The Special Commodity Levy (SCL) on imported sprats and Maldive fish will fall to Rs. 10 per kilogram from 13 November, President Anura Kumara Dissanayake announced in the 2027 Budget.
The levy on imported sprats drops from Rs. 100 to Rs. 10 per kilogram, while the levy on Maldive fish falls from Rs. 302 to Rs. 10. The levy on powdered and unpowdered dried chillies is reduced by Rs. 50 per kilogram from the same date.
The government said the cuts are meant to ease the effect of rising prices of essential food items on consumers.
The levy on imported sugar moves the other way. It will rise by Rs. 10 per kilogram from 13 November, which the government said is intended to protect the domestic sugar industry and narrow the tax gap between locally produced and imported sugar.
The Budget also proposes a 25 per cent cut in the existing CESS rates on 800 selected Harmonized System (HS) code lines, as part of a programme to reduce import tariffs gradually.
Several other tax changes are set for later dates. The Ports and Airports Development Levy (PAL) on imported newsprint and on batteries used for solar energy storage will be removed from 1 January 2027. The Tourism Development Levy, imposed under the Finance Act No. 25 of 2003, will be abolished from 1 April 2027.
Background
The SCL is a per-kilogram charge on selected imported goods, including several staple foods, and is applied in addition to other import taxes. The CESS is another levy collected on imports. HS codes are the international system customs authorities use to classify traded goods.
Books and other printed materials became subject to Value Added Tax (VAT) in January 2024, while exercise books were taxed even before that date. Under proposed amendments to the VAT Act, No. 14 of 2002, exercise books, textbooks, printed books, dictionaries, encyclopaedias, children’s picture, drawing and colouring books, printed single sheets and printed music would be exempt from VAT, on both import and supply. The change is scheduled for April 2027.
President Dissanayake said the exemption is meant to improve access to education, knowledge and reading by reducing the tax burden on essential educational materials.
The Budget also proposes changing how VAT is calculated on cinema tickets, so that film producers, distributors, the National Film Corporation and cinema hall operators pay VAT on their respective shares of ticket revenue rather than on the full ticket value. The VAT exemptions on Artemia eggs and coconut coir pith would be removed. According to the Budget’s revenue estimates, the VAT revisions would reduce government revenue by Rs. 2.975 billion.
What it means
For households that buy dried fish and chillies, the lower levies reduce the cost of importing these items from 13 November. The Budget does not set retail prices, so how quickly shop prices change will depend on importers and traders passing on the lower levies.
Importers of sugar face a higher levy from the same date, while local producers are the intended beneficiaries of the change, according to the government.
Parents and students would pay no VAT on exercise books, textbooks and similar printed material once the exemption takes effect in April 2027, provided Parliament approves the amendments.
