CESS will be cut on 795 tariff lines from 1 April 2027 under the Budget 2027 proposals, with the levy removed outright on 499 of them and phased to zero across the rest by April 2029.
The cuts form part of the budget unveiled by President and Finance Minister Anura Kumara Dissanayake on Thursday, the Daily FT reported, working from two schedules of tariff lines.
CESS is a border levy charged on top of customs duty, long used in Sri Lanka to shelter local manufacturers from imported competition. Removing it lowers the landed cost of the goods concerned.
The larger list: intermediate and capital goods
The first schedule, “Intermediate and Capital Goods – List of HS 693”, has already seen the levy roughly halved on most of its lines as of 1 April 2026.
- 456 lines become CESS-free from 1 April 2027, including paddy and husked rice, crude palm oil, virgin coconut oil, coloured glass and welded steel tubes. Four further lines on the list were already CESS-free as of April 2026.
- A further 232 lines are cut by roughly 40% to 50% in April 2027. Maize flour drops from 13% to 7%; white cement falls from Rs. 2 to Rs. 1 per kilogram.
- All but one of those 232 become CESS-free from 1 April 2028. The exception is steel T sections, which stay at Rs. 5 per kg in 2027, fall to Rs. 3 per kg in 2028 and reach zero in 2029.
The sensitive list
The second schedule, “Selected Intermediate and Capital Goods sensitive for Local Industries – List of HS 107”, is unchanged until April 2027.
64 of its lines are then cut by 25%:
- Portland cement in packings of 50 kg and below: Rs. 7 to Rs. 5.25 per kg
- Paints: Rs. 150 to Rs. 112.50 per kg
- Motorcycle tyres: 25% or Rs. 300 per kg, to 18.75% or Rs. 225 per kg
Paper packaging, soap wrappers, stationery, polymer dispersions and timber products face similar reductions. Plastic ball point pen barrels keep their 10% rate, but the alternative specific rate falls from Rs. 420 to Rs. 315 per kg.
Sixty-three of those 64 lines halve again from 1 April 2028, and all 64 become CESS-free from 1 April 2029.
The remaining 43 lines on the sensitive list are freed without any phasing from 1 April 2027 — among them marble and granite, roofing and wall tiles, squatting pans, steel bridge sections, aluminium doors and windows, sealed batteries, co-axial and other electrical cables, vehicle radiators, silencers and modular steel buildings.
How the numbers add up
The headline figure reconciles: 499 lines freed outright (456 from the larger list plus the 43 unphased sensitive lines), 64 cut by a quarter and 232 cut by 40–50% give 795 lines changed in April 2027. The two schedules are named for 693 and 107 lines; 64 plus 43 accounts for all 107, while the itemised figures for the larger list — 456 freed, 232 reduced and four already free — total 692, one short of its own title.
Not reported
The filing does not identify which authority issued the two schedules, and at the point where it would name the source its published text carries an unfilled editing placeholder. It gives no revenue cost for the cuts, no estimate of their effect on consumer or construction prices, and no response from local manufacturers in the sheltered sectors — cement, paints, tyres and tiles among them — whose protection falls away on a fixed timetable.
Sourcing note
This account rests on a single verified newsroom. The Daily FT’s report is itself a reading of budget schedules rather than a government statement, and this desk has not seen the underlying documents. A separate Budget 2027 measure cutting the Special Commodity Levy on sprats, dried chillies and other staples — while raising it on sugar — is a different levy on a different schedule and is not part of the CESS changes described here.