Frequently Asked Questions (FAQs)

General Information about Customs

What is “Customs”?

As per the Kyoto Convention the government service, administrating customs laws and collecting customs duty, tax and other duties and fees is Customs.

How many customs offices are there in Nepal?

There are 30 customs offices within Nepal.

Where they are?

In land route there are 9 in Northern borders, 20 in border with India and one in air route i.e. T.I. Airport Customs Office in Kathmandu.

Which are the customs offices in border with India?

They are:
• Pashupati Nagar Customs Office
• Mechi Customs Office
• Biratnagar Customs Office
• Sunsari Customs Office
• Rajbiraj Customs Office
• Siraha Customs Office
• Janakpur Customs Office
• Jaleshwor Customs Office
• Sarlahi Customs Office
• Gaur Customs Office
• Birgunj Customs Office
• Dry Port Customs Office
• Bhairahawa Customs Office
• Krishnanagar Customs Office
• Koilabas Customs Office
• Nepalgunj Customs Office
• Rajapur Customs Office
• Kailali Customs Office
• Kanchanpur Customs Office
• Mahakali Customs Office

Which are the customs offices in Northern Border?

These are:
• Tatopani Customs Office
• Olanchungola Customs Office
• Kimathanka Customs Office
• Lamabagar Customs Office
• Rasuwa Customs Office
• Larke Customs Office
• Mustang Customs Office
• Mugu Customs Office
• Yarinaka Customs Office

Which are the sub-customs offices authorized to trade with India?

• Bhadrapur
• Thadi
• Viswa
• Mahespur
• Suthauli
• Prithivipur
• Sati
• Gularia
• Darchula

What are the goods to be exported/ imported through the sub-customs offices? Are there limit of value or quantity?

The sub-customs offices except Bhadrapur, Thadi, Viswa, Mahespur, Suthouli, Prithivipur, Sati, Gularia and Darchula are authorized to export or import as follows:
• On the import, the goods worth up to NRS Five Thousand.
• On the export, unprocessed agricultural products and natural local Nepalese products. These export and import can be done with bordering countries only.

Which is the customs office engaged in air route trade?

That is Tribhuvan International Airport Customs Office.

What are the main functions of the customs offices?

• To collect the specified revenue after clearing the goods to be exported and imported.
• To control smuggling of import/export of goods.
• To create conducive environment for facilitating legal trade.
• To control export/import of banned/prohibited goods.
• To enforce Customs Act and Rules strictly.

What is meant by Customs officer?

Customs officer means Chief Customs Administrator, Chief Customs Officer, Chief Customs Auditor, Customs Officer, Customs Auditor and Chief of Customs offices including Chief of sub-Customs offices and the designated officer by the Ministry of Finance pursuant to the section 84 of Customs Act 2064 (2007).

How the staffs are appointed in Customs Administration?

The staffs are appointed as per the process of civil service appointment rules of Nepal. The vacant posts are fulfilled on the recommendation of Public Service Commission. The non technical post from non gazetted 2nd class to gazetted 2nd class is on Revenue Group of Nepal Administrative Service. The transfer and promotion under Revenue Group are done within Revenue Group and the transfer of staff outside this group is made from the concerned Services and Group of Nepal Civil Service Act.

Which one is the apex body to inspect, control and direct the customs offices?

The apex body is the Department of Customs. It is in Tripureswor of Kathmandu. It is one of the Department of Ministry of Finance. The Department is headed by the Direct General.


Informer of Smuggling of Goods and Rewards

How much reward is given to the informer of export/ import smuggling?

The following is the percentage of rewards:-

  • Informer of export and import smuggling 10% 
  • If such goods are captured and presented with the person before customs in such case 20%
  • If only goods are captured and presented only 10% 
  • If such goods are gold silver or jewelry maximum of 10% or 5 lakh , whichever is lower but not more than 50 thousand per individual .

What is the provision of secrecy of informer of export/ import smuggling?

There is the provision of keeping secret the name, surname and detail of an informer except when so asked by body carrying out investigation under law in the course of investigation or by court.

Should such informer be presented at investigation authority or court in the course of investigation?

The informer is not compelled to be presented in the court or investigation authority on only the cause of providing information.

Can the informer get rewards or not, if the goods seized are given to use to the government offices or other institutes?

There is the provision of providing rewards.

 

How the amount of reward to informants has been provisioned, if the goods are provided to government offices or other institutions?

The office or the government entity make available such amount to the customs office and customs office provides rewards amount to informer and arrester.

What types of papers are required to get reward by informer or the person who captured the goods and person?

For employee the copy of identity card and for others the copy of document which identity him/her and receipt are compulsorily to be kept while providing the rewards.

How the amount of reward is given, if there is more than one informer?

In such cases the amount of reward is distributed equally.

What is auction value?

It is the value determined by specified committee. In such value VAT are not included till auction.

How can the informer give information?

Informer can give information in ways-

  • Written
  • Verbal

What is the process of giving information by informer?

The process are:- 

  • Such information or report should be submitted before seizure of goods.
  • Such information or report should be given to the Director General or the concerned Customs Officer.

What is the process, if two or more information or reports are received for single action of smuggling?

The information or report received at first gets validity. Other information or reports are kept with remarks.

Can the informer give nick or fake name instead of his own name?

Yes it can be. But such informer immediately submit the duplicate copy of identification (certificate of citizen, identity card, passport, driving license) with nick name to the concerning authority.

What action is taken, if any one attempts to export or import goods through any route other than prescribed route?

The following action is taken:- 

  • The Customs Officer or the Authorized Officials or competent Government Officials can forbade such person to do so.
  • On manhandled or uses of force by such person, the staff should request and convince such person not to do so.
  • In case of manhandles and uses of forces by such person continues despite on the request of the customs officials; he/she would get arrestment.
  • On effort to arrest if such person uses force or tries to escape or go away and could not  arrested at sight, the security person deputed there with the order of the employee can  fire in air at first and then open fire aiming to cause minimum loss in the situation of out of  normal control.

What action is taken to the person who makes movement by a motor vehicle and does not stops on customs officials request and tries to move?

If such vehicle tries to escape without examination or escapes, with the order of the Customs Officer the security person can fire on the tires of such vehicle aiming to cause minimum loss.

What details are to be included in informer report?

The following details are to be included:-

 

A) In case of airline

  • Flight no and time
  • The name and figure of smuggler and mode of hiding the goods
  • The place of hiding inside airplane.

 

B) In case of cargo

  • The  air way bill No. of cargo or name of goods , name of owner
  • The mode of hiding the goods
  • The place where the goods are kept.

 

C) In case of land route

  • The type and number of means of transport  
  • Name of goods
  • If hidden within any goods, the identification of such goods
  • The date, time and place of smuggling.

What is the provision of rewards to the informer who informs the events of export smuggling/import smuggling?

There is the provision of rewards. Out of the proceeds of auction sale of such smuggling goods, reward is provided after the finalization of such case. 


Meaning of Words used in Customs

What is declaration form (Pragyapan Patra)?

It is a form in which exporter or importer declares the description of goods to be exported or imported.

How it is submitted?

It can be submitted through electronic media in the customs offices which has already system of ASYCUDA and in other customs offices it should be submitted l with physical presence.

What is Invoice?

It is a document issued by the seller to the buyer mentioning all the description of goods and value of the goods sold to the buyer. It contains the conditions and mode of payment as well.

What is letter of credit (L/C)?

It is a document of mode of payment through banking system to the goods to be imported or exported. It is a document in which the bank plays a role of mediator between exporter and importer in the process of payment of traded goods

What is CTD?

It is a Customs Transit Declaration Form in Short. As per the Bilateral Transit Agreement between Nepal and India this form is to be filled by the importer or exporter of Nepal for the goods to be imported or exported to the third countries via land route of India for the purpose of not deflecting the goods in India. In case of export from Nepal and in case of Import to Nepal this form is issued for export by the concerned customs office of Nepal and for import it is issued from Kolkatta or Haldia or Fulbari port of India.

What is packing list?

It is a document which gives details about the quantities, weight or numbers of goods in each packing and style of packing. This document is issued by the exporter and is required for import or export.

What is B/L?

The full meaning of B/L is Bill of Lading. It is issued by the shipping company while the export/import is done through sea route.

What contains in B/L?

It contains name and address of exporter/importer, name of goods, quantity, container No., seal No., loading place and date, freight and name of last sea port. It is necessary f or sea route transportation.

What is Airway Bill?

It is a document issued by the airlines while goods are transported via air route. It contains name and address of exporter/importer, description of goods, loading place and date, freight and name of last airport.

What is certificate of origin?

The certificate of origin is a document issued by the competent authority of the country certifying that the goods are produced or manufactured in the same country.

Who issues the certificate of origin?

It is issued by the institution designated by the government. Generally it is issued by the Chamber of Commerce of the concerned country but in case of Nepal it is issued by the Federation of Nepal Chamber of Commerce & Industry and the Confederation of Nepalese Industry as well.

What is GSP?

The full meaning of GSP is Generalized System of Preference. Under this system developed countries grants full or partial rebate on duties for the goods to be imported from developing countries.

What is the purpose of GSP?

