January 16: The private sector has complained that the government’s customs policy is making foreign trade difficult. They argued that the concept of customs should have been to facilitate foreign trade instead of impeding it.

The traders said that the various stages of rigorous process of customs clearance and the ill-intention of the customs officials have been causing them lots of problems.

Although the concept is to facilitate trade, the customs process is revenue-oriented in practice, said the traders who rely on Birgunj Customs, the biggest customs in the country.

The Birgunj Chamber of Commerce and Industries argues that they often come across the problem in valuation as the customs officials do not approve the valuation of the goods mentioned in the bill even if the good is imported by a reputed company.

"The customs officials of Nepal should evaluate the goods on the basis of the goods and services tax bill issued by the Indian government and the bill of export issued by the Indian customs”, says Anil Agrawal, president of the goods and services tax bill issued by the Indian government and the bill of export issued by the customs.

Importers complained that the customs officials evaluate goods on the basis of information and charge a 50% penalty on top of that, adding to the problem.

“Customs evaluates goods on the basis of the Customs Reference Valuation Book. If the value of goods mentioned in the bill is less than that mentioned in the reference book, the customs charges fine,” says Hari Gautam, senior vice president of Birgunj Chamber of Commerce and Industries.

“Importers are forced to open LCs worth more than the actual value of goods just to avoid fines. The excess amount is sent through Hundi,” he added.

Agarwal said that the latest example of this is the recent crackdown on the evaluation of lighters by the Department of Customs. Traders complained that the customs offices have arbitrarily changed the harmonized system code of the goods to collect more revenue.

The chamber’s Vice President Madhav Rajpal said that the customs authorities changed the code without giving due recognition to bills like GST, SAFTA. Traders say that some officials make it a means of bargaining with businessmen for under-the-table earnings.

Rajpal said that this policy is impractical as SAFTA concessions are only given to goods imported through LC. Traders also demand that this concession be given to the goods that come through the banking process.

Senior Vice President Gautam said that it is also an unreasonable policy of customs not to allow parts of industrial equipment imported from third countries to be brought from India. He complained that even though the association wrote a letter to the government in this regard, the problem has not been addressed.