The government has resorted to such a step as the dealers, who initiated the imports through letters of credit, have left the vehicles parked at customs yards for months, mainly as the banks have refrained from financing the automobile business over the past few months.[break]
The customs yard in Birgunj currently has more than 200 such vehicles. Likewise, Nepal Automobile Dealers Association (NADA) officials said that an additional 500 vehicles have remained stranded at Kolkata and Haldiya ports.
This has cramped customs operations and hit revenue collection as well, said a senior official at the Department of Customs. Given this situation, Navaraj Bhandari, director general of the Department of Customs, told Republica that customs offices this week warned importers that the vehicles would be seized if they failed to complete the import process soon.
The Customs Act allows the government to seize and auction off imported items if the importers do not completed the import procedure within three months of receiving their consignment at a customs point.
“If the importers are facing problems we will seize all the vehicles and auction them off,” he said.
The warning has rattled vehicle importers. They have flayed the step, tagging it an act to corner them.
“Instead of taking steps to address the problem, the government has preferred to corner us. This is irresponsible,” said a member of NADA.
But given rumors about the government making substantial changes in the duty structure in the upcoming budget, he said the dealers are trying their best to get their imports through speedily.
Some automobile dealers even tagged the customs notice as a desperate move to meet targets for revenue, which has slid over the last one month. The automobile trade is one of the largest revenue generators for the government.
Dealers have been hit by the credit crunch over the third quarter of the current fiscal year, mainly after vehicle imports soared and created a hole in the balance of payments. Subsequently, Nepal Rastra Bank (NRB) tagged auto loans as unproductive lending and discouraged banks and financial institution from issuing such loans aggressively.
Statistics show that Nepal´s vehicle and spare parts imports jumped to Rs 18.22 billion over the first nine months of the current fiscal year, whereas the same was Rs 10.30 billion in the same period last year.
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