SSCL on Motor Vehicles from 01.05.2026

Many taxpayers are confused about how the Social Security Contribution Levy (SSCL) applies to motor vehicles after the latest amendment w.ef 01.05.2026 .

To understand the correct position, we must first understand the structure of the First Schedule of the Social Security Contribution Levy Act, No. 25 of 2022.

Understanding Part IA, Part IB & the New Impact

1️⃣ What are Part IA, Part IB and Part II?

Under the SSCL Act, exemptions are categorized under three separate parts of the First Schedule.

Part IA – Articles Relevant for Importation & Manufacturing

Relevant to:

• Section 3(2)(a) – Importation of any article
• Section 3(2)(b) – Manufacture and sale of any article in Sri Lanka

When calculating turnover for importation and manufacturing, the Act refers to Part IA.

Part IB – Articles Relevant for Wholesale & Retail Sale

Relevant to:

• Section 3(2)(d) – Wholesale / Retail sale of any article in Sri Lanka

If an item is listed in Part IB, it affects the turnover calculation for wholesale / retail sales.

Part II – Exempt Services

Relevant to:

• Financial services
• Real estate services
• Other services under Section 3(2)(c)

2️⃣ How Motor Vehicles Became Specifically Covered from 08.09.2023

Through the Social Security Contribution Levy (Amendment) Act, No. 15 of 2023, a new Item 25 was added to Part IA:

Exact Provision

“25. Any motor vehicle identified under Harmonized Commodity Description and Coding Numbers for Customs purpose and liable to the excise duty under the Excise (Special Provisions) Act, No. 13 of 1989, on the importation”

Effect

From 08 September 2023, motor vehicles subject to excise duty were specifically brought within the importation-related framework under Part IA.

Tax Base under Second Schedule:

• Importation of any article = 100% liable turnover
• SSCL Rate = 2.5%

3️⃣ Position Under Wholesale / Retail Prior to 01.05.2026

Prior to the latest amendment:

• No separate motor vehicle item was included in Part IB

Therefore motor vehicle wholesale / retail sales continued under the normal wholesale / retail charging mechanism.

Under Second Schedule:

• Certain wholesale categories = 25%
• Other wholesale / retail categories = 50% liable turnover

4️⃣ Major Change from 01.05.2026 – Part IB Amendment

Through the Social Security Contribution Levy (Amendment) Act, No. 10 of 2026, a new Item 7 was added to Part IB:

Exact Provision

“7. Any motor vehicle effective from May 1, 2026”

Effect

From 01 May 2026, motor vehicles are specifically recognized under Part IB for wholesale / retail purposes.

This changes the treatment of vehicle sales under the wholesale / retail category.

5️⃣ Important Change for Importation from 01.05.2026

The same Amendment Act No. 10 of 2026 also changed Item 25 of Part IA.

Exact Provision

In item 25 of Part IA, substitute the words:

“on the importation;”

with

“on the importation prior to May 1, 2026”

6️⃣ What Does This Mean?

This is the key technical point.

The specific wording previously available for:

Any motor vehicle identified under Harmonized Commodity Description and Coding Numbers for Customs purpose and liable to excise duty…

was limited only to importation prior to 01 May 2026.

Accordingly, from 01.05.2026, that specific treatment under Item 25 has been taken out for future imports.

Practical Result

From 01 May 2026 onwards, motor vehicle importation falls into the normal importation charging mechanism.

Under the Second Schedule:

Therefore:

• Vehicle importation remains liable
• Tax Base = Full import value
• SSCL Rate = 2.5%

7️⃣ Practical Summary

8️⃣ Practical Example

Assume a person imports a motor vehicle on 10 May 2026 and the value determined for customs / VAT purposes is Rs. 8,000,000.

SSCL Calculation:

Result

The importer may be liable to pay Rs. 200,000 as SSCL at the importation stage.

Final Message

From 01 May 2026, the specific Item 25 wording is limited to earlier imports, but motor vehicle imports continue to attract SSCL under the general importation mechanism based on 100% of import value at 2.5%.

Refer : Social Security Contribution Levy (Amendment) Act, No. 10 of 2026