G/VAL/N/1/LKA/1  
 
11 May 2015  
(15-2474)  Page: 1/10  
Committee on Customs Valuation  Original: English  
 
 NOTIFICATION UNDER ARTICLE 22 OF THE AGREEMENT 
ON IMPLEMENTATION OF ARTICLE VII 
OF THE GENERAL AGREEMENT ON 
TARIFFS AND TRADE 1994 
SRI LANKA 
The following communication, dated 5 May 2015, is being circulated at the request of the 
delegation of Sri Lanka. 
  
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Customs (Amendment) Act No. 2 of 2003 
(Certified on 6th January, 2003) 
1. D.O 10/2002 
AN ACT TO AMEND THE CUSTOMS ORDINANCE 
BE it enacted by the Parliament of the Democratic Socialist Republic of Sri Lanka as follows:- 
1 This Act may be cited as the Customs (Amendment) Act No. 2 of 2003 Short title 
2 Section 51 of the Customs Ordinance (hereinafter referred to as the 
"principal enactment") is hereby amended by the substitution for the words "by declaration by the importer or his agent", of the words "by 
a declaration made by the importer or his agent on a form of such size 
and colour as may be specified by the Director-General by notification published in the Gazette". Amendment of 
section 51 of Chapter 235 
3 The following new sections are hereby inserted immediately after 
section 51 of the principal enactment and shall have effect as sections 51A, 51B and 51C of that enactment:- Insertion of new 
section 51A, 51B and 51C in the principal 
enactment 
 
When officer in doubt be 
may call for 
further information 51A (1)(a)  Whenever an officer of customs has reason to 
doubt the truth or inaccuracy of any particulars contained 
in a bill of entry or a declaration made under section 51 or 
the documents presented to him in support of a bill of entry under section 47, the officer of customs may require 
the importer or his agent or any other party connected 
with the importation of goods, to furnish such other information, including documentary or other evidence in 
proof of the fact that the declared customs value 
represents the total amount actually paid or is payable for the imported goods as adjusted in accordance with Article 8 of Schedule E.  G/VAL/N/1/LKA/1 
 
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   (b)  After the receipt of further information or in the 
absence of any response, if the officer of customs still has reasonable doubt as to the truth or accuracy of the declared customs value, it shall be deemed that the 
customs value of the imported goods in question cannot 
be determined under the provisions of Article 1 of Schedule E and the importer, if so requests, shall be 
informed by the officer in writing of the grounds for such 
doubt and be afforded an opportunity to be heard.  
 (c)  The officer of customs may thereafter proceed to 
determine the customs value in accordance with the other 
provisions of Schedule E and amend the value as 
appropriate.  
 (2)  If an officer of customs is satisfied as a result of an 
examination or investigation, or an audit carried out under 
section 128A, at any time prior to or after the clearance of the goods that the value declared by the importer or his 
agent under an Article of Schedule E under which the 
value was initially accepted, is not appropriate the officer of customs may amend the value in accordance with the appropriate Article of Schedule E.  
 (3)  For the purpose of this Ordinance, the customs value 
shall be the amended value under subsection (1) or (2).  
 (4)  Upon a written request, an explanation shall be given 
in writing to the importer, on how the customs value of 
the importer's goods was determined under subsection (2).  
 (5)  Subsection (2) shall apply to goods whether or not 
such goods have been released from the control of the customs or any duty assessed on them has been paid.  
 (6)  An importer who is dissatisfied with a decision of the 
officer, under this section may, within ten working days 
after the date on which notice of the decision is given, appeal to the Director-General against that decision.  The 
right of appeal shall be available to an importer whether or 
not the imported goods have been released to him and whether or not any part of the customs duty has been 
paid.  The decision of the Director-General on the appeal 
and the reasons for such a decision shall be in writing.  
 (7)  Where the importer desires to clear the goods 
pending the determination of his appeal the Director-
General may, except in case where fraud is suspected 
allow the clearance of the goods upon furnishing security for the payment of the customs duties and other levies for 
which the goods may be liable.  
Importer to 
keep records 
for three 
years 51B. (1)  every Importer, agent or others concerned in the 
importation, movement and storage of imported goods 
shall keep or cause to be kept in Sri Lanka such records 
for a period of three years from the date of importation as may be prescribed.  G/VAL/N/1/LKA/1 
 