The purpose is to increase the export of goods of underdeveloped and developing countries to support the economic and industrial development of these countries. This system was introduced on the initiation of United Nations Conference on Trade and Development (UNCTAD) in 1971 and is continuing still.

How the GSP is issued?

It is a prescribed form and all the descriptions mentioned in the form are to be filled. In Nepal this form is issued by the Trade and Export Promotion Centre and at the time of export of the goods, the customs officer should have to certify the form.

How many countries are providing GSP to Nepal?

1) Belgium
2) Germany
3) Netherland
4) France
5) Luxemburg
6) Portugal
7) Spain
8) Greece
9) Italy
10) Denmark
11) United Kingdom
12) Ireland
13) Austria
14) Finland
15) Norway
16) Sweden
17) Switzerland
18) Bulgaria
19) Hungary
20) Poland
21) Slovak
22) Russia
23) Japan
24) Australia
25) Newzeland
26) Canada
27) United States of America
28) South Korea

What is Bi. Bi. Ni. Form 4?

It is foreign exchange control form 4. The letter of credit (L/C) opening bank sends the foreign exchange to the exporter on behalf of importer of Nepal after the shipment of goods. The bi. bi .ni. form 4 prescribed by the Nepal Rastra Bank is to be submitted to the customs offices duly filled by the concerned commercial bank confirming that the payment of the foreign exchange as mentioned in the L/C is made. The customs offices certify this form after the clearance of goods. The main purpose of this form is to control the deflection of foreign exchange. This form is compulsory to submit in the customs office at the time of clearance of goods imported under mode of L/C payment.

What is conformity of production (COP)?

It is also known as assembling time inspection system. The main purpose of COP is to enable the regulating government officer to identify vehicle product not fulfilling the set standards/norms before exit the factory. It aims to correct the problems with curative measures and to discourage the production of vehicles which do not meet the set standard or norms.

What is Type of Approval (TA)?

After receiving application from the producer of vehicles for the type approval, the concerned inspection authority inspect the structure of engine, vapor dispose system, mechanism of pollution control and other aspect of the vehicle and then provide TA if prior set conditions are fulfilled in the course of inspection. In Nepal for the import of new vehicle COP and TA is compulsory. The aim of this is to control environment pollution to be created by vehicles.

What is Nepal Vehicle Mass Emission Standard, 2069 (2012) ?

Maximum carbon monoxide, hydrocarbon, nitrogen-oxide etc. which adversely effect the environment are fixed by the concerned authority of Nepal for the vehicles, for both passenger and cargo, except tractor, power tiller, dozer, dumper, crane, loader, skyvator and firefighting vehicle. It is called the Nepal Vehicle Mass Emission Standard, 2069(2012) and the new vehicle to be imported in Nepal must be of this standard. Therefore, the certificate of COP and TA must be submitted at the time of importation.

What is meant by Buy Back Agreement?

This is an agreement between exporter and importer under which the importer of a country provides the raw materials free of cost for the manufacturing of the goods to the exporter of other country and the exporter receives only manufacturing cost and profit after manufacturing the goods and the importer himself import such manufactured goods according to agreement. This type of agreement is called buy back agreement.

Which industry practices this type of agreement in Nepal?

This type of agreement is done by Nepalese readymade garment industry. Under this agreement Nepalese readymade garment industry can import required raw materials for manufacturing readymade garment without payments but for this license from the Department of Commerce and Supply Management (DoCSM) is necessary.

What is CMTP?

The full form of CMPT is Cutting, Manufacturing, Trimming and Profit. Under this importer provides raw materials to the readymade garment industry under buy back agreement and pays for CMTP. Under this agreement the industry needs not to invest capital for raw materials and this helps to develop readymade garment industry and increase the exportation of readymade garment

What are the procedures and conditions to be fulfilled for import of raw materials and export of readymade garment under buy back agreement?

Raw materials are received free of cost. Hence, L/C is not necessary but requires the license from the DoCSM and value addition fixed by DoCSM. After receiving payment of value addition in form L/C or advance payment, the readymade garment can be exported. For this system, Nepalese importer can import raw materials on bank guarantee under bonded warehouse facility and after exportation of readymade garment the bank guarantee is released.

For the purpose of customs valuation what is the meaning of following terminologies?
a)FOB
b) CIF
c) CIP
d) C and F

a) FOB denotes Free on Broad which indicates the cost of goods to be exported is up to the border of the exporting country. It does not include transportation and insurance cost to be incurred after border. Generally this terminology is used in exportation.
b) CIF denotes Cost, Insurance and Freight which includes cost of goods, freight and insurance. This terminology is generally used in importation.
c) CIP denotes Carriage and Insurance paid. It also includes cost of goods, freight and insurance and used in importation.
d) C and F denote the Cost and Freight which includes the cost of goods and freight but does not includes the insurance premium. This terminology is also used in importation.

What is brief or summary declaration form? For what kind of goods this form is used?

It is a form to be filled and submitted to the customs office by a person who import his personal used goods or by a passenger who import the personal goods as per the baggage rules .Personal goods worth up to Rs.5000 or the goods allowed to import at the flat rate of duty according to the baggage rules can be imported through this brief declaration form.


Provisions regarding the Imports from Third Countries (Other than India and Tibet the Autonomous Region of China)

What is import?

Import is to bring goods from other countries to own country.

What is the preliminary process for this?

First of all firm/ company/ industry should be registered in the specified institution for the importation of the goods for commercial or other purpose.

What are the formalities to be completed to import goods in Nepal from third countries?

The formalities to be completed are:
• For the purpose of commercial import private/ partnership firms are to be registered in the DoCSM, companies in the Office of the Company Registrar and industries in the Department of Industry.
• Agency for cargo should be registered as agent in the DoCSM.
• Should have certificate of registration in the Value Added Tax (VAT)
• Should have contract paper with exporter or pro-forma invoice of the description, quality and value of goods.
• Request letter with contract paper or pro-forma invoice to the bank to open L/C.
• Bank then open the L/C accepting some cash or on guarantee according to its rules and regulations to make payment through bank to the buyer in the foreign country.
• After receiving the L/C, the exporter of foreign country ships the goods and shipping documents. After receiving the shipping documents by the bank of importing country, collects full amount of L/C from the importer to makes payments to the exporter.
• The L/C opening bank sends all sealed certified documents including Bi. Bi. Ni form 4 to the customs point where the import would take place.
• The procedure of customs clearing starts after the submission/ registration/ transmission of the declaration form, attaching all above mentioned documents to the customs office.
• The goods can be removed from customs office after paying all chargeable duty, tax as per rules and regulations.
• The clearing of goods can do only by the owner of the goods or an agent authorized by the owner of the goods as per provision of law.

at are the documents to be presented in the customs point for the importation of commercial goods from third country?

The documents are:
• Declaration Form
• Invoice
• Packing List
• Bills of Lading or Airway Bill
• CTD for the land route
• Banking transaction document (L/C /T.T/ Draft)
• Document of Insurance
• Country of Origin
• Firm or company registration certificate
• Industry registration certificate for industry
• VAT registration certificate
• Papers relating to customs agent appointment, if appointed
• Delivery Order (DO) of concerning airlines in air route transportation
• Type Approval (TA) and Conformity of Production (COP) in case of vehicle
• Load/ Unload certificate of recognized surveyor in case of chemical fertilizer
• Analysis report in case of chemical
• License for those goods which required license for importation
• Recommendation letter for those goods which can be imported only on the recommendation of certain institution.
• Letter of full or partial exemption in case of government decision on such exemption.
• Document of bank guarantee issued by the bank or finance company which is authorized by Nepal Rastra Bank to uses such guarantee, on the importation of goods under bank guarantee provision.
• Certificate of Bonded Warehouse in case of importation of goods under bonded warehouse provision.

Which customs offices are allowed to deal with exportation to/ importation form third countries?

• Mechi
• Biratnagar
• Dry port
• Birgunj
• Bhairahawa
• Nepalgunj
• Kailali
• Tatopani
• Tribhuvan International Airport

Is there any special provision to import gold and silver?

• Gold can be imported up to 15 kg per day by the commercial bank only. Other are not allowed to import
• Silver can be imported under normal procedure, the commercial firms can also imports silver.

How much is the customs duty for Gold? What is about VAT?

On the importation of gold, the customs duty is Four thousand two hundred rupees for each 10 grams. VAT is not charged.

How much is the customs duty for silver? What is about VAT?

On the importation of silver, the customs duty is Five thousand six hundred rupee for each one kilo. VAT is not changed.

Is there any special procedure to import diamond?

There are no any specified special procedures to imports diamond. Hence, it can be imported as normal procedure.

How much is the customs duty on diamond? VAT is changed or not?

Only one percent of the value is charged as customs duty on diamond importation and VAT is not charged.

How much is the customs duty on other valuable stones except diamond importation? VAT is changed or not?

Only one percent of value is charged as customs duty on the importation of other valuable stones as well and VAT is not charged.

What is the procedure to import personal vehicle used while working in the Nepalese diplomatic mission abroad?

