November 13: Stakeholders have complained that the domestic industries of Nepal have been affected due to the customs exemption given to big projects with foreign investment for the import of construction materials.

The industrialists have urged the government to bar big projects from importing construction materials that can be produced within the country. This move, according to the industrialists, will help sustain the domestic industries that produce rods, cement, pipes, and zinc sheets, at a time when they are reeling under crisis due to the impact of Covid-19 pandemic and the current economic crisis.

The government allows the import of building materials with customs exemption for development and construction projects. The industrialists complained that this has affected the domestic producers.

They said that materials such as cement, rods, pipes and galvanized sheet are used extensively for projects related to hydropower, bridges, roads, and canals, but most of such construction materials are imported from outside. This is a big setback for the domestic market of Nepal.

Stakeholders argue that there is no need to bring such materials from outside when the domestic industry has become self-sufficient in rods and cement.

“The products of the domestic industries should be used in big projects," insists Rajesh Kyal, owner of Narayani Ispat. 

Kyal claimed that this measure might provide some relief to the market, which has been affected by the uncomfortable situation after the pandemic. The government allows such projects to import materials with exemption on customs duty and value-added tax.

According to Dhan Bahadur Baruwal, Chief Customs Officer of Birgunj Customs, the customs exemption is given upon the recommendation of the Ministry of Finance.

Normally, up to 40 per cent customs duty is fixed for the import of such materials, but the big projects pay customs duty of 1 to 2 per at subsidized rate. Such imports do not need value added tax.

Santosh Kumar Neupane, Information Officer of Birgunj Dry Port Customs, informed that 4 to 5 containers of such goods are imported through customs every month. The Ministry of Finance has been giving concessions on the import of construction materials according to the nature of the project.

Businessmen say that domestic industries have been affected as the big projects are allowed to import products such as zinc and galvanized sheet, etc., which are produced in abundance in the country. The industrialists argue that such projects should be supplied with construction materials from the domestic industries.