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   (2)  Every such person shall whenever required by an 
officer of customs –  
(a) Make the records available to such officer; 
(b) Provide copies of the records as required; and 
(c) Answer any questions relating to matters arising 
under the Ordinance.  
Confidentiality 
to be strictly 
maintained 51C  All information which are confidential in nature or are 
provided in confidence for the purpose of customs 
valuation shall be so treated by the officer of customs and shall not be disclosed without the written permission of the persons or government providing such information, 
e x c e p t  t o  t h e  e x t e n t  t h a t  i t  m a y  b e  r e q u i r e d  t o  b e  
disclosed in the course of judicial proceedings.  
Amendment 
of section 52 
of the principal 
enactment 4.  Section 52 of the principal enactment is hereby 
amended by the substitution for the words "is not in 
accordance with Schedule "E" of the words "according to section 51 is a false declaration".  
Insertion of 
new section 52a in the 
principal 
enactment 5.  The following new section is hereby inserted 
immediately after section 52 and shall have effect as section 52A of the principal enactment:-  
 "Penalty for 
failing to 
keep, destroying or 
altering 
records & c 52A.  Every person who in contravention of 
the provisions of the Ordinance, fails to 
keep records which are required to be kept under section 51B or destroys, alters or 
conceals any book register, record or other 
document required to be kept under this Ordinance or sends or attempts to send out of Sri Lanka any such book, register, 
record or document commits an offence 
and shall be liable to a penalty not exceeding five hundred thousand rupees".  
Amendment 
of section 101 of the 
principal 
enactment 6.  Section 101 of the principal enactment is hereby 
amended in subsection (1) thereof – 
(a) by the substitution in paragraph (f), for the words 
"duties:  and", of the words, "duties"; 
(b) by the substitution in paragraph (g), for the words 
"defaced", of the words "defaced:  and"; and 
(c) by the addition, at the end of the paragraph (g) of 
that subsection, of the following:- 
 "(h)  for assessment of value for the customs 
 purposes under section 51".  
 7.  The following new section is hereby inserted 
immediately after section 128 of the principal enactment and shall have effect as section 128A of the principal 
enactment:- Insertion of new 
section 128A in the principal enactment. G/VAL/N/1/LKA/1 
 
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  Power to 
enter for the purpose of audit or 
examination 
of records 128A. (1)  The Director-General or any officer of customs 
authorized in that behalf in writing by the Director-General may –  
(a) at all reasonable hours of the day or night enter any 
building or place where records are kept in 
accordance with section 51B and audit or examine such records on any matter pertaining to customs 
either in relation to specific transactions or to the 
adequacy and integrity of the manual or electronic systems by which such records are created and stores; 
(b) open and examine any receptacle where any book of 
account, register, record or any other document may be found for the purpose of the preceding 
provisions of this Ordinance; 
(c) examine and take copies of, or make extracts from 
or take possession of any book of account, register, 
record or other document found in such place or 
building;  
 (d) operate any compute found in any building and 
make copies or take printouts of the whole or part 
of any entries recorded or stored therein.  
 (2)  Where an officer authorized by the Director-General 
under subsection (1) of this section takes into his 
possession any book of account, register, record or other 
documents from any person, such officer shall issue to that person a memorandum specifying the book, register, 
record or document he has taken into his possession.  
 (3)  Any book of account, register, record or other 
document taken into his possession under subsection (1) by any officer may be retained in the possession of such 
officer for the examination of such book, register, record 
or document or for the institution of legal proceedings against the person to whom such book, register, record or 
other document belongs.  
 (4)  The Director-General or any authorized officer or 
Customs may request any person in charge or occupation 
of any building or place to assist the Director-General or 
such officer to enter and search that building or place and if such person when so requested fails to assist the Director-General or such officer he shall be guilty of an 
offence.  
 (5)  Any person who obstructs the Director-General or an 
officer of Customs in exercising any of his powers under 
this section shall be guilty of an offence.  
 (6)  A person who is guilty of an offence under subsection 
(4) or (5) shall be liable to a penalty not exceeding one 
hundred thousand rupees".  G/VAL/N/1/LKA/1 
 
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   8.  Section 167 of the principal enactment is hereby 
amended by the insertion imme diately after the definition 
"customs house" of the following "document" includes any information contained in an electronic records, printed on 
a paper, stored, recorded or copied on optical or magnetic 
media and produced by whatever means;" Amendment of 
section 167 of the principal enactment 
 9.  In the event of any in consistency between the Sinhala 
and Tamil texts of this Act, the Sinhala Text shall prevail. Sinhala text to 
prevail in case of 
inconsistency 
 10.  Schedule E to the principal enactment is hereby 
repealed and the following Schedule is substituted 
therefore:- Substitution of 
Schedule E to the 
principal enactment 
 Provided however, notwithstanding the repeal of the 
Schedule all actions and proceedings taken under the 
repealed Schedule and pending on the day proceeding the 
date on which the new Schedule came into force –   
 (a) shall be deemed to have been or to be, as the case 
may be, duly taken under the repealed Schedule; 
and  
(b) may be proceeded with or continued under the 
repealed Schedule as though that Schedule had not 
been repealed.  
 G/VAL/N/1/LKA/1 
 
