Nepal Budget 2083/84: Impact of Changes in Customs Duty on Foreign Travel and Trade
Image source, Phanindra Dahal/BBC
Sonali Kayastha, a resident of Birgunj, is unhappy with the increased customs enforcement when bringing household goods from India via land routes.
Though the exemption limit for goods was raised from NPR 100 to NPR 500, she believes this remains insufficient.
Shortly after the formation of the new government last Chaitra, stricter customs rules for goods transported from India were implemented, sparking widespread reactions on both sides of the border.
However, these stricter rules were not actually new.
According to customs officials, goods valued above NPR 100 have been subject to customs duty since 2060 BS.
Following strong public response to enforcement, the government has now raised this exemption limit to NPR 500 through the current budget.
Additionally, the budget revised customs duties on gold and related items.
Waves Caused by Stricter Enforcement on Land Routes
A recent government gazette notification outlined exemptions and regulations concerning customs duties for Nepalese travelers returning from abroad via air and land.
According to the notice, individuals crossing the border on land may be exempted from customs duties on personal items valued up to NPR 500 at the discretion of the customs officer.
Kishor Bartola, a spokesperson for the customs department, confirms these rules were already in effect previously.
“According to government policy, goods brought for personal use within a defined value limit are exempt from customs duty. The previous limit was in place since 2060 BS and has now been raised,” Bartola explained.
Local traders welcome this rule, but community members remain dissatisfied.
Birgunj resident Sonali Kayastha argues that NPR 500 is too low and suggests increasing it to at least NPR 5,000 for easier household shopping.
Image source, Phanindra Dahal/BBC
“We shop across the border because prices there are lower,” she said.
She experiences lower prices for kitchen essentials like sugar, oil, and garlic on the other side of the border.
She typically brings goods worth NPR 10,000 to 15,000 monthly but notes that customs enforcement has become very strict.
Conversely, local traders appreciate the stricter customs policies.
“We have not seen excessive enforcement for household items, but regulations are necessary to control those who intend to smuggle goods,” said Shivjee Prasad Sah Kalwar, General Secretary of the Birgunj Chamber of Commerce and Industry.
“Such rules promote Nepalese markets, which are not inherently expensive, but people perceive foreign goods as cheaper,” he added.
What Are the New Customs Duties on Gold for Nepali Travelers?
Image source, RSS
The budget doubles the customs duty on gold to 20 percent.
However, the permissible quantity of gold remains governed by the previous regulations.
According to the Customs Duty Act 2081, raw gold up to 50 grams is subject to 20 percent duty, with an additional 3 percent on the next 50 grams.
For jewelry, men can bring up to 25 grams and women up to 50 grams duty-free. An additional 3 percent applies on the subsequent 50 grams of gold jewelry.
However, items like bangles, finger rings, and pendants made only to the size of jewelry are not recognized as jewelry in the law and are thus treated differently.
The gazette notification further explains that returning Nepali travelers may bring one each of tablets, desktop computers, watches, cameras, video cameras, and mobile phones duty-free. Moreover, those who have worked abroad with a labor permit for at least six consecutive months may bring an additional new mobile phone exempt from customs duties.
What Is the Customs Revenue Target?
The budget size for this fiscal year is NPR 21.24 trillion.
Finance Minister Dr. Swarnim Wagle described the government’s ambitious target of mobilizing NPR 15.8 trillion in total revenue.
Of this, the government aims to raise NPR 6.28 trillion from customs duties.
In the previous budget, the customs target was NPR 5.88 trillion, and by the third week of Jestha, about 76% of that had already been collected, according to customs officials.
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