India refunds IRs 760 million to Nepal

Kathmandu, May 2:

As a gesture of extending financial support, the government of India has refunded excise duty under the duty refund process (DRP) worth about IRs 760 million to Nepal, which was pending since last April.

According to Indian embassy sources in Kathmandu, two Punjab National Bank cheques worth IRs 622.4 million and another IRs 138.7 million have been forwarded to Nepal Rastra Bank

(NRB) today.

The first amount of IRs 622.4 million is for April to December 2005, while the other one is for the period leading upto April 2006.

The move came following Indian prime minister Dr Manmohan Singh’s instruction to the ministry of finance, India to put the issue on fast track following the recent political developments in Nepal.

According to news reports, Indian foreign secretary Shyam Saran had met the finance secretary Adharsah Kishor last week to relay the Prime Minister’s instructions and expedite the refund process.

A senior official at NRB, however, said that the cheques have not yet been deposited at the central bank. He said, “If the cheques have been forwarded, they may be deposited by tomorrow.”

Under the duty refund process (DRP), the Nepali customs authorities inform their counterparts in India about the excise duty payments while exporting goods to India. Later, the Indian authorities refund the excise duty to Nepal.

However, India had halted the refund of excise duty since last April, citing payment settlement issues by the Royal Nepal Army’s procurements from India. Nepal had received IRs 240 million under DRP in April 2005.