The Nepalese citizen returning after completing tenure who has worked in the Nepalese diplomatic mission abroad is allowed to import personally used vehicle on the permission of the Ministry of Environment, Science and Technology. The other Nepalese citizen is not allowed to import the personally used vehicle in Nepal.

What are the provisions relating to import vehicle in Nepal from abroad?

The following conditions should be fulfilled:
• It should be brand new
• It should be in accordance with the Nepal Vehicle Mass Emission Standard, 2069(2012)
• The authorized seller in Nepal of the vehicle exporting company only can import the vehicle in Nepal.

Can the employee of foreign diplomatic mission located in Nepal bring the personally used vehicle in Nepal?

On the recommendation of Ministry of Foreign Affairs in a condition that it should returned back letter on .

Can used goods be allowed to import in Nepal from abroad?

The used goods are not allowed to import except mill machinery not exactly 10 years of manufacture date by the industry for its own use and machinery, equipment by ongoing foreign aided project for the operation of project.

Which valuation method applies for the used goods?

The transaction value method can not be applied for used goods. The customs officer applies the reasonable method to value the used goods.


Provisions Regarding the Imports from India

What are the procedures to import goods from India?

Through
• L/C
• T.T
• Draft
• Local Purchase (Local Import

What are the documents to be submitted in the customs while goods are to be imported from India against the payment of convertible foreign exchange?

The documents are:
• Declaration Form
• LC/ T.T/ Draft
• ARE 1 Form
• Document of Insurance
• Packing List
• Bill of Export
• Certificate of VAT Registration
• Certificate of Registration of firm or company
• Certificate of Industry Registration is case of Industry
• In case of requirement of permission of certain institution for importation of particular goods, such permission of the concerned institution
• TA and COP documents for the importation of vehicle
• Bi. Bi. Ni. Form 4
• Appointment letter of customs agent in case of appointed agent

What are the necessary documents on local import from India?

The documents are:
• Declaration Form
• L/C in case of L/C opened in India currency
• Invoice
• Insurance Document
• Packing List<> br• Transportation Document
• In case of L/C in Indian currency, Bi. Bi. Ni Form 4 (kha) issued by bank
• Certificate of Registration of Firm or Company
• Certificate of Registration of Industry in case of Industry
• Certificate of VAT Registration
• In case of requirement of permission of certain institution for importation of particular goods, such permission of the concerned institution
• Appointment letter of customs Agent in case of appointed Agent

Can imported goods in India, produced in other country, be again re-imported in Nepal?

Not at all. The goods produced or constructed in India only can be imported in Nepal.

Can the goods imported from India to Nepal be exported in other country?

Yes, can be exported. Trade Treaty between Nepal and India allows it.

Can the goods imported in Nepal from third country be exported to India?

It cannot. The goods produced or constructed in Nepal can only be exported in India.


Provisions Regarding the Imports from Tibet the Autonomous Region of China.

What is the mode of payment regarding import of goods from Tibet the autonomous region of China?

The modes of payment are:

• L/C

• Draft or convertible foreign currency payment as specified by Nepal Rastra Bank

• Traditional Barter System

• Nepalese resident within 30 km distance of the border are allowed to import the goods up to the amount of NRs.16000 without payments through banking system

Which goods can be imported through barter system?

The goods are:

• Raw Wool

• Live Goat and Sheep

• Salt

• Yak and Yak Tails

• Carpet

• Herbs

What are the documents to be submitted in the customs while imports are under barter system?

The documents are:

• Declaration Form for Import

• Declaration Form of already Exported Goods

• Invoice • Document of Insurance

• Packing List

• Transportation Document

• Certificate of Registration of Firm or Company

• Certificate of Registration of Industry in case of Industry

• Certificate of VAT Registration

• Appointment Letter of Agent in case of appointed Agent

How much the maximum value of Drat or T.T can be used for the import at one time?

The goods worth up to U.S $30000 can be imported at one time through Draft or T.T.

Is any permission required for the import though Draft or T.T?

There is no need of any permission of any institution while importing through Draft or T.T from Tibet but in case of import of third country goods via India through Draft or T.T permission of DoCSM is required.


Other Provisions Regarding Imports

Is there any alternative arrangement of inspection of imported goods in case of problem to do so in the customs offices?

Yes, there is. For this first of all the importer should have to submit declaration form and an application with reason in the customs office. In case of valid reason the customs office can inspect and release goods out side the customs area with prior approval of the Director General of the Department of Customs. For this the importer should have to deposit an amount equivalent to fifty percent more than that of the declared value. At the time of realizing the goods the excess amount is refunded after deducting the chargeable duties. For inspecting and releasing the goods outside the customs, importer has to pay one thousand rupees per consignment as a fee and manage vehicle for transportation if required.

What kind of goods is allowed to import from third countries without license or L/C or payment?

• The goods to be imported by the offices of the Government of Nepal, Public Corporation, Social Institution or Academy

• The goods to be imported by the project, to the extend mentioned in the bill of quantity, on the recommendation of the concerned ministry

• The emergency medicines donated to disabled sick person of Nepal by an individual or institution • Printed materials such as poster, calendar for the purpose of advertisement

• The goods worth up to U.S $1000 received as a souvenir or prize while participating on seminar, meeting, convention etc. on the invitation of foreign government or an international institution.

• On the recommendation of the concerned ministry, the goods provided as souvenir, donation or grant to the non profit motivated service oriented association of Nepal by the friendly country or an international association/ institution, social institution or individual

• On the recommendation of the Department of Industry, the machines and raw materials imported as a capital investment according to agreement by the industry operating under joint venture or foreign investment.

• On the recommendation of the concerned ministry, the personal goods imported by the foreign individual or foreign investor working in the project in Nepal operating under the joint venture/ foreign investment agreement.

• Materials such as advertising, label, sticker and sample with emblem of any company or firm worth up to U.S $ 1000.

• Office materials worth up to U.S $ 5000 send by head office of the foreign company, joint venture company or foreign airlines to the registered representative office, branch office or general sales agent in Nepal for the purpose of operation of the office.

• The goods, customs duty and VAT exempted by the Ministry of Finance, imported by the friendly country or international or regional association/institution for own use.

What are the provision regarding importation by mountaineering group or study or research team?

It requires the recommendation of concerned ministry.

What is transit facility to mountaineering group in Nepal to re-export in other country?

This type of transit facility is granted to only mountaineering group by the DoCSM on the recommendation of concerned ministry.

What facilities are provided to vehicle brought in by transit?

 Vehicle of personal use brought in by tourist under a carnet is allowed to stay in Nepal for a period of six months during one year without payment of import duty. In other situation, tourist can import vehicle as a temporary basis for a period of 30 days during one year and has to pay chargeable duty of each day, as per the Finance Act according to kind of vehicle.

Can the vehicle imported under carnet be sold or given as gift or donation?

No. Vehicle imported under a carnet is prohibited to sale or given as gift or donation. Such vehicle must return back.

What happens if the vehicle imported under carnet is not returned back?

Vehicle is confiscated.

Can the machines, equipment and apparatus be imported temporary in Nepal for some purposes on the basis of retuning back? What is about the duty?

Yes, can be imported. The import duty is not charged for a period of three months if it is imported on the recommendation of the Ministry or Embassy. In the absence of such recommendation, chargeable import duty should kept in deposit and importation can be done for one year. If it is returned back in specified time the full deposited amount would be returned.

Can the imported goods in Nepal be re-exported, without any physical change, to another country? If yes, what is the process and how much is the duty?

 Yes, it can be re-exported to other countries except India. For this the application must be submitted in the customs office at the time of importation. On the basis of that application the customs office releases the goods against deposit of chargeable duties and if the goods are re-exported within six month of the date of importation, the customs office returns back the deposited amount after deducting ten percent of the chargeable customs duty. But mill, machinery and raw materials are not allowed to export.

What process should be followed while attending the fair or exhibition with goods to exhibit in the foreign country?

For it the application, containing the details about country, duration of fair or exhibition, should be submitted in the concerned customs office with the recommendation of Trade and Export Promotion Centre. After receiving the application the customs office allow the export of goods on deposit of the chargeable duty. If the portions of goods are sold in the fair or exhibition, the evident of foreign exchange earning is to be submitted in the customs office and the remaining goods should be returned within 30 days after the completion of fair or exhibition. In case of failure to bring goods within specified period the duty is imposed as equivalent to new goods.

Are the exported goods from one customs point (say TIA customs office) for fair or exhibition returned from another customs point (say Birgunj customs office)?

No, as per the customs Rule 2064 (2007), it should be returned from the same customs office from where it was exported.

Are there any goods which need not to fill declaration from?

Yes there are. The goods under baggage rules which are not liable the customs duty according to the notice published in the gazette by the Government of Nepal, need not to fill declaration form

What is the process to send any goods to a foreign country for the purpose of repair?

The full particular of the goods should be filled up in the declaration form and submitted to the customs officer. The customs officer may allowed sending such goods after receiving deposits equivalent to 0.5 percent of the value of goods for air craft, helicopters or spare parts thereof and 5 percent of the value for the other goods.

Within what period the goods should be brought back from a foreign country which was send for repair? Whether the duty is imposed or not?

The goods should be brought back within three months and customs duty is charged on the expenses involved on such repair or on the price of the spare parts which are replaced. After deducting the customs duty from deposit furnished, the balance of the deposit is refunded.

