Buying a Duty-Free Permit Vehicle in Sri Lanka: What to Check

Key facts

• A "permit car" is a vehicle that was imported using a Treasury duty-free permit, a concession normally given to senior public officers, military officers above a certain rank, and MPs or provincial councillors.
• As of August 2025, Sunday Times Business Times reported that 25,508 duty-free permits had been issued to public servants since 2020, even while the general vehicle import ban was in force — so these cars are common on the resale market.
• The same report said a typical permit carries a duty concession of up to around Rs. 3.6 million, which is why permit vehicles often look like unusually good deals.
• Permit vehicles were originally meant to stay with the permit holder for five years before being sold on, according to Sunday Times reporting on the scheme.
• If a permit vehicle changes hands within that window, reports describe a tax calculated on the vehicle's CIF (Cost, Insurance, Freight) value that has to be settled with the Commissioner General of Motor Traffic before the transfer is registered.
• These rules and figures change, so confirm the current position with the Department of Motor Traffic (DMT) before you pay a deposit — ask them directly, in person or by phone, rather than relying only on what a seller tells you.
• Many permit vehicles are reportedly resold within a year of import, which is exactly the period when a buyer's tax exposure is highest.

What is a "permit car" in Sri Lanka?

A permit car is simply a vehicle that entered the country under a Treasury-issued duty-free (or duty-concession) permit rather than through a normal commercial import. The permit holder pays far less duty than an ordinary importer would, which is why these vehicles are often priced attractively compared to similar models bought the regular way. The catch is that the concession was given to a specific person for a specific reason, not to make the car cheaper to resell.

Who gets a duty-free vehicle permit?

According to background on the scheme, permits are issued to categories such as Members of Parliament and provincial councillors, senior public officers (doctors, engineers, accountants, university academics, Central Bank staff and similar grades), and military officers from lieutenant colonel (or the equivalent) upward. The idea, going back decades, was to help retain senior staff by letting them bring in a vehicle without the usual tax burden — not to create a vehicle for someone else to buy cheaply.

Can you buy a permit vehicle within five years of import?

You can, but you need to go in with your eyes open. Reporting on the scheme describes a rule that a permit vehicle was not supposed to be sold for five years after import. If you buy one before that period is up, you may need to settle a tax worked out on the vehicle's CIF value before the DMT will register the car in your name — one example quoted a bill of around Rs. 500,000 on top of the normal transfer costs, though the exact figure depends on the vehicle's declared value and the rules in force when you buy. Because this has shifted over time, treat any number you hear from a seller or broker as a starting point, and get the real figure from DMT before you agree to anything.

How much tax could you owe, and who actually pays it?

This is the single most important thing to get straight before you hand over any money. The tax tied to an early transfer is generally understood to fall on whoever is taking the transfer — in other words, you, the buyer — not the original permit holder who already enjoyed the duty saving. If a seller tells you "the tax is already sorted" or "we'll handle the DMT side after you pay," don't take that at face value. Ask to see the figure DMT itself would charge for the transfer, in writing, before you commit. If the seller won't go to DMT with you or won't let you call and ask, treat that as a serious warning sign.

What should you check before buying a permit vehicle?

Start by asking plainly: "Was this imported on a duty-free permit, and when was it first registered?" A straight seller will tell you without being pushed. From there:

• Check the first registration date on the CR book or at the RMV. This tells you how far into (or past) the five-year window the vehicle is.
• Ask for the import and Customs paperwork, not just the CR book. A permit vehicle should have a paper trail showing it came in under a permit, including the declared CIF value, which is the figure any transfer tax would be based on.
• Run an ownership history check at the RMV so you can see whether the vehicle is still registered to the original permit holder or has already passed through other hands. You can read more about checking ownership history in our related guide, and generally how to check a used car before buying, on /safety-tips.
• Call DMT directly and ask what, if anything, would be payable to transfer this specific vehicle into your name today. Don't rely on a verbal promise from the seller or a broker.
• Compare the asking price against similar models using /price-check — if the price looks too good, factor in that a transfer tax bill could close most of the gap.

What mistakes do buyers make with permit vehicles?

The most common mistake is focusing only on the attractive price and skipping the paperwork trail. A permit vehicle advertised well below market value for its mileage and year is often priced that way because the seller expects the buyer to absorb a transfer cost they haven't mentioned. Another mistake is accepting a vehicle that's still registered in the permit holder's name with a promise that "the papers will be sorted later" — if the registered owner is not the person you're paying, you have no real claim until that transfer actually goes through DMT. A third mistake is assuming the five-year rule and the tax figure you read somewhere online are still current; these details have changed before and can change again, so always re-confirm with DMT at the time you buy, not from an old news article or a forum post.

Is leasing or financing a permit vehicle different?

If you're planning to lease rather than buy outright, tell the leasing company upfront that the vehicle was imported on a duty-free permit. Leasing companies check ownership and registration carefully before approving a vehicle, and a permit vehicle with an unresolved transfer or an unclear CIF value can complicate or delay approval. Work out what you can realistically afford first using the calculator at /leasing, then raise the permit background early in the conversation rather than after you've found a car you like.

Checklist before you buy a permit vehicle

• Confirm with the seller, in plain words, that the vehicle was imported under a duty-free permit.
• Check the first registration date against today's date to see where the vehicle sits relative to the five-year mark.
• Get the import/Customs documents showing the declared CIF value.
• Call DMT yourself and ask what would be payable to transfer this exact vehicle now.
• Run an RMV ownership history check to confirm who the vehicle is currently registered to.
• Get any tax or fee the seller claims is "already settled" confirmed in writing by DMT, not just by the seller.
• Compare the price against similar non-permit vehicles on /price-check before deciding it's a bargain.
• If anything about the paperwork feels rushed or vague, walk away — browse other options at /vehicles instead.

If you're still not sure what you're looking at, post the details — model, year, and what the seller has told you about the permit — in the Wahanaya forum before you pay a deposit. Other buyers and sellers who've been through this exact situation can often tell you in minutes whether something looks normal or needs more digging.

Sources

• Huge tax on sale of duty-free permits - Sunday Times
• Duty-Free Permits system under scrutiny - Sunday Times Business Times
• Spotlight on misuse of duty-free vehicle permits - Daily Mirror
• Duty-free permit - Wikipedia
• Stamp Duty - Inland Revenue Department Sri Lanka