The Cabinet of Ministers has approved the appointment of a committee to provide temporary monitoring relief and introduce a long-term regulatory framework for e-commerce activities.

According to the government, the new committee will comprise officers in relevant institutions.

The government states that the volume of imports to Sri Lanka through cross-border e-commerce has increased with the rapid growth of e-commerce activities in the country. 

As such, the government believes the necessary regulations must be introduced for the collection of tax income from e-commerce activities that could provide special economic benefits. 

Identifying certain shortcomings in the customs clearance procedure followed regarding imports across e-commerce platforms, the government amended the customs clearance procedure of Sri Lanka Customs.

However, the delays, escalating transaction costs, disruption of public trust, decline in transparency and predictions regarding prices caused due to the execution of those amendments have created unrest among e-commerce platform users, especially individual commuters and small-scale importers. 

Accordingly, the Cabinet has approved the proposal by the President, in his capacity as the Minister of Finance, to appoint a committee to provide temporary monitoring relief and introduce a long-term regulatory framework for e-commerce activities. (Newswire)

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Local industry groups are urging comprehensive reform of Sri Lanka’s cross-border e-commerce framework, warning that policy gaps and Customs loopholes are enabling tax evasion, distorting the market, and threatening legitimate businesses. The unregulated activity cost Sri Lanka’s Treasury around Rs. 50 million in tax revenue daily, the groups pointed out.

Chairman of the Global Shippers Forum Sean Van Dort said that despite public claims of cracking down on imports from platforms such as Temu and AliExpress, authorities have not curbed such activity.

“There has been much talk about stopping imports from Temu and AliExpress, but in reality, these e-commerce operations continue,” Van Dort said. “Customs has only recently begun charging duties correctly under proper HS codes. Where were these taxes paid before? Which government collected this revenue? It has gone into someone’s pocket,” he alleged, adding that these platforms also lack systems for customers to return goods.

Courier Express Parcel Association of Sri Lanka (CEPAC) Vice President Sanjay Samarasinghe commended Sri Lanka Customs for introducing Harmonised System (HS) codes, calling it a significant step forward. However, he stressed that more needs to be done to align Customs procedures with international standards.

“How can T-shirts be imported at prices lower than what it costs to produce them locally?” Samarasinghe asked. “Can these e-commerce platforms produce proper Customs declarations, invoices, match and reconcile the figures? Where is this revenue going?”

He alleged that tens of thousands of parcels were being cleared daily without proper documentation, including high-value medical equipment disguised as personal imports to avoid regulatory scrutiny.

Samarasinghe also pointed to the absence of a structured e-commerce policy and a functioning ‘de minimis’ threshold, calling for a standardized system to ensure transparency and revenue collection.

Yasodaran Paramanantham, former President of the Sri Lanka Apparel Brands Association, said weak border controls have resulted in a flood of low-quality apparel imports, undermining the local apparel market. He estimated losses to the Treasury at around Rs. 50 million and warned that without stronger Customs enforcement, the domestic manufacturing sector could face severe setbacks. (Newswire)

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Opposition Leader Sajith Premadasa has proposed a four-step plan to address the disruptions caused by recent changes to Sri Lanka’s cross-border e-commerce customs procedures.

Following a shift from a flat per-kilogram customs fee to a valuation based on HS codes, many online buyers and small-scale importers have reported delays, unexpected charges, and halted shipments. The change was implemented without prior notice.

Premadasa stated that the lack of a centralized, transparent system to check duty and VAT calculations has created uncertainty for consumers. He also noted that Sri Lanka’s market size makes it difficult to implement tax collection models used in larger economies like the European Union, where platforms collect duties at checkout.

In response, he outlined the following proposals:

1.  Advance Notice and Transparency – Require Customs to provide reasonable notice before implementing new rules and publish a simplified duty table with examples on the official website and courier platforms.

2. Defined Threshold for Small Parcels – Introduce a clear limit under which parcels (such as personal items or gifts) are subject only to VAT, with no additional duties or charges.

3. Courier Pre-Payment System – Allow courier services to file HS codes in advance and pay duties in bulk at the airport, enabling faster parcel clearance within 24 hours. Customs could continue random audits to ensure compliance.

4. Online Duty Payment Portal – Develop an online payment system via LankaPay, allowing buyers to pay applicable duties immediately using their parcel tracking number.

Premadasa said these measures could reduce delays and confusion, and help protect micro-entrepreneurs and online buyers affected by the ongoing disruptions. (Newswire)

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Sri Lanka Customs has denied claims of introducing a new tax on small parcel imports, clarifying that recent changes are aimed solely at ensuring the correct customs duty is charged based on product value and classification.

Customs Media Spokesman and Additional Director Seevali Arukgoda said that contrary to reports circulating on social media, there has been no increase in tax rates or halting of parcel clearances.

“We are not increasing the duty; we are simply charging the correct amount now. The issue earlier was that many items were undervalued, and taxes were not calculated based on their actual value. We’ve now corrected that,” Arukgoda stated.

He emphasized that customs is not stopping any parcels and that there has been no hike in duty beyond what is stipulated by Parliament. “People claimed duties were higher, but it’s the same approved tax that we are now enforcing properly,” he added.

Arukgoda also noted that the older system, which relied on parcel weight or flat fees, led to misuse and manipulation, particularly with under-invoicing. Sri Lanka Customs has now shifted to a system based on the HS Code (Harmonized System) classification of goods, which better reflects the actual nature and value of each item.

The Customs Department had notified courier companies and importers in advance, giving a month and a half of notice before implementation and providing two weeks to adjust to the new system.

“There is no hold-up at Customs. Anyone who pays the correct duty can collect their parcel without delay. We’ve not imposed any additional duty; we’re just ensuring it’s applied properly,” Arukgoda explained.

He further clarified that recipients of online orders are not required to visit Customs offices themselves, as courier services handle clearance and delivery.

The move comes amid growing concerns over the misuse of small-scale import channels, and the government has pledged to introduce fair exemptions for educational and research-related imports as required. (Newswire)

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European Union antitrust officials asked Chinese online shopping sites Temu and Shein to show they are complying with the bloc’s key regulations of technology companies, including how the sites are protecting minors.

The companies have been asked to provide information on their compliance with the Digital Services Act by July 12, European Commission regulators said Friday in a statement. The commission will assess its next steps after receiving the information and could open a formal investigation, according to the statement.

Temu and Shein must show how they are protecting European consumers from illegal products, among other issues, the regulators said. The commission said it was responding to a complaint against the online sites from consumer organizations.

The EU’s Digital Services Act has strict rules to prevent the spread of misinformation for what the commission calls very large online platforms, defined as having over 45 million active users.

Temu, a unit of PDD Holdings Inc., made a leap in awareness in the US after a major advertising campaign tied to the Super Bowl in February. Online fashion site Shein had been considering an initial public offering in the US, but changed those plans to focus on going public in London. (Bloomberg)

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