Is there any provision to extend the time limit in case of inadequacy of three months time for repair?

The customs officer can extend the time limit for another three months and in case of inadequacy of such extended time, the customs officer can again extend the time limit with approval of the Director General of the Department of Customs.

What happens if the goods exported for repair are not brought back within the time limit?

The deposited amount is seized and such goods are treated as fresh import and customs duty is charged.

Are the goods released from the customs office can be re-inspected by other institution in the route to destination?

The institution other than the officer empowered by law relating to investigate revenue leakage can not open or inspect the goods. The other institution requires prior approval of the Ministry of Finance or the Director General of the Department of Customs.


Banned, Quantitative Restriction and Permission on Imports

What are the Prohibited/ banned goods for import

• Health hazardable narcotic intoxicating goods such as hashish, heroin, opium, muffin etc.
• Beef
• Hazardous ouzo dyes as specified by the Government of Nepal through publishing the notice in Nepal gazette time to time
• Plastics scrap and bags and sheets of plastics below the 20 micron thickness
• High carbon disposing incandescent light bulbs
• Goods prohibited/ banned by other existing laws
And stacklector or combined harvester with baler

 

What are the goods to be imported under license or permission letter?

• Narcotic and psychotropic medicine and raw-chemical for those medicine on the recommendation of the Ministry of Home Affairs.
• Arms and ammunitions, explosive substance, materials required to produce explosive substance, guns and bullet for gun caps except paper and other explosive substance, arms and ammunitions on the recommendation of the Ministry of Home Affairs.
• Radio equipment such as wireless, walkie-talkie, transmission receiver, link radio equipment etc., and similar kind of radio equipment such as transmission of words, dialogue, scene and statistics on the recommendation of the Ministry of Communication

What are the goods under quantitative restriction?

Quantitative restriction for import is on poppy seed only.

What should be done to import poppy seed?

License should be obtained from the Ministry of Commerce and Supply.

Are there any goods which can be imported only by specified institution or association?

Yes, Salt Trading Corporation Ltd. and Nepal Oil Corporation Ltd. are the specified institution to import ionized salt and petroleum product (petrol, diesel, kerosene, aviation fuel and LP gas) respectively.


Banned, Quantitative Restriction and Permission on Exports

What are the prohibited/banned goods to export from Nepal?

• Archaeological, historical and religious goods of importance:
a) foreign and Nepalese coin
b) Idol of god and goddess, Tad Patra, Bhoj Patra
c) Pauwa
• Wild Fauna:
a) on mammal 26 species are included
b) on avis 9 species are included
c) on reptile 3 species are included

• Aakhetopahar (dead body or identifiable any part of body or any substance of the body or goods made from mixture of substances of endangered species of wild fauna)
• Intoxicating and Narcotic goods (the intoxicating and narcotic goods including hashish, heroin, opium, as defined by the UN Convention Against Traffic in Narcotic Drugs and Psychotropic Substance, 1988 and Single Convention on Narcotic Drugs, 1961
• Exclusive and materials for arms and ammunition:
a) Explosive substance and fuse for it and materials required for fuse
b) Materials required for production of weapons for military use
• Industrial machinery, parts thereof and raw materials:
a) raw skin
b) raw wool and hair of wild fauna
c) industrial machinery and parts thereof
• Forest products:
a) Dactylorhiza hatagirea and juglans regia
b) Herbs without permission of concerned institution and without processing ? Nardostachys grandiflora ? rouwlfia serpentina ? Valeriana jatamasi ? Lichen spp ? Abies spectabilis ? Taxus spp ? Cinnamomum glaucescene c) Wood log and swan timber of: ? Shorea robusta ? Dalbergia ? Pterocarpus marsupium ? Juglans regia ? Wild sissoo d) Rock exudat e) Cordyceps sinensis and picrorhiza scrophulariifolia f) Orchids, red sandal; • Petroleum products: a) Petrol b) Diesel c) Kerosene d) L.P Gas e) Aviation Fuel (other than used by airlines for international flight)

What kind of wood of forest product can be exported?

 Log and swan timber of Sissoo (except wild), teak, and eucalyptus produced in own land can be exported on the recommendation of the District Forest Office.

Can red sandal and Orchids be exported?

These are listed in the appendix of CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora). Hence, needs the official certificate of CITES for export or import of red sandal and orchids.

In what situation the mill machinery imported by an industry can be exported or sold abroad?

In the case of:
• Such mill machinery are not in use to the industry and
• In a situation if the industry is closed

What is the process of exporting mill machinery?

On the recommendation of the Department of Industry it can be allowed to export without contravening the provisions under any bilateral treaty. This means mill machinery imported from third country are not allowed to export India.

Can the raw materials imported by the industry be exported?

If certain conditions are fulfilled raw material can be exported. The conditions are:
• If the imported raw materials are not use to own production of an industry.
• If it does not contravene the provisions under any bilateral treaty.
• If the Department of Industry grants permission to export

If is the imported mill, machinery, raw materials, parts are found different from that of the description mentions in the purchase order or found sub-standard, what would happen?

Such goods imported to Nepal are allowed to take back on the condition to re-import similar goods or remittances of equivalent foreign exchange.

Are there any goods on quantitative restrictions to export from Nepal?

There is quantitative restriction on some goods such as paddy, rice, wheat, pigeon peas and sugar (except to be received from European Union)

Is there any value limit to export by post parcel?

• Up to U.S $ 5000 if the payments are made under approved banking system.
• Up to U.S $ 500 if the payments are not made under approved banking system.

Is there any solution if the amount exceeds U.S $ 5000 or U.S $ 500?

The license should be obtained from the DoCSM.

Can Nepalese distributing agency of reputed products producing International Company re-export the imported goods?

Yes, the Nepalese agency can export the goods without license within the region for which the agency is authorized.

What types of goods are allowed to export under Open General License (OGL)?

• Non prohibited or non banned goods for export
• The goods which need not any permission from any institution.

Is there any provision to inspect and release the goods by the customs in the product site or in warehouse for the purpose of export?

Yes, there is. For this first of all declaration from with application should be submitted in the customs office and in case of valid reason the customs office inspect and release the goods for export. For this type of inspection one thousand rupee as a fee should be paid and the vehicle for the transportation should be managed by the exporter himself.


Customs Duty and Demurrage

Whether the customs duty is same on imports from any country?

There is some rebate on chargeable customs duty on import from India, Tibet of China and SAARC countries. This kind of rebate is provided according to the provisions mentioned in the Finance Act.

How to know the rate of revenue to be paid in customs office while importing different goods?

It can be known from Finance Act/ Finance Ordinance. It contains the rate of customs duty and other tax and duties as well. The Act/Ordinance is published in Nepal gazette which can be obtained from the Department of Customs and the Customs Offices. 

Are there goods on which full exemption in the customs duty are granted on import?

Full exemptions on the customs duty are granted on importation of following goods:
a)
• Eggs of silk worm
• Edible salt
• Electrical energy
• Sheath contraceptives
• Wood swan or chipped
• Books, newspaper, journals
• Silk worm cocoons suitable for reeling
• Wool, not carded or combed
• Cotton, not carded or combed
• Cotton waste including yarn waste and garneted stock
• Cotton carded or combed 


b) Pet chips to be imported by the industry producing P.O.Y
c) Fertilizer
d) Sindur (vermilion), Bangles, Tika, Tikuli
e) Raw jute to be imported by the jute industry, postal stamp, post card, aerogram, passport, excise stamp to be imported by the government and traditional calendar (Patro) and printed books.
f) P.O.Y and man-made staple fibers to be imported by the yarn industry registered in the Value Added Tax
g) Chassis, engine, motor and battery charger to be imported by the registered industry producing electric, solar or battery operated three or four wheeler passenger or cargo vehicle
h) Blood bags, transfusion set, testing kits, re-agent and different apparatus and chemicals to produce blood testing re-agent to be imported by the Nepal Red Cross Society to provide blood transfusion services.
i) White cane, slate stylus, Braille note taker, Bralo (Braille printer), water and light indicative machineries, Braille type writer, Braille watch, abacus, magnifying glass, Braille compass, Braille book, Braille embosser, Braille stencil machine to be used by blind.
j) Wheel chair, tri-cycle, crutches, artificial parts of the body, hearing aids and shoes to be used by disabled.

Is the customs duty charged on goods of short shipment?

For the short shipment, it should be certified by the Customs Commissioner in CTD at Calcutta. At the releasing process the importer should deposit all the duty in the customs office and, the importer should submit proof of receipt of insured amount from the insurance company. Then the Ministry of Finance may decide to grant exemptions on short shipment in this circumstance.

Is the customs duty charged on partial lost goods on route or lost due to an accident?

For the partial lost or stolen goods the customs duty is not rebated but in case of those goods losses in an accident, the importer should submit proof of receipt of insured amount from the insurance company. After receiving the proof, the Ministry of Finance may decide to grant exemption of duty on goods losses on accident.  Duty exemption in case of compilance to customs act .

 

Can the temporary imported goods, under the condition to return back letter on, be kept in Nepal by paying chargeable duty?

