The government plan to provide cash incentives to exporters, based on certain parameters, was announced in the last two budgets to encourage exports from the country. [break]
Those receiving the incentive are Gulmi Coffee Cooperative and Annapurna Coffee Industry, both from the Gulmi district, Shayam Bhandari, president of Nepal Coffee Producers Association, told Republica on Wednesday.
“In addition, three coffee exporters including Hiland Coffee Promotion Company (HCPC) and Everest Coffee Industry will soon apply for the incentive. HCPC alone has exported coffee worth Rs 42 million to South Korea,” said Bhandari, who is also the promoter of HCPC.
These organic coffee producers had applied to the Department of Industry (DoI) with customs declaration of their exports and commercial invoice to claim the incentive.
“We have recommended the banks concerned to provide 4 percent of the total export value as incentive to these two coffee producers as we have found almost hundred percent value addition in their products,” said Govinda Kharel, director of DoI.
According to Kharel, around 30 exporters from different sectors have claimed cash incentives from DoI, which is charged with the responsibility to calculate the incentive amount.
“We have received applications from 30 exporting firms from different sectors including exporters of lentil, plastic products, coffee, carpet, readymade garment, sesame oil and Nepali hand-made products. We are in the process of calculating the incentives for these firms,” said Kharel.
As per the existing cash incentive scheme, exporters of goods with up to 30-50 percent value addition are entitled to get 2 percent of total export revenue as cash incentive. Similarly, those with 50-80 percent value addition are supposed to get 3 percent while for over 80 percent value addition, the cash incentive has been offered at 4 percent of the total export value of a particular product.
Though the government had announced cash incentives for exporters, the implementation of incentive scheme was much delayed due to delay in formulating the Guidelines on Cash Incentive on Export. The guideline was issued by the Ministry of Industry (MoI) on August 18 after Cabinet´s approval.
The government has so far allocated Rs 600 million for paying cash incentives in two consecutive fiscal years. Exporters have been complaining at different forums about the procedural complication in distributing the incentives.
“We are facing procedural hassles in claiming the government-announced incentives. So, we want simplification of the process,” said Pushpa Man Shakya, president of Nepal Pushmina Industries Association (NPIA), at an interaction on Problems in the Export Sectors and Solutions of the Problems, organized by Parliamentary Finance and Labor Relation Sub-Committee on Wednesday.
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