By: A Special Correspondent
August 04, Colombo (LNW): Following multiple reports disclosing what it appears to be an unfolding controversy surrounding the importation of BYD electric vehicles into Sri Lanka, with serious allegations that the engine capacities of certain models—most notably the ATTO 3—were deliberately understated to evade taxes, the latest developments indicate that the purported scandal has reached into a depth in which several other BYD models may have also been subjected to similar practices, sources told LNW.
Over 1,000 ATTO 3 units are reportedly being held at customs without release, pending further investigation
Sri Lanka Customs has launched an inquiry into the matter, and officials have accused John Keells CG Auto Pvt. Ltd., the sole authorised agent for BYD vehicles in the country, of not extending sufficient cooperation during the investigation.
The focal point of the investigation concerns the ATTO 3 model, which was declared with a 100kW motor and taxed accordingly. However, it has now been revealed that the actual motor capacity is 150kW, which would subject the vehicle to a higher tax bracket. The company maintains that although the motor installed is indeed 150kW, it is limited to 100kW through ‘firmware’, and thus the declared capacity is accurate. Yet, multiple stakeholders in the automotive sector—including other vehicle importers—have pointed out that Sri Lanka has no formal framework for taxing vehicles based on firmware-limited capacities, and insist that the law must be applied uniformly. Several parties have gone so far as to label this a deliberate attempt to fraudulently circumvent taxes.
Latest developments indicate that the other BYD models subject to the so-called firmware shift are as follows:
- The BYD Dolphin Dynamic was taxed under the 49kW category, though its original motor capacity is 70kW.
- The BYD Dolphin Premium was taxed under the 99kW category, despite having a motor capacity of 150kW.
- The BYD M6 was taxed under the 100kW category, although its original motor capacity is 120kW.
- The BYD Seal Dynamic was similarly taxed under the 100kW category, but has a motor capacity of 150kW.
Industry experts argue that, under current law, this constitutes the submission of false declarations to Customs and results in significant tax revenue losses for the government—a situation they describe as extremely serious.
John Keells CG Auto Pvt. Ltd., a joint venture between Sri Lanka’s corporate giant John Keells Holdings Ltd. and Nepal’s leading conglomerate, Chaudhary Group Ltd., is at the centre of the controversy. Despite the scale and influence of the two entities, industry sources claim the matter has escalated beyond the point where it can be brushed aside as a “minor error” or a “simple misunderstanding”, nor can it be pinned solely on gaps in the Customs system.
Further complications are anticipated in Nepal as well, given that Chaudhary Group has been responsible for BYD imports there too. The outcome of the Sri Lankan inquiry may therefore set a precedent with cross-border implications.
In Sri Lanka, John Keells CG Auto Pvt. Ltd. has made substantial investments in showrooms, service centres, charging infrastructure, and marketing campaigns in support of BYD’s entry into the local market. Over 1,000 BYD vehicles imported at considerable cost remain stuck at port, and a significant number of customers who paid advance deposits are still awaiting delivery of their vehicles. The situation has become increasingly complex and fraught with financial implications.
Industry sources warn that if Sri Lanka Customs were to accept the company’s justification regarding firmware-limited motors, it would open the floodgates for similar tactics by other importers, potentially resulting in a massive loss of government tax revenue running into billions of rupees. Such a loss is something Sri Lanka, still recovering from a severe financial crisis, is in no position to absorb.
In light of these developments, sources within the industry describe the current scenario as an intricate and escalating mess—one not easily untangled.
