Bhairahawa SEZ

Industries deprived of customs tax waiver due to legal ambiguities

Published On: September 30, 2018 03:05 AM NPT By: Rekha Bhusal

BUTWAL, Sept 30: Industries in the Special Economic Zone (SEZ), Bhairahawa, are facing trouble of operation due to legal and procedural ambiguities. 

For instance, the Special Economic Zone (SEZ) Act has a provision of customs tax waiver on machinery goods and raw materials for industries inside the SEZ. However the customs office is not ready to give the tax waiver, claimed Dipak Jha, promoter of Shakti Minerals.

The company had imported machineries like HHI and VSI from India on August 26 this year. Although he had submitted an application to the customs office as per the due process laid out by the SEZ Act, the customs office refused to give him tax waiver. 

For more than 15 days, the company’s 18 vehicles carrying machineries worth Rs 80 million have been stranded at the customs premises. And for that, the company has paid almost Rs 1.3 million in detention charge, Jha told Republica.

“It is getting difficult for us to enjoy the rights provided by the SEZ Act,” he said. “Instead of getting the waiver, we are paying detention charge.” 

The company paid Rs 150 million bail to release its own goods from the customs office, said Prakash Maharjan, Chief Executive Officer of the company. 

On the other hand, Kaliram Poudel, information officer of Bhairahawa Custom Office, said that the Act has not mentioned about the customs tax waiver clearly so they cannot provide the waiver to importers.

“Finance Act 2018 does not mention anything about custom tax waiver. So we have released their goods on bail,” Poudel said. 

According to Sundar Thapa, spokesperson for SEZ, custom tax waiver has been mentioned in the SEZ Act, while the Finance Act has no mention of it. “That is the reason why the industrialists are facing troubles,” he said. 

One of the officials from SEZ said that the Finance Ministry itself is oblivious about the provisions listed in the SEZ Act. 

SEZ to cancel registration of six industries
Bhairahawa Special Economic Zone (SEZ) Authority is preparing to cancel registration of six industries, following their neglect of the authority’s call for industry operation agreement and registration. The SEZ Authority had sent a notice to the industries in September for lease agreement. 

The six industries to face action are: Jagadamba Synthetic Pvt Ltd, Kiran Shoes Manufacturers Pvt Ltd, Asian Thai Foods, Axel Garment Processing Pvt Ltd, and Mineral Water Industry of Shyam Kumar Loniya. The SEZ has a total of 69 plots, for which 29 industries have taken permission of operation. Of them, 18 industries have already started registration process after completing lease agreement.

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