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 SCHEDULE "E" (Section 51A)  
Customs Valuation Rules 
Article 1 
1.  The Customs value of any imported goods shall be the transaction value, that is, the price 
actually paid or payable for the goods where sold fo r export to Sri Lanka as adjusted in accordance 
with the provisions of Article 8: 
Provided however- 
(a) that there are no restrictions as to the disposition or use of the goods by the buyer other 
than restrictions that- 
 (i) Are imposed or required by law or by the public authorities in Sri Lanka; 
 (ii) Limit the geographical area in which the goods may be resold; or 
 (iii) Do not substantially affect the value of the goods. 
(b) that the sale or price is not subject to some condition or consideration for which a value 
cannot be determined with respect to the goods being valued; 
(c) that no part of the proceeds of any subseque nt resale, disposal or use of the goods by the 
buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be 
made in accordance with the provisions of Article 8; and 
(d) that the buyer and seller are not related, or where the buyer and the seller are related, that 
the transaction value is accepted for customs purposes under the provisions of paragraph 2. 
2.(a) In determining whether the transaction value is acceptable for the purposes of paragraph 1, 
the fact that the buyer and the seller are related within the meaning of Article 9 shall not in 
itself be ground for regarding the transaction value as unacceptable.  In such case the circumstances surrounding the sale shall be examined and the transaction value shall be 
accepted provided that the relationship did no t influence the price.  If in the light of 
information provided by the importer or otherwise, the Customs Administration has grounds for considering that the relationship influenced the price, it shall communicate its grounds to 
the importer and the importer shall be given a reasonable opportunity to response.  If the 
importer so requests, the communication of the goods shall be in writing. 
(b) In a sale between related persons, the transaction value shall be accepted and the goods 
valued in accordance with the provisions of paragraph I whenever the importer 
demonstrates that such value closely approximates to one of the following occurring at or 
about the same time- 
(i) The transaction value in sales to unrelated buyers of identical or similar goods for 
export to Sri Lanka; 
(ii) The Customs value of identical or similar goods as determined under the provisions of 
Article 5; 
(iii) The Customs value of identical or similar goods as determined under the provisions of 
Article 6. 
 In applying the foregoing tests, due account shall be taken of demonstrated differences in 
commercial levels, quantity levels, the elements enumerated in Article 8 and costs incurred 
by the seller in sales in which the seller and the buyer are not related that are not incurred 
by the seller in sales in which the seller and buyer are related. 
(c) The tests set forth in paragraph 2(b) are to be used at the initiative of the importer and only 
for comparison purposes.  Substitute values may not be established under the provisions of 
paragraph 2(b). G/VAL/N/1/LKA/1 
 
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  Article 2 
1.(a) If the Customs value of the imported goods cannot be determined under the provisions of 
Article 1 the customs value shall be the transaction value of identical goods sold for export to Sri Lanka and exported at or about the same time as the goods being valued. 
 
