Nepal | September 17, 2019

Customs dept ramps up effort to discourage under invoicing

Himalayan News Service

DoC instructs its offices to utilise authority to buy consignments suspected to be undervalued and auction the same afterwards

Kathmandu, August 11

The Department of Customs (DoC) has stepped up its efforts in discouraging traders from under invoicing of goods during imports. For this, DoC has instructed all the customs offices to purchase the cargoes at the customs point if the customs officer suspects the goods have been under invoiced and utilise the authority extended by law.

According to the law, DoC can purchase and auction off the cargo consignments if the customs officer suspects goods have been under invoiced while being imported into the country.

Apart from the DoC losing customs tariff due to rampant under invoicing of goods, the ill-practice has also been hurting value added tax (VAT) and income tax collection and creating non-uniformity in market prices, according to Sishir Kumar Dhungana, director general of DoC.

Under invoicing of goods has also been identified as one of the main obstacles in effective implementation of VAT.

“There is a huge compliance gap among trading firms as they do not issue VAT bills because under invoicing of the goods can be cross-checked based on the bills issued to the end consumers.”

The customs department has been regularly revising the Customs Valuation Directive based on the market prices collected from various parts of the country. Based on the reference price of the goods, the customs offices carry out customs valuation.

DoC expects incidences of under invoicing will be minimised through the measure adopted by the department.

“While DoC has used the measure earlier as well, the tool was used only on rare occasions,” Dhungana said.

DoC has recently purchased goods imported by a business firm Bentley suspecting it had been undervalued. DoC purchased a consignment from Bentley at Rs 1.2 million based on the value disclosed by the business firm at the customs point. Later, DoC auctioned the cargo at Rs 4.8 million.

“We believe freely implementing the tool will discourage traders from under invoicing goods while importing the goods,” said Dhungana.

DoC also aims to digitise the customs offices in the near future. The department recently introduced the latest version of Automated System for Customs Data (ASYCUDA) software in some of the customs offices. The fully web-based system for customs data is expected to provide necessary impetus to customs administration reform and modernisation process, which began in 2003. Dhungana informed that the ASYCUDA world system will be introduced very soon in the sole rail linked inland clearance depot (ICD) Birgunj.

ASYCUDAWorld is web-based software, which will link various government and private agencies dealing with customs offices. These agencies include transport department, Inland Revenue Department, finance ministry and private customs agents, to name a few.

Through this system various customs agents can process customs declaration forms, submit transit documents and access details on transport document numbers, consignors and consignees, number and kind of packages, quantities of goods, among others, via the internet.


A version of this article appears in print on August 12, 2016 of The Himalayan Times.


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