• Vehicle brought under carnet or vehicles imported on temporary basis registered in abroad, by paying customs duty, can not be kept in Nepal permanently. This provision applies to diplomatic mission as well.
• Vehicles, machinery, equipment and apparatus imported by a project or contractor under bilateral agreement and other goods imported for fair, exhibition and hatbazar on the temporary basis can be kept in Nepal by paying chargeable duty within the specified period.

How long the temporarily imported vehicle can be kept in Nepal and what is the chargeable duty?

The vehicles can be kept up to maximum period of 30 days in a year and the chargeable duties are as follows.
• Rs. 1000 per day for car, jeep and van
• Rs. 1000 per day for bus, minibus and tourist bus
• Rs. 200 per day for motor cycle and scooter
• Rs. 500 per day for three wheelers 
• Rs. 300 per day for tractors

Is there any provision to bring vehicle in the nearest market of the boarder?

No duty is to be imposed on vehicle which returns back on the same day after visiting the nearest market of the border of Nepal. For this registration document in the customs point is compulsory.

What is the chargeable customs duty to passenger bus operating between two cities of countries such as Kathmandu- Delhi?

For the passenger bus and mini bus operated according to the agreement between two countries, the provisions laid down on such agreement are applied.

How long the vehicle for transportation of goods is allowed to import temporarily at a time and what is the chargeable duty?

Vehicles other than transports of goods are allowed to import temporarily for a period up to 7 days and the chargeable duty per day is Rs. 1500.

How much is the chargeable duty to the loaded trucks and trailers with fully loaded container transporting the goods from foreign country to Nepal?

Such trucks and trailers are allowed 72 hours to unload the goods to the destination and no temporary import duty is charged. Trailers with empty containers coming to load goods from the customs area for transportation is also not charged temporary import duty for 72 hours. However, if the truck or trailers transport the goods from the place other than the customs area and returns within 48 hours the temporary import duty of one day is imposed.

 

What happens if the vehicles and means of transport are not taken back within specified time?

These might be seized if found to have overstayed than the period declared in the customs declaration form. Nevertheless, the chief of the customs office could allow to be taken back after paying duty for overstayed period at the rate of Rs. 1000 per diem in the case of motorcycle and Rs. 2000 per idem in the case of other vehicles if appropriate reason is found to exist in the course of taking back such vehicles and as such duty are not exceeded the amount of the value of vehicle.

What happen if tuck or trailers failed to be returned within 72 hours due to general strike, natural calamity, accident etc.?

In such case the chief of the customs office could extend the time for maximum period of other 3 days and in such case duty is not imposed for the extended period.

What are the provisions relating to temporary import of tractor and trailer?

On the temporary import of a tractor, customs duty at the rate of Rs. 300 per diem is imposed. However, on the temporary import of a tractor fitted with trailer or trailer alone a sum of Rs. 600 per diem is charged as a customs duty. Nevertheless, if tractors entered into Nepal with a trailer loaded with commodities and returns empty within 48 hours no duty is charged.

How long the temporary imported tractor/ trailer are permitted to stay in Nepal?

Tractors or trailers or tractors fitted with trailers thus imported are not permitted to stay in Nepal for more than 30 days. It might be seized if found to have overstayed.

Whether the owner of any goods needs to present in person to clear the goods from the customs office?

The owner of any goods needs not to present in person in the customs office to clear the goods. He/she can appoint his/her customs agent, who has obtained the license of customs agent from the Department of Customs, to get goods cleared from the customs office.

Is the duty imposed on re-imported of exported goods?

Duty is not imposed in re-imported parcels if such parcels are not delivered to the concerned party by the post office, if the concerned party rejected the goods or lost the quality due to an accident or natural calamity; in other cases the duty is imposed. 

Is the exempted duty on raw material collected if the finished exported products of Nepal are return back to Nepal?

If the exported products of Nepal are returned back, chargeable duty on raw materials and auxiliary raw materials is collected.

Which exchange rate and tariff rate either of the day of registration of declaration form or the day of clearing the goods is applied?

The exchange rate and tariff rate of the day in which the declaration from is entered in the computer or registered in the customs office is applied.

What is the formality to be fulfilled regarding duty privilege for transit goods through Nepalese territory?

 In case of sending goods from one part of foreign country to another part of foreign country through Nepalese territory, the owner should submit an application in the Department of Customs specifying the reasons for using Nepalese territory, import and export Customs points and description of particulars goods. After the application received, if the Department is satisfied, it can permit the movement of such goods on duty privilege. The Department may ask for letter from the concerned Embassy or Diplomatic office located in Nepal before granting such permission.

 

What is diplomatic facility?

 In this facility the goods are not inspected and duty is not charged, imports are kept on record.

What is duty facility?

It is a facility on which the imported goods are either inspected or not but duty is not charged.

Who enjoy the diplomatic facility and duty facility and how much?

These facilities are provided to diplomatic mission located in Nepal and staffs of the missions. The facilities to be provided are decided by the Ministry of Foreign Affairs, the Government of Nepal on the basis of Vienna Convention and reciprocity.

Are the goods on duty exemption be imported in the name of project or contractor?

Partial or full customs duty are exempted to the goods to be imported in the name of any project operated under foreign aid or in the name of the contractor of such project. 

What is meant by demurrage?

It is a charge to be paid to the customs office on the goods placed in warehouse operated by the customs office in case the goods are kept more than 7 days.

What is the rate of demurrage?

a) The rate on Tribhuvan International Airport Customs office is:
• Per day per KG charge 60 paisa up to 30 days
• Per day per KG charge one rupee from more than 30 days up to 60 days
• Per day per KG charge Rs. 1.40 from more than 60 days
b) The rate on other customs offices is:
• Per day per KG charge 40 paisa up to 30 days
• Per day per KG charge 60 paisa from more than 30 days up to 60 days
• Per day per KG charge 80 paisa for more than 60 days

Is remission of the demurrage possible and who can grant the remission?

If the owner has reasonable ground due to which the goods could not cleared within the prescribed time limit, remission of the demurrage is possible. The Chief Customs Officer has power to grant remission up to Rs. 300000 and for over and above this amount approval of the Director General is compulsory.

How the weight is counted for the purpose of demurrage charge?

For the purpose of demurrage charge, to count the weight, all goods in the customs declaration form or one consignment counted for weight. While counting the weight if the remaining goods are less than one KG it is treated as one KG

What is the time limit to release the goods stored in the customs office operated warehouse?

The goods which are stored in the customs office operated warehouse are to be released within 60 days of the entry in the warehouse.

What happens if not released within 60 days?

The customs office gives notice allowing 7 days for releasing the stored goods . If it is not released within allowed time, the good are seized.

In which situation the demurrage is not charged to the goods stored in the customs operated warehouse?

In the case of goods kept by the customs office due to the cause of valuation, classification, laboratory test or other reasons, the demurrage is not charged to the goods stored in the customs operated warehouse

What is the rate of customs duty for the vehicles imported by the projects or foreign diplomatic missions/embassies if sold after 5 years from the date of importation?

Vehicles imported, under customs privilege or full or partial exemption or imported under bank guarantee, if sold after 5 years of the date of importation, are allowed 40.951 percent depreciation and on the remaining balance 60 percent of the chargeable customs duty is exempted. For the purpose of valuation on the remaining foreign currency balance, after deducting 40.951 percent depreciation, conservation in Nepalese currency is done at the exchange rate of the day of computer entry or registration of the declaration form, on such vehicles excise duty and value added tax are charged as per schedule.

How much is the percent of value of the vehicle is to be paid as a revenue on the vehicles, imported under diplomatic privilege/ duty privilege by the missions/ embassies or staff working therein or imported by the project, operating under foreign grant or loan, on duty exemption or on bank guarantee if such vehicles are sold after 5 years of the importation?

Such vehicles are allowed 40.951 depreciation and 60 percent customs duty exemption on the remaining balance but are charged excise duty as well as value added tax as per schedule. The remaining foreign currencies balance is converted in Nepalese currency at the exchange rate of date of computer entry or registration of declaration form. Therefore, total duty including, customs duty, excise and value added tax the following percentage of the value of the vehicles should be paid as a revenue to government:
Vehicles Total chargeable duties in percentage
Car, Jeep, Van 138.66
Micro bus (11-14-seat) 96.17
Double cab pick-up 102.50
Single cab pick-up 89.84
Minibus (15-25-seat) 70.86
Motorcycle, Scooter 77.18
Bus (above 25 seat) and Trucks 32.88
Mini Trucks 32.88

Whether the importer should pay duty on goods if he does not want to release the imported goods and leaves in the customs office?

Importer should not have to pay duty but he has to submit application to handover the ownership of the goods to the government.

What happens if such goods are not useable or not sold in the auction?

 The cost which incurs for the destructions of such goods should be borne by the importer?

What is the importation process of goods granted as souvenir or donation to any Nepalese or Nepalese institutions by a foreign citizen or institution? How the customs duty is imposed on such goods?

 The approval of the Government of Nepal is required to accept such souvenir or donation. The letter of the donor with description of goods and value of goods should submit to the Ministry of Finance to accept such souvenir or donation. The chargeable duties as per schedule are imposed on such goods except in the case that the Ministry of Finance has decided to exempt duty.

