The ministry had exempted customs duty and VAT on eight excavators imported by Kalika Construction Pvt Ltd, owned by CA member Bikram Pandey. The committee has written to the Finance Ministry, seeking clarification on why and who made the decision to allow a private firm to import construction equipment without paying customs duty.

During a PAC meeting on Wednesday, lawmakers had questioned the government decision of waiving customs duty to a private firm. PAC Chairman Janardan Sharma said his office had sought further information on the matter as many things remain unclear. “We have asked the Finance Ministry to clarify if the excavators were imported by Kalika Construction in the name of government or for itself,” said Sharma. The PAC has also asked the ministry to clarify the price and tax waived on the equipment.

According to the Department of Customs, the customs duty and VAT on the excavators was waived though such equipment were not among the items that qualify for tax exemption. The government had announced tax waiver on 219 emergency items for a limited period after the earthquake.

Sources said the Home Ministry decided to waive customs duty and VAT on those equipment, citing their use for the post-quake reconstruction and rehabilitation works.  

Officials at the Customs Department said the excavators were exempted from import duty and VAT as per the direction of the Finance Ministry. “Similar exemptions were provided to dozens of other equipment imported by various government agencies, but Kalika Construction was the only private firm to be extended that facility,” said Surya Sedhai, spokesperson for the department.

Home Ministry officials admitted to have requested the Finance Ministry for tax waiver on 24 excavators, but said that the duty was waived through a direct decision of Nepal Army. “It was Nepal Army’s decision to exempt import duty on the excavators, not ours. Kalika Construction has reportedly lended the equipment to Nepal Army for a few months,” said Home Ministry spokesperson Laxmi Prasad Dhakal. After the earthquake, Kalika Construction had provided eight heavy equipment to the government for three months to demolish unsafe structures and remove debris. The equipment were handed to Nepal Army in the presence of Finance Minister Ram Sharan Mahat at the Army Headquarters. Kalika Construction President Pandey did not return requests for a comment.

NA spokesperson Brigadier General Jagadish Chandra Pokhrel said the Army had borrowed some equipment from the company but said he had no knowledge about such imports. “It’s true that

Kalika Construction has provided us some heavy equipment for three month, but I can’t tell anything about the import without confirmation,” said Pokhrel.