#Reduced duty on chocolates

CIAA to investigate undue benefit allegedly taken by Vishal Group’s subsidiary

Published On: August 23, 2021 08:44 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 23: A complaint has been filed at the Commission for the Investigation of Abuse of Authority (CIAA) against United Distributors Nepal, a subsidiary of Vishal Group, which allegedly received undue benefits by making the government revise import taxes on chocolates.

According to an official of the CIAA, the company has been accused of cheating the consumers by not reducing the price of its products even after receiving the tax benefits from the government. Yubaraj Khatiwada, the then finance minister of KP Oli-led government, through the budget for the fiscal year 2020/21 had reduced custom duty on cocoa mixed chocolates from 40 percent to 30 percent.   

Khatiwada had been criticized heavily for reducing the customs duty on the imported chocolates, which are considered conspicuous goods, while the duty on imported powder milk used as baby food and electric vehicles were increased by many folds. On the pretext of filling the revenue gap resulting from the COVID-19 pandemic, the budget had increased the customs duty of electric vehicles from 30 to 80 percent and excise duty from five percent to 80 percent.

Khatiwada was accused of unduly favouring the Vishal group, which holds around 60 percent market share in this type of imported chocolates. In 2019/20, the government had collected revenue worth around Rs 2 billion from the imported chocolates. Based on the figure, the state lost a huge amount of revenue just for reducing the duty on imported chocolates.

Meanwhile, the CIAA registered a total of 1,806 complaints in over a month of the current fiscal year. Of them, 1,038 complaints were filed at the CIAA head office, while the remaining others were registered at its eight offices outside the Kathmandu Valley.     



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