High tax hurdle to export of vanaspati ghee
Biratanagar, August 22:
Entrepreneurs are not exporting vegetable ghee since the last four months because of the high ‘service charge’ imposed by India’s State Tradng corporation (STC).
Vegetable ghee entrepreneurs have stopped production even though the government has given them discount for the import of raw materials and on export of prepared ghee. They had been selling to STC for the last five years. India does not tax its entrepreneurs on import of raw materials while tax paid by Nepali ghee entrepreneurs is high. Sriram Oils manager Pradip Murarka said vegetable ghee industries in Nepal have shut down as they are can’t compete with the Indian product.
The government had given 100 per cent discount in the export of vegetable ghee, one per cent on local ghee and 50 per cent discount in VAT from the second week of June. However, ghee entrepreneurs have not availed of the facility. Nepal was taking four per cent export tax and 13 per cent VAT on vegetable ghee while it had been taking 10 per cent tax on the export of local ghee.
Murarka said the production and export of ghee could not be continued though the government provided discount because of STC’s imposition of Rs 1600 Indian Currency (IC) ‘service charge’ for each metric tonne.
He said Nepali ghee has become expensive due to the service charge. There are 16 ghee factories in Nepal and all are closed since the second weekend of April. According to ghee entrepreneurs, the factories had been producing 200 metric tonnes of ghee a day and exporting 1,00,000 metric tonnes of ghee a year as per the quota fixed by the Indian government.
The last fiscal year, the government collected about Rs 52,00,00,000 revenue from the export of ghee.