(b) In applying this Article, the transaction value of identical goods in a sale at the same 
commercial level and in substantially the same quantity as the goods being valued shall be 
used to determine the customs value.  Where no such sale is found, the transaction value of 
identical goods sold at a different commercial level and in different quantities or either of them, adjusted to take account of differences attributable to commercial level and to quantity or either of them, shall be used, pr ovided that such adjustments can be made on 
the basis of demonstrated evidence which clearly establishes the reasonableness and 
accuracy of the adjustment, whether the adjustment leads to an increase or a decrease in the value. 
2.  Where the costs and charges referred to in paragraph 2 of Article 8 are included in the 
transaction value, an adjustment shall be made to take account of significant differences in such costs and charges between the imported goods and the identical goods in question arising from 
differences in distances and modes of transport. 
3.  If in applying this Article, more than one transaction value of identical goods is found, the 
lowest of such value shall be used in determining the customs value of the imported goods. 
Article 3 
1.(a) If the customs value of the imported goods cannot be determined under the provisions of 
Articles 1 and 2, the customs value shall be the transaction value of similar goods sold for export to Sri Lanka and exported at or about the same time as the goods being valued. 
(b) In applying this Article, the transaction value of similar goods in a sale at the same 
commercial level and in substantially the same quantity as the goods being valued shall be used to determine the customs value.  Where no such sale is found, the transaction value of 
similar goods sold at a different commercial level and in different quantities, or either of 
them, adjusted to take account of differences attributable to commercial level and to quantity or either of them shall be used prov ided that such adjustments can be made on the 
basis of demonstrated evidence which clearly establishes the reasonableness and accuracy 
of the adjustment whether the adjustment leads to an increase or a decrease in the value. 
2.  Where the costs and charges referred to in paragraph 2 of Article 8 are included in the 
transaction value, an adjustment shall be made to take account of significant differences in such 
costs and charges between the imported goods and the similar goods in question arising from 
differences in distances and modes of transport. 
3.  If in applying this Article, more than one transaction value of similar goods is found, the lowest 
of such values shall be used to determin e the customs value of the imported goods. 
Article 4 If the customs value of the imported goods ca nnot be determined under the provisions of 
Articles 1, 2 and 3, the customs value shall be determined under the provisions of Article 5 or, 
when the customs value cannot be determined under that Article, under the provisions of Article 6 
except that at the request of the importer, the or der of application of Articles 5 and 6 shall be 
reversed. 
Article 5 
1.(a) If the imported goods or identical or similar imported goods are sold in Sri Lanka in the 
condition as imported, the customs value of the imported goods under the provisions of this Article 
shall be based on the unit price at which the imported goods or identical or similar imported goods 
are so sold in the greatest aggregate quantity, at or about the time of the importation of the goods G/VAL/N/1/LKA/1 
 
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  being valued, to persons who are not related to the persons from whom they buy such goods, 
subject to deductions for the following:- 
(i) Either the commission usually paid or agreed to be paid or the additions usually made 
for profit and general expenses in connection with sales in Sri Lanka of imported 
goods of the same class or kind; 
(ii) The usual costs or transport and insurance and associated costs incurred within 
Sri Lanka; 
(iii) Where appropriate, the costs and charges referred to in paragraph 2 of Article 8; and 
(iv) The customs duties and other national ta xes payable in Sri Lanka by reason of the 
importation or sale of the goods. 
(b) If neither the imported goods nor identical nor similar goods are sold at or about the time of 
importation of the goods being valued, the customs value shall subject otherwise to the 
provision of paragraph 1(a), be based on the unit price at which the imported goods or 
identical or similar imported goods are sold in Sri Lanka in the condition as imported at the 
earliest date after the importation of the goods being valued but before the expiration of 
90 days after such importation. 
2.  If neither the imported goods nor identical nor similar goods are sold in Sri Lanka in the 
condition as imported, then if the importer so requests, the customs value shall be based on the 
unit price at which the imported goods after further processing are sold in the greatest aggregate quantity to persons in Sri Lanka who are not related to the persons from whom they buy such goods, due allowance being made for the value added by such processing and the deductions 
provided for in paragraph 1(a). 
Article 6 1.  The customs value of imported goods under the provisions of this Article shall be based on a 
computed value.  Computed value shall consist of the sum of- 
(a) The cost of value of materials and fabrication or other processing employed in producing the 
imported goods; 
(b) An amount for profit and general expenses equal to that usually reflected in sales of goods 
of the same class or kind as the goods being valued which are made by producer in the country of exportation for export to Sri Lanka; 
(c) The cost or value of all other expenses incurred as set out in paragraph 2 of Article 8. 
2.  The Director General of Customs may not require or compel any person not resident in 
Sri Lanka to produce for examination, or to allow access to any account or other record for the purposes of determining a computed value.  Howe ver, information supplied by the producer of the 
goods for the purposes of determining the customs value under the provisions of this Article may 
be verified in another country by the Director  General of customs with the agreement of the 
producer and provided sufficient advance notice is given to the Government of the country in 
question and the latter does not object to the investigation. 
Article 7 1.  If the customs value of the imported good s cannot be determined under the provisions of 
Article 1 to 6 both inclusive, the customs value shall be determined using reasonable means 
consistent with the principles and general prov isions of the agreement on implementation of 
Article VII of the General Agreement on Tariffs an d Trade 1994 and on the basis of data available 
in Sri Lanka. 
2.  No customs value shall be determined under the provisions of this Article on the basis of- 
(a) The selling price in Sri Lanka of goods produced in Sri Lanka; 
(b) A systems which provides for the acceptance for customs purposes of the higher of two 
alternative values; 
(c) The price of goods on the domestic market of the country of exportation; G/VAL/N/1/LKA/1 
 
