Duty on betel nuts hiked to curb smuggling

Duty on betel nuts hiked to curb smuggling

Jul 22, 2014-

The government has decided to charge a flat Rs 45 per kg as import duty on betel nuts and scrap the earlier provision of 30 percent customs duty. The policy change under Financial Bill 2014-15 is intended to control rampant smuggling of betel nuts through the eastern border.

Earlier, the government had hiked the import duty from 20 percent to 30 percent in an effort to stop the illegal trade, but it was ineffective. Customs Officer Krishna Neupane said that the government’s move was intended to discourage illegal trade and increase revenue.

Nepal’s betel nut imports far surpass domestic requirements, and most of the shipments are re-exported to India as Nepali products. Records of the customs office show that imports have swelled immensely in the last three years.  

Betel nuts top the chart of imports through the Kakkarbhitta check point. The country imported 3,802 tonnes of betel nuts in 2011-12 which increased to 7,930 tonnes in 2012-13. In the last fiscal year, imports of betel nuts were worth to Rs 2.30 billion.

The taxes collected from the import of betel nuts make up a large portion of the income of the Mechi Customs Office. The office collects Rs 200-300 million annually from betel nuts alone.

Meanwhile, the government has revised the customs valuation of betel nuts to $ 1,250 per tonne from $ 750 per tonne. The government has introduced separate import valuations for betel nuts from Indonesia, Malaysia, Myanmar and Thailand.

As the valuation set for Indonesian products was  the lowest, a large quantity used to be imported from this country. The customs valuation for betel nuts from Indonesia has been set at $ 1,050 per tonne while the valuation for betel nuts from Malaysia and Myanmar has been set at $1,150 per tonne. The valuation for betel nuts imported from Thailand has been set at $1,250 per tonne.

The government allocates annual export quotas based on the output of local betel nuts. In the last fiscal year, the export quota was set at 9,000 tonnes. For the past few years, a few influential traders from Jhapa and Morang have been re-exporting betel nuts imported from third countries to India by tagging them as original Nepali products.  

“The change in the customs duty will affect the market,” said Keshav Kumar Pandey, member of the Federation of Nepalese Chambers of Commerce and Industry. He added that all the taxes combined including VAT would make betel nuts dearer by Rs 64 per kg, and that it would be difficult to re-export them at such a high rate.

Published: 23-07-2014 09:13

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