What is PAL (Ports and Airports Development Levy) on a Sri Lanka vehicle import?
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.
Also known as: Ports and Airports Development Levy, PADL, PAL
What is the Ports and Airports Development Levy?
The Ports and Airports Development Levy (PAL) is a Sri Lanka import tax designed to fund infrastructure development at the country’s ports and airports. In its final pre-2020 form it was applied at 7.5% of CIF on most imports, including motor vehicles, on top of the customs duty cascade.
Status under the current vehicle import regime
When Sri Lanka reopened personal motor-car imports in February 2025 (Gazettes 2421/41, 2421/43, 2421/44 and the April 2025 update 2434/04), the tax structure for motor cars was rationalised into a single gazetted five-line cascade:
- CID — 20% of CIF
- Surcharge on CID — 50% of CID (effectively 10% of CIF)
- Excise duty — by fuel and engine size
- Luxury tax — 100% of CIF excess over the fuel-specific threshold
- VAT — 18% of (CIF × 1.10 + CID + Surcharge + Excise + Luxury)
PAL is not a separately listed component on the gazetted motor-car cascade. Buyers researching landed-price math through pre-2020 forum threads or older guides will see PAL referenced — under the post-reopen regime it does not appear as a distinct line on a motor-car declaration.
Why this distinction matters
A common buyer concern is that “hidden” levies will appear at customs that weren’t shown on the upfront quote. The pre-2020 stack genuinely included more lines — PAL, NBT, the Cess and the Special Commodity Levy all featured at various points. The current vehicle import stack is the cleanest it has been in over a decade: five lines, all in published gazettes, all reproducible from CIF.
If a quote you receive in 2026 lists PAL as a separate line on a motor-car import, ask the importer to point you to the gazette reference. The current vehicle gazettes are 2421/41, 2421/43, 2421/44 (31 January 2025) and 2434/04 (28 April 2025).
Where PAL still applies
PAL has not been abolished as a tax category — it continues to apply to certain non-vehicle imports such as raw materials, packaging and capital goods that fall outside the CID-bearing tariff lines. For motor cars under HS heading 8703, the simplified five-line stack supersedes the older PAL-inclusive structure.
For the full current motor-car tax stack with worked examples across petrol, hybrid and luxury bands, see our pricing structure.
Related terms
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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.
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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.
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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.
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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.
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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.
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