As per a circular issued by Nepal Rastra Bank (NRB) on Friday, the incentive can be collected upon submission of documents such as a proof of export, a letter from the Department of Industry (DoI) that shows the amount of VAT and documents that proves the payment from importer in convertible currency in the exporter´s bank account. [break]
Earlier, exporters could collect incentive only from the branches of commercial banks in Kathmandu Valley.
"This new development will definitely help exporters as they can now collect incentive amount from branch offices of banks scattered all over the country,” Shankar Pandey, former president of the Nepal Pashmina Manufacturers Association (NPMA), told Republica.
According to the circular, branch offices of commercial banks can claim for reimbursement either through their respective corporate offices or directly through the Foreign Exchange Department (FED) at NRB. "However, the reimbursement will be made only for those incentives which are distributed by completing all the process mentioned in the cash incentive guideline 2013," reads the circular.
The central bank, which oversees the distribution of incentives to exporters, has said the reimbursements will be made within seven days since the day of filing claims by commercial banks.
“This new arrangement will benefit small and medium level enterprises outside Kathmandu Valley," Udaya Raj Pandey, president of Garment Association of Nepal (GAN) said. "We had long been demanding for such facility.” He further added that many exporters had to visit Kathmandu just to collect their incentives.
The government had introduced the program -- only for those who export against convertible currency in third countries -- in the budget of fiscal year 2009/10. "The drive to boost export by providing incentive to the exporters has got a new momentum as the NRB simplified the ways to collect it,” Pandey explained.
The government has identified a total of 32 exportable products such as refined coffee, leather, handicrafts, honey, noodles and transformer, among others, for export incentive facility. In a bid to simplify the process of collecting incentive, the government recently introduced flat cash incentive rates of one percent and two percent of the total export volume, depending on the value addition.
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