India levies 4.5% service charge on third-country imports

January 30, 2017 01:00 AM Binod Subedi

BIRATNAGAR, Jan 30: India has started levying 4.5 percent service charge on transport of Nepal's third country imports.

Industrialists say the southern neighbor is levying additional charges under insurance and threat headings. Industrialists of eastern Nepal have opposed the decision stating that India was levying fee on service that it is not providing. Nepal will have to pay India billions of rupees annually if the service charge is not removed. 

Local industrialists have urged India to rollback the decision at the earliest.

Pradip Murarka, vice president of Chamber of Industries, Morang, said that India started 4.5 percent service charge on transport of Nepal's third-country imports from January 22. “The decision will increase price of imported goods in the Nepali market. As transportation accounts for 10 percent of total cost, the decision will make immediate impact in the market,” he added.

He further added that though India was free to levy tax or other charges on goods imported from India, it cannot levy any charge on third-country imports. 

Around 8,000 containers come to Nepal from different countries via Kolkata Port ever month. Cooking oil, coal, iron and steel and fertilizers, among others, are the major commodities imported via Kolkata port.

Mahesh Jaju, former president of Morang Industrial Association, said that cost of production of Nepali goods will increase if the service charge is levied. “It will be very difficult to compete with Indian products. The government should immediately request India to remove the service charge,” he added.

According to the eastern regional office of Trade and Export Promotion Centre (TEPC), eastern Nepal imports goods worth Rs 60 billion annually from different countries via India. In Fiscal Year 2015/16 goods worth Rs 58 billion were imported to eastern Nepal via India.


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