June 15: According to the Department of Customs, onions worth Rs 26.10 billion have been imported into Nepal in a period of five years. Nepal has to rely on India for the import of onions due to low production in the country.

There is not a shortage of onions in the market after the government imposed VAT on onions while announcing the budget for the upcoming fiscal year (FY 2023/24).

According to the Department of Customs, 155.71 million kilograms (15,57,14,631 kg) of onions worth Rs 5.79 billion have been imported in 10 months of the current year. In the corresponding period last fiscal year, 145.21 million kgs (14,52,11,974 kgs) of onions worth Rs 5.4 billion were imported.

Businessmen now complain that there is no environment to import onion due to VAT.

Prakash Gajurel, general secretary of Nepal Agricultural Produce Potato, Onion Import Export and Wholesalers Association, says imposition of VAT on onion, potato and other items has deteriorated the environment for businessmen to import such perishable products.

Most of the buyers are not registered with VAT. In such a situation, the government decided to impose VAT without studying and discussing the matter with the stakeholders, says Gajurel, adding, “This has not only affected the businessmen but also the placed the consumers at the receiving end.”

He said that the import of onions has not been possible due to the government’s policy and they are trying to contact the relevant ministries to solve this problem.

Madhav Timalsina, president of the Consumer Rights Research Forum, says that the government, finance ministry and related agencies should reconsider the decision to impose VAT on onions.

Timalsina questioned, "How relevant is it to impose VAT on onions consumed everyday by the lower-class people while the government does not impose VAT on packed food and fish imported from countries like Brazil and Ethiopia especially for the high-class people?”

Stating that Nepal is dependent on India for imports of onion, Timalsina said, “The government should rather focus on how to increase production than imposing VAT when domestic production is not adequate to meet the market demand.”

Price more than triples in 15 days

According to the Kalimati Fruits and Vegetables Market, the wholesale price of onion was Rs 35 per kg 15 days ago. Now, due to the shortage of onions after the imposition of VAT, the market has removed the price of onions from the list.

The traders of Kalimati say that the price has not been fixed because there is no onion in the market. The names of vegetables or fruits which are not available in the market are not in the price list.

In retail shops, the price of onion has now reached Rs 125 per kg. Rajesh Adhikari, a wholesale onion trader in Kalimati, says that onions have not entered the market in the last few days.