Whether refund of the excess amount if paid more than the due amount of customs duty or the penalty is possible? If yes, how it is refunded?

Yes, it is refunded. The exporter or importer should apply for the refund of the excess amount at the customs office within 60 days of the release of the goods. Such application is examined and if it is found that the excess amount needs to be refunded such amount are refunded within fifteen days from the date of the application received.


Bonded Warehouse, Bank Guarantee and Pass Book

. What is bonded warehouse?

 It is a warehouse approved by the Department of Customs for storing imported raw material, auxiliary raw material or packing material (which are not available in the country) or goods to be sold in duty free shop imported under bank guarantee and such raw materials are used for manufacturing the goods for export or are sold within native country in convertible foreign currencies,

Which goods can be imported under bonded warehouse facilities?

The raw materials, auxiliary raw materials and packing materials of the industries, to be used for manufacturing exportable products and the goods to be sold in duty free shop can be imported under bonded warehouse facilities,

Are the guarantee of any banks, financial institutes or company is acceptable?

Only the bank guarantee of those banks and financial companies which are approved by Nepal Rastra Bank are acceptable,

In how many days the industries importing raw materials, auxiliary raw materials for manufacturing exportable products are bound to export the finished goods?

The industries are bound to export within 11 months of import of such raw materials. 

. Can the time of 11 months be extended?

 If the export could not take place within 11 months, the Chief Customs Officer can extend up to another 6 months on the request of the industry.

Within how many days the bank guarantee is released after submission of all documents of exports of the goods manufactured by the raw material imported under bank guarantee?

 If all necessary documents are submitted for the release of bank guarantee, it is released within one month. In case of any obstacles to release the bank guarantee, the customs office should provide reasons in written to the concerning party.

Is partial release possible?

: If the use of raw material is partial, and the export takes place within specified period the partial release in proportion of used raw material is possible.

What will happen if the industries that were expected to ex sport the products using the imported raw material, auxiliary raw material under bank guarantee did not apply for release after export of finished goods or without exporting it?

  In such cases, the duty prevailing at the day of import with an additional 15 percent charges is collected from the bank guarantee.

. Who is entitled to get bonded warehouse facilities?

The followings are entitled to get such facilities:-
• Industries exporting ready made garments
• Industries exporting their products to third countries
• Industries exporting minimum 50 percent to India and
• The license-holder importer to sale the imported goods in duty free shop  

What is duty free shop?

 It is a government license holder shop that imports under bank guarantee and sales goods to foreign diplomats under diplomatic privilege or duty privilege or for catering service to international flight or sale to concerning airlines in duty free shop.

What is the procedure of importing goods by duty free shop?

The license-holder director of duty free shop can import the goods bank guarantee equivalent to the amount of prevailing duty. While importing the goods approval of the Department of Customs is required regarding the items and quantities. 

Which agency issues the license of bonded warehouse?

The Department of Customs issues the license.

How much revenue should be paid for seeking license?

  For receiving license one should pay six thousand Nrs and for renewal Nrs three thousand is required,

When the bonded warehouse license should be renewed?

 The license should be renewed for each financial year before the commencement of new financial year

What should be done by the person who fails to renew?

  The person who fails to renew the bonded warehouse license cannot use the facility during that period,

Can the license be renewed after 2/3 years of the expiry of renewal period?

The license can be renewed after making the payment of extra three thousand Nrs. for each financial year with regular renewal annual fee, if the renewal period is expired.

While furnishing the bank guarantee, is it sufficient the amount equivalent to the duty of the good?

The goods to be imported under bonded facilities an additional 15 percent amount with the chargeable duties should be covered in the bank guarantee.

. What should be the duration of bank guarantee?

The duration is from 6 months to one year. The guarantee of six months it can be extended for next six months. 

Is recommendation required to import the packing materials which are not produced in Nepal, under bank guarantee?

To import packing materials which are not produced in Nepal, the recommendation of the Department of Industry is required to get bonded facilities.

Can the operator of duty free shop license-holder store unlimited quantities of goods and sale from there?

The license holder of duty free shop can store and sale the goods as approved by the Department of Customs.

Can the duty free shop sale cigarette and liquor to foreign tourists and foreign guests?

 The duty free shop can sale only to those persons recommended by the Ministry of Foreign Affairs and an individual institution approved by the Department of Customs under diplomatic or duty privilege. 

What is pass book?

The industries that export their products are allowed to import the raw material and auxiliary raw material on the basis of cash deposit equivalent to the duties and taxes. While importing under this system, there is an arrangement to enter into the register kept by the Customs and Industry. This register is called Pass Book. If the industry exports the product manufactured by the raw material within the specified period the industry can utilized the deposit to other import or get refund. But the VAT should be paid in customs at the time of import.

What is pass book facility?

Pass book facility is one that is provided to industries which have not acquired bonded warehouse facilities to import raw material and auxiliary raw material or packing material not produced in Nepal. In such facilities cash is deposited to cover the amount of the tax and duties to be levied on the imported raw material .The deposit, import and export are recorded in the pass book. This facility is called pass book facility.

What process should be followed to clear goods under pass book facilities?

 The following process should be followed:-
• Application should be submitted in specific format in specified custom office.
• On the basis of the application of concerning industry the customs office collects specified the duties and fees as deposit from the industry and keeps records in the register.
• One copy of pass book is provided to Industry.
• VAT is collected at the time of import.

Is pass book facility available at any customs house?

The export and import under pass book facilities can be done from the customs points as specified by the Department of Customs.

Which are the customs point specified by the Department of Customs for export and import under pass book facilities?

 The following are the customs points specified by the Department of Customs:-
• Mechi Customs Office
• Biratnagar Customs Office
• Birgunj Customs Office
• Bhairahawa Customs Office
• Nepalgunja Customs Office
• Tatopani Customs Office
• Tribhuvan Airport Customs Office
• Kanchanpur Customs Office (for export only)

. Can an industry import or export through all customs offices specified by the Department of Customs?

The industry can export or import from one of the specified customs point.

How much is the minimum percentage of own products that should be exported to India to get bonded warehouse facilities?

The industry should export minimum 50% of its production.

Within how many days the industry should export the goods manufactured by the raw material imported under pass book facility?

 The industry should complete the export of the goods manufactured for export from the raw material imported under pass book, within one year.

Can the time be extended, if the industry failed to export the product manufactured from the raw material imported under cash deposit or pass book facilities within 12 months of import?

The time can be extended for another six months if the causes shown in applications are reasonable.

How much should be value added to the value of import at the time of export of the goods produced from the raw material imported under pass book facilities?

 There should be at least 10% value addition to the transaction value of the raw material imported under pass book facilities.

What is the procedure of bank guarantee and cash deposit release?

 For the release of both an application should be submitted with following supporting documents:-
• Bill of import of such goods
• Bill of export
• Certified documents of concerning office in relation to the consumption ratio of the raw-Material, auxiliary raw material and packing material
• The sale record in the case of duty free shop
• The consumption records of international flight in the case of airlines.
• The certificate of minimum 10% value added and sale in case of yarn industry.
• Purchase and sale agreement
• Certificate or proof of foreign currencies earning

What happens, if the bank guarantee or pass book is not released?

If the bank guarantee or pass book is not released in specified time the duty and fees are collected from the cash deposit or bank guarantee with additional charges of 15% for bank guarantee and 10% for pass book.

. What is the procedure of getting duty paid from bank guarantee?

 The customs office demands the duty from the bank. The bank guarantee issuing bank should send payment of such demanded amount Within 15 days.    

What happens if the bank guarantee providing bank or financial institution does not pay the demanded amount?

 The responsibility of bank or financial institution does not end unless the customs releases the bank guarantee so it should be released by making payment or fulfilling the conditions. The bank or financial institution that fails to bear the responsibility is punished by not accepting the guarantee issued by such bank or financial institution and the bank or financial institution cannot escape itself from the liability for making payment .So the bank or financial institution should make payment without delay at the demand of customs.

What happens if the bank guarantee providing bank or financial institution does not pay the demanded amount?

 The responsibility of bank or financial institution does not end unless the customs releases the bank guarantee so it should be released by making payment or fulfilling the conditions. The bank or financial institution that fails to bear the responsibility is punished by not accepting the guarantee issued by such bank or financial institution and the bank or financial institution cannot escape itself from the liability for making payment .So the bank or financial institution should make payment without delay at the demand of customs.

When the bank releases the bank guarantee issued by it selves?

The bank releases it after getting the release letter from the customs office.

What is the consequence if the bank releases before getting the letter of release from customs?

 The liability of making payment of duty and fees remains yet on the bank.

What is Special Economic Zone?

It is a Zone specified by the Government of Nepal by publishing notice on gazette as Special Economic Zone. In such zone especially export oriented industries are established. It is a kind of duty, fees free zone too.

What is Special Economic Zone?

It is a Zone specified by the Government of Nepal by publishing notice on gazette as Special Economic Zone. In such zone especially export oriented industries are established. It is a kind of duty, fees free zone too.

What are the arrangement of sale of goods to the industries established in such Special Economic Zone and refund of duty?

