUDA system through a Customs House Agent. A more detailed version of the process has been attached here for your reference.

Step 3: Collect all required documents.

Once you have completed the application, you’ll need to obtain & submit several documents and certifications alongside your application.

Here’s what you’ll need if you’re registering as;

A Limited Liability

1.National Identity Card/Passport of two directors (who have signed the application) along with photocopies of the NICs/Passports of all directors [If all directors are foreigners, at least one director must possess Permanent Residence (PR), Residential Visa (RV) or Business Visa (BV)]
2.VAT certificate (Obtained from the Inland Revenue Department)
3.TIN certificate (Also obtained from Inland Revenue Department)
4.Commercial invoice and Bill of Lading (BL)/Airway Bill (required only for the registrations as an Importer)
5.Certificate of Incorporation
6.Form 01 or Form 48 & 40 (obtained from the Registrar of Companies)
7.Deed or Lease agreement of the business premises relevant to the address in the TIN certificate
8.Billing Proof relevant to the address in the TIN Certificate (Water Bill/Electricity Bill/Sri Lanka Telecom Bill)
9.For Overseas Companies – Forms 44, 45, and 46 (obtained from the Registrar of Companies)
10.For a change in company address – Form 13 (obtained from the Registrar of Companies)
11.If there is a change in directorial roles – Form 20 (obtained from the Registrar of Companies)
12.If there is a change in the company name – From 03 (obtained from the Registrar of Companies)
13.For BOI companies – The BOI Registration

Sole Proprietor/Partnership

1.National Identity Card/Passport of two partners/applicants & photocopies of all partners’ NICs/Passports.
2.VAT certificate
3.TIN certificate
4.Commercial invoice and Bill of Lading (B/L), Airway Bill (required only for the registrations as an Importer)
5.Business Registration Certificate (Not applicable for personal imports)
6.Deed or Lease agreement of the business premises relevant to the address in the TIN certificate.
7.Billing Proof relevant to the address in the TIN Certificate (Water Bill/Electricity Bill/Sri Lanka Telecom Bill)
Step 4: Take a few copies

You’ll also need to hand in photocopies when handing in your registration for all original documents, so remember to keep copies of all the documents you have collected.

Step 5: Submit your application

Once you’ve collected all the necessary details, you can submit your application to Sri Lanka Customs.

What is the role of HS codes?

Understanding the role of HS Codes is a crucial part of becoming an importer or an exporter. HS (Harmonized System) codes are unique, internationally recognized 8-digit codes maintained by the World Customs Organization (WCO). You will come across HS codes often, especially during international trade processes, such as making declarations, paying customs duties and tariffs, and following import and export license requirements.

The main use of HS Codes is to provide a standardized way for customs agencies to quickly identify various products being imported and exported.

To find the HS code for the types of goods you want to import or export, you can use the Sri Lanka HS Code Finder created by Sri Lanka Customs.

What are the goods you can import to Sri Lanka?

Once you register as an importer with Sri Lanka Customs, you’ll be able to import many items without any additional requirements. However, there are certain goods for which you will require an import license or will only be able to import temporarily.

To check if the items you want to import requires an import license or are importable only under temporary conditions, enter the item’s HS code into the Commodity Search page on the Sri Lanka trade information website.

What items are prohibited or restricted for import?

While you can import many items without an issue, certain items are restricted from being imported into Sri Lanka. As this list is continuously updated, especially in light of the current COVID-19 pandemic, we recommend visiting this page to determine if a particular good is prohibited from being imported.

Additionally, some items, while not prohibited, are restricted from being imported. To import these items, you’ll need to obtain approval from the relevant Sri Lankan government authorities. You may also have to carry out special mandatory procedures, such as quarantine for the products. You can find a complete list of restricted imports on the Sri Lanka Customs page here.

How to obtain an import license?

As discussed earlier, there are certain items you can only import after obtaining an import license. An import license is a document issued by the Department of Imports and Exports Control permitting you to import specific items into Sri Lanka. Importing without a license can result in a fine based on the value of imported items.

Step 1: Select the relevant application based on what you want to import.

Step 2: Get a recommendation letter from the relevant authorities authorizing the importation of the goods. The relevant authority will vary based on the type of product you’re importing.

