Economic slowdown forces traders to defer customs clearance of imported goods

Published On: March 29, 2023 09:49 PM NPT By: Republica | @RepublicaNepal

Large number of imported automobiles and trucks loaded with imported goods remain stranded at customs: DoC

KATHMANDU, March 29: A total of 2,380 imported automobiles and trucks loaded with imported goods have remained stranded at the Birgunj Dry Port after the importers were reluctant for customs clearance, citing the low demand at present.

According to the automobile dealers, they have been facing a slump in their business due to the ongoing economic slowdown in the country. The dealers imported the vehicles by opening letter of credits (LCs) at the banks after the government lifted the import restrictions.

The records with the Department of Customs (DoC) show that over 4,000 imported automobiles and loaded trucks have been waiting for customs clearance at various entry points across the country. Of them, around 60 percent are at the inland container depot of Birgunj customs.

According to Nepal Intermodal Transport Development Board, which operates the Birgunj Dry Port, 563 cars, 75 jeeps and 878 units of chassis of new trucks have been left stranded at the dry port. Likewise, there are 412 trucks loaded with imported goods at the customs point.

Automobile dealers say that automobile sales in the last few months fell to a mere 20 percent compared to sales of last year. It has increased marginally in recent days.

By almost the end of the nine months of the current fiscal year, the government’s capital expenses stood at mere 24 percent of the total allocated budget. Similarly, the banks have not been providing credits to purchase automobiles, citing a massive rise in their non-performing assets. These have taken down largely the purchasing power of the people.

Dhruba Thapa, president of Nepal Automobile Dealers’ Association, said most of the automobile dealers are not ready to pay the customs duty until they receive a notable demand from the market.

With a delay in making clearance by the importers, the customs yard has been overwhelmed by the large number of imported goods. On the other hand, the government is also losing its customs revenue at the time the government is struggling to manage adequate financial resources to keep running the bureaucratic operation.