KATHMANDU, Oct 7: The Council of Ministers has approved a new customs bill, currently in the process of being registered in parliament, that allows export industries to import industrial raw materials without paying customs duty. This long-awaited provision aims to support industries to import essential raw materials.
As per the proposed bill, industries that export their products through the banking system or domestically in convertible foreign currency will be eligible to import the required raw materials and auxiliary resources for production by providing a cash security as specified. This security will be refunded upon the completion of exports or the sale of goods in foreign currency. In cases where industries do not meet these conditions, the deposited amount will be directed to the revenue account, with an additional 15 percent fee, as outlined in the bill.
Industrialist Rajesh Agarwal has welcomed this provision, noting its importance in boosting the country's exports. However, he suggests that the option for export industries to import industrial raw materials using a bank guarantee, rather than cash, would further enhance efficiency.
Import of industrial raw material decreases
Similarly, Agarwal emphasizes the urgency of implementing this system to encourage investments and expedite the import process. He points out that the existing customs and VAT payment procedures, along with lengthy production timelines and export subsidies, have hindered investment. Therefore, a practical approach that prioritizes bank guarantees for raw material imports would be highly beneficial for export-oriented industries.
Agarwal also stresses the importance of avoiding complicated procedures and ensuring that the Customs Act aligns with practical realities, rather than merely making sweeping announcements of concessions for energy-intensive industries.
Meanwhile, Punya Bikram Khadka, the director of the Department of Customs, mentioned that the government has introduced a new customs bill, incorporating the latest issues covered by its international commitments. The new bill primarily retains the existing customs administration and inspection procedures. However, it takes into account certain international commitments that Nepal has undertaken. Once this bill is enacted, it will replace the existing Customs Act of 2066 BS.
The bill also includes provisions for establishing procedures to grant tax exemptions on fuel used in international flights, aircraft fuel, spare parts, equipment, and in-flight food and beverages.
Furthermore, this bill introduces regulations to exempt duty on goods of very low value. It stipulates that specific items and their respective price thresholds eligible for duty exemption will be outlined in the regulations for goods imported or exported through the post office. One notable feature of the new customs duty is the absence of a minimum duty collection requirement.
To enhance customs administration, the new bill introduces a provision for distinct uniforms, identity cards, and badges for customs employees. It mandates that customs officers wear the designated uniform while performing their duties.
