After almost a month-long silence, India has finally acknowledged that
its ambiguous notification issued while scrapping duty refund procedures
(DRP) created confusions among Indian exporters, prompting them to seek
payments in US dollar to make excise duty-free supply.
Indian Finance Ministry on Monday issued a fresh notification, clarifying to exporters that they can accept payments in Indian currency as well. It has notified that their supply made against Indian currency will still be regarded as exports, and exporters will not be charged excise duty on such exports.
“It is clarified that exports to Nepal will continue to be permissible irrespective of whether the payments are made in Indian currency or foreign convertible currency as long as they are in accordance with applicable Reserve Bank of India (RBI) guidelines,” reads the new notification that India´s Department of Revenue issued to its customs official.
Contrary to latest preciseness, India in its previous notification issued on January 13 had said that ´abolishment of DRP puts export to Nepal at par with exports to other countries except Bhutan´.
Following such notification, Indian exporters since the scrapping of DRP on March 1, had been demanding Nepali importers to make payments in US dollar and brought imports of excisable goods, which largely includes industrial raw material and vehicles, to a grinding halt for two weeks. Nepal Rastra Bank (NRB) allows payments in dollar for only 250 items.
Later, some Indian exporters started accepting payments in Indian currency but forced Nepali importers to pledge additional 10 percent payments as collateral to make sure the goods reached Nepal. This arrangement compelled the importers to pay more in excise duty at the customs.
Such confusion caused many Aerated drinks manufacturers like Barun Beverages, beer manufacturers and many other companies to incur additional cost. Industries like cement factories were on the verge of closure as they could not import raw materials and fuel were fast running out of stocks.
“We are hopeful the notification will make imports smooth and thankfully it came before we ran out of our stock of raw materials,” said Pashupati Murarka, vice president of federation of Nepal Chamber of Commerce and Industries (FNCCI).
The new notification, even considering the possible obstacles to the trade between two countries, has appealed the concerned traders to approach the Indian government for further clarification if they faced any difficulties in this connection.
Officials at the Indian Embassy, who were approached by the Nepali importers, said their finance ministry issued the new notification after Jayant Prasad, ambassador of India for Nepal, himself communicated with New Delhi.
Indian Finance Ministry on Monday issued a fresh notification, clarifying to exporters that they can accept payments in Indian currency as well. It has notified that their supply made against Indian currency will still be regarded as exports, and exporters will not be charged excise duty on such exports.
“It is clarified that exports to Nepal will continue to be permissible irrespective of whether the payments are made in Indian currency or foreign convertible currency as long as they are in accordance with applicable Reserve Bank of India (RBI) guidelines,” reads the new notification that India´s Department of Revenue issued to its customs official.
Contrary to latest preciseness, India in its previous notification issued on January 13 had said that ´abolishment of DRP puts export to Nepal at par with exports to other countries except Bhutan´.
Following such notification, Indian exporters since the scrapping of DRP on March 1, had been demanding Nepali importers to make payments in US dollar and brought imports of excisable goods, which largely includes industrial raw material and vehicles, to a grinding halt for two weeks. Nepal Rastra Bank (NRB) allows payments in dollar for only 250 items.
Later, some Indian exporters started accepting payments in Indian currency but forced Nepali importers to pledge additional 10 percent payments as collateral to make sure the goods reached Nepal. This arrangement compelled the importers to pay more in excise duty at the customs.
Such confusion caused many Aerated drinks manufacturers like Barun Beverages, beer manufacturers and many other companies to incur additional cost. Industries like cement factories were on the verge of closure as they could not import raw materials and fuel were fast running out of stocks.
“We are hopeful the notification will make imports smooth and thankfully it came before we ran out of our stock of raw materials,” said Pashupati Murarka, vice president of federation of Nepal Chamber of Commerce and Industries (FNCCI).
The new notification, even considering the possible obstacles to the trade between two countries, has appealed the concerned traders to approach the Indian government for further clarification if they faced any difficulties in this connection.
Officials at the Indian Embassy, who were approached by the Nepali importers, said their finance ministry issued the new notification after Jayant Prasad, ambassador of India for Nepal, himself communicated with New Delhi.