 There are following arrangements:-
• Pre approval of the Department of Customs is required for sale.
• If the import duty had paid at the time of import in such case duty can be refunded.
• The application for refund should be submitted within the sixty days of the sale of goods.
• The refund is not made if on the import price customs duties are added in selling price.

What documents are required to get duty refund?

The following documents are required to get duty refund:-
• Bill at the time of import, customs declaration form and cash receipt
• The sale and purchase agreement between the seller importer and purchaser industry.
• The bill of sale of goods.
• The certified documents of purchase.
• The proof of payment made by purchaser
• Bank guarantee
• Certificate of Export by industry.
• Proof of foreign currencies received.

In how many days the duty refund process is completed?

It is completed within thirty days of submission of application for partial or total refund of duty.


Laboratory Test

Is it required to Laboratory test for the clearance of goods from the Customs? If it is required what type of goods required to be tested?

Yes it is required. The following items are to be tested:-
• Food products.
• Chemical materials which posse confusion to the customs in classification.
• Those items which are essential to test their quality standards by the customs offices.
• The raw material of medicines.

If the test result shows that the item imported does not comply the standard, what action is taken?

 If the test shows below standard the importer on the condition of bringing the foreign currencies can return the goods to the exporter within one month under the approval of the Department of Customs. If the importer did not return such goods it is destroyed on the expenses of the importer. In such case, the customs duties are not to be paid.

. What is the consequence if foreign currencies are not brought back?

 If foreign currencies are not brought back, the action is taken in misappropriation of foreign currencies.

Is there separate laboratory of the Department of Customs?

Yes there is. It is in the Department of Customs at Tripureswar, Kathmandu. 

What type of goods is tested in the Laboratory of the Department of Customs?

The following items are tested in that laboratory:-
• Pharmaceutical raw materials
• Additives
• Colors
• Dyes
• Organic solvent
• Industrial raw material (Chemical type)
• Alcoholic and nonalcoholic beverage
• Oil food grade or non food grade
• Fats
• Petroleum products
• Food stuffs
• Polymers
• Tea leaf
• Stuffs which are mixed in water to make ready to drink
• Concentrates of vegetable
• Canted oil

Is it required to test the goods in the Laboratory of the Department of Customs only?

There are two conditions as follows and the concerning customs office can send for test:
a) If laboratory is specified for specific goods, it is necessary to test in such laboratory.
b) In other cases the test is carried in the laboratory of the Department of Customs or other recognized laboratory.

Should any fee be paid for laboratory test?

 In case of any fees are fixed, the importer should bear it. But there is no charges levied in the test in the laboratory of the Department of Customs.


Commodity Classification

What is commodity classification?

 Commodity Classification is the grouping of similar goods which are countless and traded in world trade, on the basis of nature, use, quality, composition of the goods.

. Which commodity classification has been adopted in Nepal?

Nepal has adopted Harmonized commodity description and coding system (HS). It is the developed and adjusted form of Customs Cooperation Council Nomenclature (CCCN) and Standard International Trade Classification (SITC)

. When the HS system was started in Nepal?

 It was started since Fiscal Year 2049/50. This system has been updated as per revised. The recent version is 2012 which is going to be adjusted.

What are the specialties of this system?

 The main specialties are:-
• Uniformity and similar order in classification of the goods in international trade.
• Established customs language at custom points.
• Helps to conduct trade agreement
• Uniformity in trade statistics
• Facilitate comparison of international trade and data analysis.

What are its objectives?

 The objectives are:-
• To simplify the imposition of duty on import/ export of goods.
• Record real data of international trade.
• Determine the country of origin of the goods.
• Monitor the trade and control
• Remove the trade barrier and facilitate trade.

Who are its users?

Its users are:
• Government
• Traders
• International Organization
• Transport Agents
• Importer and Exporters
• Producers
• Statisticians
• Transporters
• Authority of Port Operation 

What is the procedure of HS classification?

 The classification procedure is as follow:-
• Search the description of goods from bills, agreement, and analysis report issued for the goods.
• Conduct physical examination and laboratory test.
• Verify technical description of goods.
• Look the condition of presentation of the goods
• Find the level of production - such as raw material, non worked, worked, semi finished, finished etc.
• Identify the use and function of goods.

What is the structure of HS System?

  There are 21 Sections, 97 Chapters, 1224 Headings and 5205 Sub-headings. While classifying the goods, the sub-headings up to six digits are same to all countries .In this six digits sub-heading first two digits denotes chapters and second two digits denotes headings and the last two digits denotes the specific goods.

What is the structure of HS System?

  There are 21 Sections, 97 Chapters, 1224 Headings and 5205 Sub-headings. While classifying the goods, the sub-headings up to six digits are same to all countries .In this six digits sub-heading first two digits denotes chapters and second two digits denotes headings and the last two digits denotes the specific goods.

What arrangement has been made for uniformity in interpretation of HS and classification of goods?

To maintain uniformity in interpretation and classification there are six rules of interpretation. The classification is guided through these rules.

What are the study materials of HS systems?

The study materials are given below:-
• General interpretive rules of HS system (GIR)
• Explanatory Notes from Chapter 1 to 97
• The decisions of World Customs Organization
• HS Alphabetical Index.
• HS Commodity Database(CDROM)
• Certified Compendium and Brochures of WCO

In which aspect of Harmonic Code number, should the importer/ exporter should give attention?

The importer/ exporter should mention detail description of goods and declare detail descriptions in declaration form. If Customs office demands additional description of goods or analysis report and technical specification for the proper classification it should submit to help the customs office. 

Is there the provision of appeal in disagreement in classification?

In case of disagreement the importer/ exporter can appeal against the decision of the customs to the Director General of the Department of Customs within 30 days of customs clearance .

What is the basis of classification to be undertaken by the Director General of Customs?

The basis are:-
• Harmonized System of World Customs Organization
• The suggestions of concerning expert or suggestions of national or international agencies.

What is the way out to release goods in case of confusion in classification?

 In such condition goods can be release according to the classification decision of the customs on deposit of chargeable duties and fees. After the final classification decision, the chargeable duty is deducted from the deposit furnished and then deposit is released.


Customs Valuation

What is Transaction Value?

 Transaction value is the value of goods actually paid or payable to the seller by the buyer.

What types of expenses are added in transaction value?

The following expenses are added:-
• The commission of mediator or broker
• Container expenses
• Packing expenses
• Transport cost up to customs point of import
• Loading unloading and handling charges up to customs point of import
• Insurance charges up to customs point of import
• Other related expenses.

What is the basis of valuation of imported goods of any importer?

Generally the customs valuation is under taken as per the regulation of the importing country. But the WTO member country should incorporate the valuation principle laid by WTO, in their national law.

What is the basis of WTO valuation principle?

The following are the basis:-
• Article VII of General Agreement on Trade and Tariff (GATT) 1994
• The Agreement for implementation of the Article VII of the General Agreement on Trade and Tariff 1994 and this agreement is well known as Customs Valuation Agreement in brief.
• Ministerial decision of Uruguay Round(The provision of rejecting the declared value in case of the customs administration has reasons to doubt about the truth and accuracy of the value declared).

What are the Methods of customs valuations?

The basis of valuation is the transaction value of the goods. There are 6 methods of customs valuations. They are:-
• Transaction value Method
• Transaction value of identical goods Method
• Transaction value of similar goods Method
• Deductive value Method
• Computed value Method
• Fall back or reasonable basis Method

How the methods of valuation are applied?

 The methods from 1 to six are given in sequential order. The value of the goods should be determined on the basis of transaction value of the particular goods. If it is not possible then the second method should be used. This order of application should be followed from one to six.

Can the use of these methods be reversed?

The methods from 1 to3 cannot be reversed but method 4 and 5 can be reversed on the request of the importer and on approval of customs authority.

What is sixth method?

 This method has been provisioned to settle down the problems arising on particular situation but in ultimate this method is transaction value method.

What are the essential conditions to adopt transaction value method?

Followings are essential conditions:-
• There must be invoice, sales agreement and purchase order of the goods.
• Such goods must not be restricted for sale or export/ import.
• There must not be the conditions of sale or distribution by the exporter to importer.
• The exporter and importer must not be the relatives and in case of relatives their relation must not has influence the value of the goods.

What are expenses that cannot be included in transaction value?

 The following expenses cannot be included as a part of transaction value:-
• All discounts except Retrospective discount
• Following expenses quoted in invoice-
• The interest for the installment payment.
• Fitting and transport expenses after importation
• Duties and taxes levied in the country of importation

How to calculate the value of the invoice of foreign currency?

 The foreign currency is converted in local currency by using rate of exchange. Such rate of exchange is the rate published by designated authority of the country. The use of the date of rate of exchange differs from country to country.

How the rate of exchange is determined in Nepalese context?

 Nepal Rastra Bank is the legal authority to determine the rate of exchange in Nepal. It publishes the rate of exchange daily. In Nepal the date of registration of customs declaration form or the entry in computer is the proper date to use the rate of exchange for valuation and duty purpose.

In which situation the identical method is used?

 If the transaction value (1st. method) could not be used, the transaction value of the identical goods which are already imported before is used to determine the transaction value of the goods going to be valued.

