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Unlawful transfer of vehicles imported on MP tax-free permits without paying statutory levies

Commissioner General of Motor Traffic
Department of Motor Traffic
341, Alvitigala Mawatha
Colombo 5

Our ref: BC/C/2396/2016

07th Oct 2016

Unlawful transfer of vehicles imported on MP tax-free permits without paying statutory levies exempted at the time of importation

Further to an investigations undertaken on the abuse of MP tax-free permits, it has now been revealed that those who purchased these permits have imported a large number of Toyota Land Cruiser Jeeps, defrauding over 33.5 million rupees for each vehicle, having paid only Rs 1750.00 as data entry charges to the Customs Department (schedule of vehicle imported already have been delivered to you with the relevant Customs declarations). It is also revealed that those who are not qualified to use this tax exemption are in the process of registering of these vehicles with the Department of Motor Traffic with unauthorised transfer of these vehicles in their names.

The law, [Section 3C of Excise (Special Provisions) Act No 8 of 1994] authorises the exemption of payment of levies on vehicles imported for the use of MPs in the public interest, enabling the MPs to discharge their duties efficiently and effectively but not to sell such permits to defraud government revenue. The law does not permit disposal of any such vehicle in any manner, in violation of the fundamental purpose of the issuance of such permits, unless the full tax component exempted at the time of importation is fully paid prior to the disposal (relevant provision of law and the gazette notification, permitting tax free imports of vehicles for MPs under the said law is enclosed for your perusal).

The General principle of law, concerning the sale of such goods, where certain encumbrances attached to them, is the principle ‘let the buyer beware’, that is the buyers of such permits who abuse the tax-free privilege for which they are not entitled to, assume the risks associated with the purchase of such tax free permits, disqualifying them from effecting the transfer of such vehicles in their names, thereby failing to meet their expectations. Because it is buyer’s duty before buying such permits to inquire and examine whether they are entitled to use this tax-free privilege only afforded to MPs.

Therefore, as this organised fraud has already cost over three billion rupees of government revenue, you are urged not to register these vehicles in the name of any unauthorised person, unless the proof of payment of statutory levy exempted at the time of importation is produced with the application of transfer of such vehicles in the name of persons who wishes to have transfer of the vehicle duly registered in their name.

Please also take notice that if any failure on your part to act as required by law, may result in legal action being taken against you in public interest.

Nagananda Kodituwakku
Attorney-at-Law & Public Interest Litigation Activist

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