August 15: Vehicles are piling up at Birgunj customs due to the strict import policy of government and lack of liquidity. The government chose this measure in order to solve the pressure on the foreign exchange reserves, compelling the banks to stop credit investment for the purchase of luxury vehicles.

Since there is no demand for new vehicles in the market, the importers have not cleared the vehicles from the customs office.

Harihar Paudel, Chief Customs Officer of Birgunj Customs, said that the importers have delayed the release of the vehicles because they do not have the money to pay for the revenue for customs clearance as the banks have refused to open Letter of Credit (LC) for this purpose.

Kamal Gyawali, head of Nepal Intermodal Transport Development Board (NITDB) Birgunj informed that more than 1,700 new vehicles are parked on the premises of the integrated check post (ICP) in Birgunj.

“The ICP has a parking capacity of up to 400 vehicles. After piling up of more than 1,700 vehicles, the management has become chaotic,” he said.

The government has banned the import of vehicles worth more than five million rupees. The import of vehicles has also declined in the last months of the last fiscal year due to the tightening of imports.

Banks have almost stopped lending credit on cars. Importers say that there is no demand in the market due to lack of vehicle loans. It seems that the import of such vehicles from Birgunj, the main port of vehicle import, has decreased since last November.

Data from the customs shows decline in import every month since November of the last fiscal year as compared to the previous fiscal year. From mid-June to mid-July, only 68 jeeps passed customs clearance through Birgunj Customs. In the corresponding period of the previous fiscal year, this number was 487.

The government gradually started tightening the import from the second quarter of the last fiscal year. Since then, the data shows that the import of light vehicles is continuously decreasing. Some importers have even rented land in the border Indian city of Raxaul and kept their vehicles there.

There is a provision to refund the goods and services tax (GST) of the vehicle imported from India only after submitting proof that it has cleared the Indian customs within 3 months. For GST compliance in India, importers now have to import vehicles in a rush. However, importers have not released the vehicles that have arrived at the customs office.