Step 3: Attach two copies of proforma invoices with the following details:

  • Name and addresses of the importer
  • Details of the goods, including quantity and value
  • Country of origin
  • Country of shipment

Step 4: Provide an original copy and photocopy of your business registration certificate and (if you are Sri Lankan) National Identity Card.

The Department of Imports and Exports Control will process your application 3 hours from receiving all the correct documents.

You’ll also need to pay a license fee based on 0.2% of the total invoice value of the goods you are importing (cost, insurance, and freight). You can also refer to this illustration for a full view of this process.

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What are Import Declarations?

You must declare every type of item imported into Sri Lanka to Sri Lanka Customs by regulation.

To make a declaration, you’ll need to submit a completed CusDec (Customs Declaration) through the ASYCUDA system. You can submit these declarations to regional Sri Lanka Customs offices. 

You also have to submit the hard copies of your declaration alongside the following documents after payments of the relevant duties & levies:

  • A commercial invoice or contract of sale document from the supplier of the goods
  • Transport documents such as Bill of Lading or Air Waybill
  • Packing list (if available)
  • Certificate of Origin (this should have been supplied to you by the exporter)
  • Any import licenses or permits obtained from other ministries depending on the type of goods you are importing.

What are the customs duties and tariffs for imports?

Customs duties and tariffs are both taxes charged by the government on imported goods, but there are some key differences.

Sri Lanka Customs duties: These are payable on imported goods as a percentage of their declared value, such as VAT (Value Added Tax). They are also payable at a specific rate according to the number of units, weight, unit rate, or composite rate of the imported items. The rate of duty payable on imported goods will vary based on the specific product type and the country of origin. 

Sri Lanka Customs tariffs: These are taxes charged on certain types of imports, usually on items similar to locally produced products, to protect the local industry for the item (e.g., cereals).

Tariffs come in two forms:

  • Static tariffs: A fixed-rate applied to every unit for a specific type of imported good.
  • Ad valorem tariffs: Rates that are charged based on the value of the imported shipment.

Certain goods are exempt from customs duties and tariffs, and some of these exemptions apply based on the following:

  • Goods needed for diplomatic missions
  • Goods imported under a government investment promotion scheme
  • Good imported in certain economic zones

To view the full list of Sri Lanka tariff classifications and tariff rates for the goods you want to import, including any items with tax exemptions, search for its HS code on the Sri Lanka trade information website’s Commodity Search page.

If you would like to calculate your custom duties and tariffs, you can try out this duty calculator developed by Sri Lanka Customs.

What goods can you export from Sri Lanka?

When exporting items from Sri Lanka, you might be required to provide specific certifications depending on the product you are exporting.

  1. Certificate of Origin (GSP Certificate)
  2. Certificate of Origin
  3. Certificate of Quality
  4. Health Certificate
  5. Phytosanitary Certificate
  6. Fumigation Certificate.

You can find more information about these certificates, where to obtain them, and what goods they apply to by referring to the Sri Lanka Trade Portal.

To export some items, for example, tea, timber, or registered vehicles, you will also need to obtain an export license from the authority overseeing exports for the respective item. To see which products require licenses, check this list prepared by the Sri Lanka Customs.

There are some items you are prohibited from exporting, such as

  • Dead or live animals or their parts. Permits are issued for research purposes and exchange with foreign zoos and museums.
  • Antiques/ Cultural Property
  • Dangerous drugs
  • Explosives
  • Live fish (Prohibited spices)
  • Minerals in raw form
  • Obscene publication and literature
  • Protected plants listed under the Fauna & Flora Protection Ordinance

These items are updated yearly. The latest list of items is included in the Export Procedure 2020 issued by the Export Development Board.

What are the customs duties and tariffs for exports?

Currently, exporters do not need to pay customs duty in Sri Lanka. However, when exporting certain products, such as tea, rubber, or coconuts, the exporter must pay a “CESS” charge to Sri Lanka Customs. The exact CESS rate will vary depending on the product.

To find out items with applicable CESS charges, you can search for its HS code on the Sri Lanka trade information website’s Commodity Search page.

How Simplebooks can help you

Although this article gives you all the information you need to operate as an importer or exporter in Sri Lanka, you might still have some difficulties when dealing with Sri Lanka customs.

As a first time importer or exporter, it can be challenging to go through the customs registration process on your own and make sure every requirement is followed.

We at Simplebooks have helped many importers and exporters get their customs registration done successfully time and again.

Are you ready to take the next step?

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