TIA customs office releases telecommunication equipment worth over Rs 1 billion imported by NTA after levying Rs 320 million in taxes

Published On: February 9, 2023 02:30 PM NPT By: Dilip Poudel

KATHMANDU, Feb 9: Telecommunication equipment worth about Rs 1.14 billion that were stopped by the customs office at the Tribhuvan International Airport (TIA), were released after the office levied a revenue of about Rs 320 million.

According to the TIA customs office, 13 percent value added tax and 15 percent customs duty were imposed on the equipment. "It is not possible to keep the goods in the airport forever," said the head of the office, Arun Pokharel, "We have sent letters to other agencies for investigation and have collected the revenue and released the equipment."

Pokharel, the head of TIA customs office, said that they have sent a letter to the Commission for the Investigation of Abuse of Authority (CIAA), Nepal Rastra Bank (NRB), Department of Money Laundering Investigation and Department of Revenue Investigation to investigate as there was suspicion of huge amount of foreign currency being sent abroad after overvaluation. According to Pokharel, correspondence has been sent to other agencies for further investigation according to the provision in Section 13 (20) of the Customs Act.

"There is a suspicion that the different pieces of equipment have been overvalued," said Pokharel, "It will be revealed through an investigation by the relevant agency." Customs officials say that there is a problem of under-invoicing in all the goods brought from abroad, and over-valuation is suspected in the case of telecommunication equipment. It is suspected that the purpose of showing high prices may be a plan to send foreign currency abroad.

Similarly, NRB will further investigate the issue of foreign currency. The  CIAA will also conduct further investigation as there may have been irregularities as the equipment was purchased by a government agency. In Sub-section 20 of Section 13 of the Customs Act, there is a provision that "if a customs officer finds that an importer has over-invoiced and imported goods, he may send a written notice to the relevant agency for necessary investigation and action in accordance with the prevailing law." The TIA customs office claims that it has sent a letter for further investigation based on this arrangement.

Servers, laptops, cell phones and other equipment were stopped at the TIA customs office for about four months due to doubts about the value of those equipment during customs clearance. The Nepal Telecommunications Authority (NTA) has procured the equipment for telecommunication traffic monitoring and theft control. Among the goods purchased by the authority are 199 servers. The price of the purchased server is 79,920 US Dollars. If the exchange rate of one dollar is calculated at 128 rupees, the price of one server is 1.2 million rupees. The total price of 109 servers comes to 1.11 billion rupees. Similarly, two laptops have also been purchased. The price of a laptop is shown as 50,000 US dollars i.e. 6.4 million rupees. However, the authority said that it was a drive test and not a laptop.

Likewise, among the equipment, there are eight cell phones. The price of a cell phone is 200 US Dollars i.e. 25,600 rupees. All these pieces of equipment were stopped by the customs office. The NTA has purchased the equipment under the 'Traffic Monitoring and Fraud Control System' project. The equipment was brought by Vanrise Solutions Company from Lebanon. They were also asked to confirm the justification of importing the goods as a large sum of money would go abroad while foreign reserves of the country are in critical condition.

Meanwhile, the NTA claimed that different equipment were purchased through international competition. According to the authority, the equipment was purchased for monitoring internet calls and quality of companies such as Nepal Telecom and Ncell. Purushottam Khanal, chairman of the authority, said that the purchase was made for parallel monitoring of billing, quality, etc. by telecommunication service providers.

The authority started the process of purchasing those equipment during the time of the then chairman of the authority, Digambar Jha. Vanrise Solutions Company was selected from the international competition. The Cyprus-based cell company Vanrise Solutions was awarded the contract by the authority to purchase equipment for the installation of traffic monitoring and fraud control systems.

Government officials are more suspicious as they have purchased goods from 'tax haven' countries. Vanrise Solutions was selected on December 18, 2018 as the authority invited bids for the purchase of goods on October 6, 2017. Although the authority canceled the contract due to problems in the procurement process, the concerned company approached the court. According to the authority, the goods were purchased after the court order. After Khanal became the chairman of the authority, he saw some weakness in the procurement process and canceled it, but he said that the purchase was made after an interim order (stay order) from the court.

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