Sri Lanka Car Import Glossary

Odometer (verification)

Japanese auction houses verify the displayed odometer reading against the vehicle's service records. A verified reading carries the auction-house mileage mark; an asterisk indicates the inspector could not verify (usually because the digital cluster was replaced).

R grade (and RA grade)

R and RA are auction-house grades indicating that the vehicle has had accident-repair work — frame-straightening or replacement panels welded into structural positions. R/RA cars carry a significant resale discount in Japan and are generally not suitable for personal-use import to Sri Lanka.

TAA auction

Toyota Auto Auction — a major Japanese vehicle auction network operated by the Toyota group. TAA is one of the four primary auction sources for used cars exported to Sri Lanka, alongside USS, JU and HAA.

USS auction

The largest used-vehicle auction operator in Japan, holding weekly auctions in Tokyo, Yokohama, Nagoya, Osaka and Kyushu. USS auctions move 100,000+ vehicles per week and are the primary source for most used cars exported to Sri Lanka.

Vehicle grade

The overall condition rating assigned by Japanese auction-house inspectors on a 0–S scale. Grade 4 or higher is the standard target for a Sri Lankan personal-use import; grade R or RA indicates accident-repair history; grade 0 indicates major undisclosed damage.

CID (Customs Import Duty)

Customs Import Duty — the first line in Sri Lanka's vehicle import tax stack, set at 20% of the declared CIF value. CID is followed by a 50% surcharge (effectively 10% of CIF), then excise duty, then VAT, then luxury tax where applicable.

CIF

Cost, Insurance, Freight — the value of a vehicle when it arrives at the Sri Lankan port, before any local taxes are applied. CIF is the base on which all Sri Lanka import taxes (CID, surcharge, VAT, excise, luxury) are calculated.

Customs surcharge

A 50% surcharge applied on top of Customs Import Duty (CID) — effectively 10% of CIF — added to Sri Lanka's vehicle import tax stack effective February 2025. The surcharge is the second line in the tax cascade after CID and before excise duty.

Excise duty

A per-cubic-centimetre or per-kilowatt tax applied to motor vehicles imported into Sri Lanka, set by fuel type and engine band. Effective February 2025, excise rates range from LKR 1,000/cc for small petrol PHEVs to LKR 11,000/cc for large petrol engines, plus age surcharges for vehicles older than 3 years.

FOB

Free On Board — the price of a vehicle at the port of export in Japan, before insurance and freight are added. FOB plus insurance plus freight equals CIF, the base on which Sri Lanka import taxes are calculated.

Luxury tax

A 100% tax applied to the portion of CIF exceeding fuel-specific thresholds. Effective April 2025 (Gazette 2434/04), the threshold is LKR 5M for petrol and diesel, LKR 5.5M for hybrids and PHEVs, and LKR 6M for EVs. Luxury tax is the single largest line on premium vehicles like the Vellfire, Land Cruiser and BMW 7 Series.

PAL (Ports and Airports Development Levy)

A historical levy on imports into Sri Lanka, applied at 7.5% of CIF in its final pre-2020 form to fund port and airport infrastructure. PAL is not separately listed on the post-February-2025 motor-car tax stack — its function has been consolidated into the gazetted five-line cascade (CID, Surcharge, Excise, Luxury, VAT). Buyers researching pre-2020 import guides will encounter PAL but do not see it as a separate line on a 2026 motor-car landing today.

SSCL (Social Security Contribution Levy)

A 2.5% turnover-based levy introduced under the Social Security Contribution Levy Act No. 25 of 2022. SSCL is not separately listed on the gazetted post-February-2025 motor-car tax cascade — the vehicle import stack is consolidated into CID, Surcharge, Excise, Luxury and VAT. Buyers occasionally see SSCL referenced colloquially as "SRL", but the canonical statutory term is SSCL.

VAT

Value Added Tax — applied at 18% in Sri Lanka's vehicle import stack on the cumulative base of CIF×1.10 + CID + Surcharge + Excise + Luxury. VAT is the final tax line before business costs and is often the second-largest contributor to landed price after excise duty.

CRIB

The Credit Information Bureau of Sri Lanka — the central credit bureau that every bank and NBFI consults before approving any motor-vehicle lease. The CRIB report shows your outstanding facilities, 24+ months of payment history and any defaults. A clean CRIB is a precondition for lease approval; recent defaults or undisclosed facilities are the most common reason otherwise-strong applications are rejected.

NBFI

Non-Bank Financial Institution — leasing and finance companies that provide motor-vehicle credit alongside or instead of banks. NBFIs hold the majority of Sri Lankan motor-vehicle leases. Major players include LOLC, LB Finance, People's Leasing, Pan Asia Bank and Seylan.

Colombo Port

The primary international port of Sri Lanka and the main entry point for vehicles imported via Roll-on Roll-off (RoRo) shipping from Japan. Most Car Dreams imports clear customs at Colombo Port before delivery to the buyer's city.

