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.e.f 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 ,Part II of First Schedule

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.

3️⃣ Position Under Wholesale / Retail Prior to 01.05.2026

Prior to the latest amendment:

• No separate item for motor vehicles was included in Part IB

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

Under Second Schedule Liable Turnover was:

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

4️⃣ Major Change from 01.05.2026 –Amendment to  Part IB

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 exempted under Part IB for wholesale / retail purposes.

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” 

This means exemption of importation of motor vehicles subject to Excise Duty  will be removed w.e.f 01.05.2026

6️⃣ What Does This Mean?

This is the key technical point.

The specific wording previously available for:

Any motor vehicle identified under Harmonized Commodity(HS) 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.

Liable Turnover for SSCL on Importation

For a taxable person engaged in importation, the liable turnover for SSCL purposes is the value of the imported article determined under Section 6 of the Value Added Tax Act, No. 14 of 2002.

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 will be liable to pay Rs. 200,000 as SSCL at the importation stage.

Final Message

From 01 May 2026, motor vehicle imports  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