Print Edition - 2016-05-31 | MONEY
Mandatory to present a tripartite agreement now
According to the bill, only the authorised importer of the automobile in the country would be eligible to import the vehicle
May 31, 2016-Vehicle importers now have to present a tripartite agreement on vehicles imported from third countries other than India if imported via a third party. The government, enforcing the provision through the budget for 2015-16, has targeted to minimise cases of under-invoicing by several vehicle importers.
According to the government’s financial bill, only the authorised importer of the automobile in the country would be eligible to import the vehicle. In addition, the importers would have to present papers related to the agreement with the automobile manufacturer and its distributor abroad if importers are bringing in the vehicle through a third party. However, it is not applied in cases where the domestic authorised distributor is importing the vehicle directly from the manufacturing company. At present, importers have to pay up to 223 percent of the cost price including customs duty, VAT and other taxes on vehicle imports. Many importers have been in practice of producing fake import bills using the third party just to escape the hefty amount which they otherwise have to pay during customs clearance.Shree Krishna Nepal, deputy director general at Customs Department, said the provision would help them to implement customs clearance based on the actual price. “It will make the revenue collection system from vehicle import more credible as per the Customs Act,” he said.
Import of vehicles and it parts accounts for the largest source of revenue for Nepal’s customs offices almost every year. According to the Department of Customs (DoC), customs offices earned Rs43.61 billion in import duty and taxes in 2014-15 from autos and auto parts. The figure represents 25 percent of the total revenue collection by the customs offices.
The private sector hailed the government’s decision on enforcing the provision on vehicles import. Shekhar Golchha, president of Nepal Automobile Dealers’ Association, said the government’s step could control the malpractice of importing vehicles through making invoices of low prices. “Many importers involved in this practice have been transacting with third parties just to import the vehicles to escape from paying off customs duty,” he said. “It will also help promote fair trade in the area.”
According to Trade and Export Promotion Center, Nepal imported vehicles and accessories worth Rs49.51 billion last year. In the first nine months of this fiscal, imports have reached Rs39.25 billion.
Published: 31-05-2016 08:52