Hambantota Port

Sri Lanka's deep-water port on the southern coast, used as an alternative to Colombo Port for vehicle imports. Hambantota frequently offers shorter customs queues and is closer for delivery to southern destinations like Galle, Matara and Tangalle.

RoRo shipping

Roll-on Roll-off — the standard ocean-freight method for shipping used cars from Japan to Sri Lanka. Vehicles are driven onto a specialized RoRo vessel in Yokohama, Nagoya or Osaka and driven off at Colombo or Hambantota port. Transit time is typically 3–4 weeks.

Auction sheet

A one-page inspection report produced by an independent auction-house inspector when a used car enters a Japanese auction. It records overall grade, interior and exterior letter grades, accident-repair history, odometer verification and panel-level defects.

Bill of Lading (BL)

The shipping contract and title document issued by the carrier (RoRo line) when a vehicle is loaded at a Japanese port. The BL is required by Sri Lanka Customs at clearance, names the consignee, and authorises release of the cargo at Colombo or Hambantota. Without an original or telex-released BL, the car cannot be discharged from the terminal.

HS Code (Customs Tariff Heading)

A six- to ten-digit number that classifies an imported vehicle for tax purposes. Motor cars sit under heading 8703, with sub-headings determined by fuel type and engine size. The HS Code drives the excise band and the luxury threshold flag — a single classification step decides millions of LKR in tax.

JAAI

The Japan Auto Appraisal Institute — an independent body that performs pre-shipment inspections on used vehicles being exported from Japan. A JAAI inspection certificate is required by Sri Lanka Customs at the time of import and confirms the vehicle is roadworthy and matches its declared specifications.

Pre-shipment inspection

A mandatory inspection performed in Japan before a used vehicle is loaded onto a RoRo vessel for export. The Japan Auto Appraisal Institute (JAAI) issues the certificate, which Sri Lanka Customs requires at clearance. PSI confirms the vehicle is roadworthy and matches its declared specifications.

CBSL

The Central Bank of Sri Lanka — the regulator setting macroprudential rules for vehicle financing. CBSL's July 2025 directive capped motor-vehicle loans at 60% loan-to-value, requiring buyers to pay a minimum 40% cash down payment.

DMT

The Sri Lankan Department of Motor Traffic (formerly the Registrar of Motor Vehicles) — the government department responsible for vehicle registration, license plates and motor-vehicle records. Every imported car must be registered with the DMT before it can be driven on Sri Lankan roads.

LTV cap (60%)

A regulatory cap on motor-vehicle loans set by the Central Bank of Sri Lanka effective July 2025. Banks and NBFIs can finance up to 60% of the vehicle's landed value, requiring a minimum 40% cash down payment from the buyer.

CVT

A type of automatic transmission that uses a belt-and-pulley system to provide a continuous range of effective gear ratios, instead of the fixed gears in a traditional automatic. CVT is the dominant transmission type in modern Japanese hybrids and small-engine vehicles.

EV (Electric Vehicle)

A battery electric vehicle — a car powered entirely by a battery and electric motor, with no petrol engine. EVs in Sri Lanka are taxed per motor kilowatt rather than per cc, with excise at LKR 12,000 per kW and a higher luxury threshold (LKR 6M) than petrol or hybrid cars.

Honda Vezel

A compact SUV produced by Honda since 2013, sold globally as the Honda HR-V (or as the Honda HR-V outside Japan). The Vezel is the most-imported step-up SUV in Sri Lanka — typical landed price LKR 13–22M depending on year and grade. Hybrid and petrol variants are both common.

Hybrid (petrol hybrid)

A vehicle with both a petrol engine and an electric motor, where the battery is charged by regenerative braking and engine load — not by plugging in. The dominant Japanese powertrain since the original Toyota Prius (1997). Hybrids attract significantly lower Sri Lankan import excise than equivalent petrol vehicles.

JDM

Japanese Domestic Market — refers to vehicles sold by manufacturers within Japan, often differing from export-market versions in equipment, badging or performance. Most cars on Car Dreams are JDM-spec, since they're sourced direct from Japanese auctions.

Kei car

A Japanese vehicle class with a strict legal limit of 660 cc engine displacement, 3.4 m length and 1.48 m width. Kei cars dominate Japan's domestic small-car market and import cheaply to Sri Lanka because they fit in the lowest customs and excise bands. Examples include the Suzuki Wagon R, Daihatsu Move and Honda N-Box.

PHEV

A plug-in hybrid electric vehicle has a larger battery than a self-charging hybrid and can be charged from a wall socket, giving 30–80 km of pure electric range before the petrol engine takes over. PHEVs attract Sri Lanka's lowest petrol-side excise rate.

Toyota Aqua

A 1.5 L petrol-hybrid hatchback produced by Toyota since 2011. Sold globally as the "Prius C", the Aqua is one of the most popular first cars in Sri Lanka — landed prices typically run LKR 11–14M, and real-world fuel economy reaches 25–35 km/L.