Nepali traders continue to face problems

Officials from India and Nepal are yet to address problems that have surfaced after scrapping of the duty refundable procedure (DRP) on March 1. The delay has added financial burden on traders who are importing goods like industrial raw material and vehicles from India.
Scrapping of the DRP paved the way for Nepali traders to receive goods at ex-factory rate (devoid of excise duty) and government to collect excise duty at customs points. But soon after the new arrangement was made Indian exporters said Nepali importers should make payment in the US currency if they are to get the supply on ex-factory rates. The problem was settled and Nepali traders are importing good in Indian currency.
But less than three weeks after the new arrangement came into place, traders are faced with yet other problems.
First, Nepali customs officers are imposing 10 percent extra valuation on goods imported from India instead of making the valuation of consignments at ex-factory rate. And second, Indian exporters have been asked by the customs office to dispatch consignments to Nepal only after keeping a collateral of 10 percent of the value of goods.
Shiv Shankar, an Indian customs officer, said the collateral amount has to be arranged by Nepali traders to ensure goods enter Nepal. "The money will be refunded to the Nepali importers later," he said.
To settle the problem, Nepali traders had approached the Indian embassy in the first week of March. But so far Indian officials haven´t communicated with Nepal´s Ministry of Commerce and Supply (MoCS).
"We haven´t heard anything from the Indian side," Naindra Prasad Upadhaya, MoCS joint secretary told Republica on Saturday. However, he said that he had received information from different customs points that imports of excisable goods, like industrial raw material and automobiles, have normalized in the last few days.
"But problems in valuation of imported goods at Nepali customs office remain intact," Pashupati Murarka, vice president of the Nepal Chamber of Commerce and Industries (FNCCI) told Republica on Saturday. This has forced traders to pay extra customs duty since goods worth, say, Rs 100 are being taxed at the rate of Rs 110.
After much problems and hindrance in import of excisable goods, Morang Chamber of Commerce and Industries (MCCI) organized a program in Biratnagar, where customs officials from India and Nepal including Shankar and Binod Kunwar, cusotms chief of Rani Custom´s office of Nepal were present.
"Importers have problems while importing industrial raw materials after scrapping of DRP system," Dinesh Golchha, president of Morang Industry Association (MIA), said during the discussion.
Abhinash Bohara, president of Morang Merchants´ Association (MMA) said: "Customs offices from Nepal and India should work efficiently to clear the confusion that created hurdles in import of excisable goods after scrapping DRP."
(With contribution from Ajit Tiwari in Biratnagar)