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09 Mar, 2022

Custom Duty Amendment Fiscal Year 2078-79

Custom duty refers to the tax imposed on goods when they are transported across international borders. Nepal has incorporated the sixth version of the Harmonised Commodity Description and Coding System since May 2017, as approved by the World Customs Organisation. Custom duties are generally assessed on the cost, insurance, and freight(CIF) value. The major highlights on changes and revision in custom rate and other provisions relating to export and import of goods for the Fiscal Year 2021/22 are discussed in this document. 

Major Changes/ Revision in Custom Duty as per the Finance Ordinance 2078/79 

-The rate of Customs Duty on import prevailing as per Schedule-1 of Finance Ordinance 2078 shall be applicable with immediate effect (Jestha 15,2078)

-Industries can export their goods through a letter of credit or banking channel in convertible foreign currency. However, in case of not having a Bonded House Facility, they can import their raw materials, auxiliary raw materials & packing materials (if packing material is not manufactured in Nepal) under Custom Deposit Facility.

-As per Custom Rules 66 (D), EXIM Code can now be renewed for 5 years at once.

-Custom Service Charge on import and export of goods is NPR 500 and NPR 100 respectively. 

-On import of goods, while filing the declaration form, the details related to brand, model, size, shape, unit, manufacturer and other attributes of the goods need to be declared.

-Section 34 of the Customs Act related to post-clearance audit has been fully revised.

-Under Section 89E, the National Single Window System for the management of International Trade has been proposed. For the time being, the system shall be operated by the Department of Customs.

-The tariff has been decreased for items like refrigerators, washing machines, electric smoothing iron, microwave oven, induction cooker, electric car, jeep, vans and various other electronics. 

-There has been an increment in the tariff of Chocolate and other food preparation containing Cocoa. 

Exceptions- to applicability of Customs Duty:

The custom duty will be exempt in the  following cases : 

-Having been exported through parcel by post but could not be delivered to the concerned person and thus returned back. 

-Having been returned back because the concerned person has refused to take delivery after clearance made by the customs office or after having arrived abroad. 

-Having been returned back because of being unable to meet standard quality due to an accident or natural calamity.

Penalties for not paying custom rate: 

-In the case of the name, specifications, character, physical description, qualitative description, size, weight and qualities are found different by custom officer, 300% penalty in addition to applicable custom duty or confiscation of goods along with 200% penalty in addition to the applicable custom duty shall be levied. 

-Undeclared imported goods shall attract a fine of 5% of custom duty. However, The fine may be waived off if such goods are undeclared due to unavoidable reason.

** To be continued at Custom Duty Amendment under Downloads.