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  (d) The cost of production other than computed values which have been determined for identical 
or similar goods in accordance with the provisions of Article 6; 
(e) The price of the goods for export to a country other than Sri Lanka; (f) Minimum customs value; or 
(g) Arbitrary or fictitious values. 
3.  If the importer so requests, the importer shall be informed in writing of the customs value 
determined under the provisions of this article and the method used to determine such value. 
Article 8 
1.  In determining the customs value under the prov isions of Article 1, there shall be added to the 
price actually paid or payable for the imported goods- 
(a) The following, to the extent that they are in curred by the buyer but are not included in the 
price actually paid or payable for the goods:- 
 (i) Commissions and brokerage, except buying commissions; 
(ii) The cost of containers which are treated as being one for customs purposes with the 
goods in question; 
 (iii) The cost of packing whether for labour or materials. 
(b) The value, apportioned as appropriate, of the following goods and services where supplied 
directly or indirectly by the buyer free of charge or at reduced cost for use in connection 
with the production and sale for export of the imported goods, to the extent that such value 
has not been included in the price actually paid or payable:- 
 (i) Materials, component, parts and similar items incorporated in the imported goods; 
 (ii) Tools, dies, moulds and similar items used in the production of imported goods; 
 (iii) Materials consumed in the production of the imported goods; 
(iv) Engineering, development, artwork, de sign work and plans and sketches undertaken 
elsewhere than in Sri Lanka and necessary for the production of the imported goods. 
(c) Royalties and licence fees related to the goods being valued that the buyer must pay, either 
directly or indirectly, as a condition of the sale of the goods being valued to the extend that 
such royalties and fees are not included in the price actually paid or payable; 
(d) The value of any part of the proceeds of any subsequent resale, disposal or use of the 
imported goods that accrues directly or indirectly to the seller; 
(e) The following costs:- 
 (i) The cost of transport of the imported goods to the port of Sri Lanka; 
(ii) Loading, unloading and handling charges associated with the transport of the 
imported goods to the port of Sri Lanka; and 
 (iii) The cost of insurance. 
2.  Additions to the price actually paid or payable shall be made under this Article only on the basis 
of objective and quantifiable data. 
3.  No addition shall be made to the price actu ally paid or payable in determining the customs 
value except as provided in this Article. 
Article 9 In this Schedule unless the context otherwise require- 
"Customs value of imported goods" means the value of goods for the purposes of levying 
ad valorem  duties of customs on imported goods: G/VAL/N/1/LKA/1 
 
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  "Sri Lanka" includes the customs territory of Sri Lanka: 
"Produced" includes grown, manufactured and mined: "Identical goods" means, goods which are the same in all respects, including physical 
characteristics, quality and reputation:  Minor differences in appearance would not preclude goods 
otherwise conforming to the definition  from being regarded as identical: 
"Similar goods" means, goods which although not al ike in all respects have like characteristics and 
like component materials which enable them to perform the same functions and to be 
commercially interchangeable.  The quality of the goods, their reputation and the existence of a 
trademark are among the factors to be considered in determining whether goods are similar. 
"Identical goods" and "similar goods" do not in clude as the case may be, goods which incorporate 
or reflect engineering development artwork, desi gn work and plans and sketches for which no 
adjustment has been made under paragraph 1(b)(iv) of Article 8 because such elements were 
undertaken in Sri Lanka: 
Goods shall not be regarded as "identical goods" or "similar goods" unless they were produced in 
the same country as the goods being valued. 
Goods produced by a different person shall be take n into account only when there are no identical 
goods or similar goods as the case may be, prod uced by the same person as the goods being 
valued: 
"Goods of the same class or kind" means goods which fall within a group or range or goods 
produced by a particular industry or industry sector and includes identical or similar goods: 
Persons shall be deemed to be related only if- 
(a) They are officers or directors of one another's business; 
(b) They are legally recognized partners in business; (c) They are employer and employee; 
(d) Any person directly or indirectly owns, controls or holds 5 per cent or more of the 
outstanding voting stock or shares or both of them; 
(e) One of them directly or indirectly controls other; 
(f) Both of them are directly or indirectly controlled by a third person; 
(g) Together they directly or indirectly control a third person; or (h) They are members of the same family. 
Persons who are associated in business with one another in that one is the sole agent, sole 
distributor or sole concessionaire, however, descri bed of the other shall be deemed to be related 
for the purposes of this Schedule if they fall within the above categories. 
Article 10 
Notwithstanding the provisions of this Schedule, th e Minister may, with the approval of the Cabinet 
of Ministers, in the interest of national econom y or for any other reasons, by Order published in 
the Gazette fix. for such period as may be specified in that Order, minimum values for any goods, 
and the duties on those goods shall be char ged on the basis of such minimum values. 
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