Kathmandu, June 5
Department of Customs (DoC) has urged the traders to take the Import Export (IE) code being issued by the department.
While the DoC has made IE code mandatory for traders from next fiscal, only few traders have taken the IE code till date. The department started distributing the IE code from January 26.
Devi Bhandari, director of DoC, said that the department started organising IE code distribution programmes in various economic hubs — like Biratnagar, Birgunj, Butwal, Nepalgunj, among others — to facilitate the traders and make them aware about the newly introduced system.
“Though traders can obtain the IE code from online as well, we have been making them aware and facilitating as the new system will come into force from new fiscal,” said Bhandari.
As per the new provision, firms that import goods above Rs 50,000 at one time must obtain the IE code and are required to have paid-up capital worth Rs one million and bank guarantee of Rs 300,000 to import goods.
Exporting firms that export goods above Rs 500,000 at one time also need to obtain IE code. However, there are no paid-up capital and bank guarantee requirements for exporting firms.
The DoC has introduced this system to better regulate the importing and exporting firms. The system is expected to lessen the number of bogus firms (which are opened in the name of other people instead of the real owner) and non-filers. Most bogus firms are non-filers.
According to Kul Raj Gyawali, spokesperson for DoC, such bogus firms import goods for a few years before vanishing without submitting the income tax or value added tax (VAT).
The new rule is expected to be instrumental in effective implementation of VAT because the bogus firms collect VAT from consumers but do not submit it to the tax offices.
According to officials, it is hard to take action against such firms as they are registered under other people’s name.
“After enforcement of the new rule from next fiscal, it will be tough to register importing firms in the name of other persons because banks do not issue guarantee without checking the credibility of the firms,” Gyawali stated.
Currently around 30 per cent of the trading firms registered in VAT are non filers.
A version of this article appears in print on June 06, 2017 of The Himalayan Times.