My Republica, November 14, 2019
Private sector says it will drive up inflation
KATHMANDU: The government has revised customs duty on more than half a dozen goods after the end of first quarter of current FY2019/20.
The cabinet meeting held on November 4 had decided to revise the customs tariff on gold, silver, wine and coffee related products, among others. The government has increased customs duty on gold imported for commercial purpose by Rs 1,500 per 10 grams on top. The government, through the budget speech for the FY2019/20, had increased customs duty on gold to Rs 5,000 per 10 grams. With the fresh revision, customs duty on the yellow metal has reached Rs 6,500 per 10 grams. Similarly, tariff on silver has been increased to Rs 75 per 10 grams, up from Rs 56 per 10 grams.
“Nepali migrant workers bringing in up to 50 grams of gold are also required to pay Rs 7,500 per 10 grams, which was Rs 6,200 per 10 grams before the revision,” according to the notice published in the gazette. If such workers bring 50 grams or more gold, they will have to pay Rs 8,500 per 10 grams as customs duty. Such tariff was Rs 7,200 per 10 grams before the revision.
Similarly, the gazette reads that customs duty of Rs 8,500 per 10 grams will be levied on gold ornaments of up to 50 grams. Earlier, customs tariff on such imports was Rs 7,200 per 10 grams. Likewise, customs duty on import of gold ornaments above 50 grams has been set at Rs 10,000 per 10 grams. Before the revision, such tariff was Rs 9,000 per 10 grams.
The government has also increased excise duty on cosmetic products to 10%. Such duty was 5% before the revision. It has also decided to impose excise duty of 5% and 10% on cleaning materials made of iron and steel, and coffee related products, respectively.
On the other hand, the government has relaxed customs tariff on goods like hatching eggs, acrylic emulsion and excise duty on wine produced in Nepal. The government has reduced by half customs duty on hatching eggs. Similarly, customs duty on import of acrylic emulsion – a raw material for paints – has been reduced to 20%. Before this, the government was levying 30% duty on acrylic emulsion.
Likewise, the government has also lowered excise duty on wines made using locally produced fruits by 30%. However, only wines having up 12% alcohol can enjoy the facility.
Private sector, meanwhile, has expressed dissatisfaction over the revision of customs and excise duty within three months of the implementation of Financial Act 2019, stating that it could affect stability of trade. Issuing a statement on Tuesday, Nepal Chamber of Commerce reminded the government that industries and trading firms do businesses on the basis of their commercial plan prepared as per the Financial Act made public at the beginning of the fiscal year. "Increment in customs duty on gold and other goods will have direct negative impact and contributes to drive up inflation," it added.
Government officials, however, argue that customs and excise duty was revised as per the need mentioned in Sub-section (1) of Section 18, Financial Act, 2019.