What factors should be matched to be the goods identical?

 The following are the factors that make the goods identical:-
• Physical characters, quality and reputation should be same
• The country of production should be the same
• The producer should be the same.


What happens in case of the identical goods of different producer and minor differences present in the goods?

 This can be consider if the price of the imported goods is not influenced and incase of different producer if other conditions are met it also can be considered.

When the similar goods method is used?

This 3rd. method is used, if the 1st. Transaction value and 2nd. Identical goods methods are impossible to apply.

What type or quality should be there to be considered the similar goods?

There must be following quality to be considered similar goods.-
• Can be used in similar function and commercially interchangeable.
• Produced in the same country
• Produced by the same producer
• Among the above characteristics, if the producer is different and other things are similar, it can be considered similar. If the function, character, and quality are same and only different from commercial point of view, it can be considered as similar goods.

When the Deductive value Method is applied?

This is used when the other methods from 1st to 3rd methods are unable to determine the transaction value of the goods in question. For this, in the first step selling price of identical goods in the country of importation is taken and all expenses and profits, duty and taxes are deducted to reach the actual value at the customs point.

What are its’ conditions?

The following are its’ conditions:-
• The sale should take place at the time of importation.
• The sale should near/ about the time of customs clearance.
• If the nearest time of sale is not available the sale within 90 days can be considered.
• If the identical and similar goods are not available the sale of-refined and processed goods of same kind can be considered.
• The seller and purchaser must not be the relatives
• The price of higher aggregate quantity of sale must be used.

What types of expense are deducted to determine the value?

To determine the value, the following expense are deducted:-
• Sales commission, profits and the general expenses that are added in price of sale.
• Transportation, insurances and other expenses incurred in the country of importation.
• The import duties, sale taxes and fees and taxes levied in import
• If the re processed goods is taken for the sale price the value addition there in.

What is Computed value Method and when it is applied?

This is the 5th. Method of determining the value on the basis of expenses incurred while manufacturing the commodity in the country of export. If the method from 1st to 4th becomes unable to determine the value, this method is applied. In this, the value is determined on the basis of production cost.

What are the expenses added in the value?

The following expenses are added:-
• The cost of raw material and production processing cost
• Profit in the level as in the export of same kind of goods and general expenses
• Transportation cost, insurance, loading and unloading handling expenses (if the country of importation had provisions to add these in customs value)

What are the difficulties in computed method?

 The detail description of costing should be provided by the producer company of the exporting country. This description should be examined by customs authority of importing country. If the producer as well as the government of exporting country are positive to furnish the description in such situation the value can be computed under this method otherwise it is not possible.

What is 6th Method i.e. reasonable or fallback?

 If the determination of the value could not be done under method 1st to 5th in such circumstances this method is used as the last resource. In this method the transaction value is determined with some flexibility. In this method also the previous methods are used in the sequential order with some flexibility.

Which are the main points that cannot be basis of valuation in this method?

The followings should not be the basis of valuation:-
• If the imported goods are produced in the country of import and are sold in local market, such local market prices.
• Higher value among two alternative values.
• Internal market price of exporting country.
• The value of the goods exported to other country except the country of import.
• Minimum customs value.
• Fictitious or discretionary value

Whom we considered to be related in this context?

 The followings are known as relatives:-
• Directors or officers in the business of each other
• Legal partner in the business
• The employer and employee
• Any person holding 5% and more vote or-share in business
• If one controls other directly or indirectly
• If both of them jointly control third person directly or indirectly
• If they are members of the same family.
• The term person denotes the legal person too here.

In which circumstance the transaction between two relatives can be valid?

 In the following circumstances the transaction between relative can be accepted:-
• If such relation has not influenced the value of the goods.
• If the importer certifies that the declared vale is near to the value of identical goods or similar goods or value determined under deductive method or computed method.

How the customs treat when the invoice price is not accepted or under invoicing is detected?

 In under invoicing the following actions are taken:-
a. The goods are cleared charging 50% additional duty in under invoiced value.
b. Such goods are purchased by the customs office paying the invoice value plus 5% profit on that value to the importer with the prior approval of the Director General of the Department of Customs.
<>b231. What can be done, if the importer does not agree the decision of the customs officer?
Answer:
• For review the decision application should be submitted in review committee within 15 days of the decision.
• The copy of such application must be submitted to the concerning customs office as well within 7 days of application submitted in the review committee.

What is the time limit to the review committee to finalize the decision on the review application of the importer?

The committee should finalize within 90 days.

What is the method of valuation of the goods imported under Barter system?

 In the system goods are imported in exchange of exported goods. So the amount may or may not be mentioned. There is no situation to apply transaction value method because of the absence of price. Even if the price is quoted it cannot reveal transaction value so the other methods should be applied to determine the value of the goods.

What process should follow to release the goods from customs, if the value determination takes long time?

 In such cases the customs officer can fix temporary value of the goods, the customs duty and fees taxes can be deposited in customs office to release the goods for the time being. The permanent or final valuation should be determined within thirty days of the temporary valuation.

Is there provisions of getting information by the importer about the value determination under other methods than transaction value method?

 Certainly there is. There is the provision to provide information of value determination without violating value determination principle of WTO.

Is it necessary to keep records of imported goods after customs clearance?

 It is necessary. The post clearance audit can be held at any time within four years of customs clearance, so it is necessary to safely keep all documents and records by the importer.

What is post clearance Audit?

The process of finding the truth of customs declaration at customs points, after the release of goods through the books of accounts and other relevant documents in importers promises, is Post Clearance Audit.

What is legal base of Post Clearance Audit?

Section 34 of The Customs Act 2064 has provisioned the Post Clearance Audit.

Who conducts the Post Clearance Audit?

The following authorities conduct it:-
• The officer specified by the Director General.
• The Post Clearance Office
• Customs officers

What are the possible areas to be detected by Post Clearance Audit?

The following are the possible areas:-
• Different goods than the declared one
• Less / more quantity of goods compared to declare
• Different value shown in records than declared

. What is penalty, if the post clearance audit showed the arrears?

 If it is proved that the revenue was lost due to undervaluation, the difference duty and fees and cent percent penalty are collected. In the mean time the further action is taken according to the prevailing Act of the country.

Which method of valuation is applied for the import of old or used items?

 The transaction value cannot be applied in valuation of old or used goods. The Customs Officer can apply the reasonable method to determine the value of old item.

How the value of the goods exported from Nepal is determined?

 The invoice price declared by the exporter is accepted as the customs value in case of export. But, if the Government of Nepal realizes the necessity to determine the value of any export item, value of particular goods is published in gazette.


Provisions of Customs Agents

What is customs agent?

Customs agent is the representative of exporter/ importer to act as the agent of the owner of goods, who clears the goods on behalf of the owner and who has got license from the department of customs or customs office.

Is the customs agent considered as the owner of the goods?

The customs agent authorized by the concerning exporter/ importer to clear the goods from customs is considered as owner of the goods for that purpose.

What is the process of acquiring the customs agent license?

 The Department of Customs publishes notice from time to time to call application from the persons who want to be customs agent. The person meeting the minimum qualification as specified in the notice can fill specified form and apply at the Department of Customs or the Customs Office.

What is the specified qualification to customs agent?

The following are the specified qualifications of customs agent:-
• Age of 21 years completed
• Bachelor certified or equivalent basic computer training for a period of atleast 3 months .
• The person having no arrears to pay to the Government of Nepal.
• Having not punished in criminal case from any court.

What are the procedures of selection of customs agent?

The selection procedures are written examination and interview.

How much should be paid for customs agent licenses?

Payment of seven thousand as a fee payment and seven lacks cash deposit or bank guarantee is required for customs agent license.

For how long is the license valid?

It is valid for one financial year only.

Can the customs agent license be renewed? If it can what is the process?

Yes it can be renewed. For each financial year, an application should be submitted to the concerning office with the renewal charge of Rs 7000, proof of tax paid and the valid renewed bank guarantee of one year, before the end of the financial year.

Can the validity of the license be more than one year?

Yes it can be. After the payment of renewal charges for three years and submission of valid bank guarantee for three year, the validity for three years can be extended.

What is the provision, if the renewal failed before commencement of the financial year?

Incase of the failure of renewal there is the provision to get renewed after payment of seven thousand additional charges within one year. The license not renewed within that period is cancelled.

Is there any provision to activate the cancelled license?

 It should follow the steps from beginning.

What is the legal position of customs agent under the process of renewal?

 In such circumstances he cannot work as customs agent.

Is there any action beside the punishment to customs agent?

Yes there is. The following actions can be taken:-
• Customs officer can suspend the agent from one month to six months.
• Customs officer can cancel the license, if such suspension occurs third time.

Is there provisions of hearing against the suspension and cancellation of agent’s license?

Yes there is. The opportunity to submit proofs or provide clarification is provided to him before suspension and cancellation of the license.

What is the position of customs agent during suspension?

He is not allowed to act as customs agent during that period.

What is the effect of license cancellation?

The customs agent, whose license is cancelled, cannot get license again.

Is there any provision to apply against the decision of suspension or cancellation?

 Yes there is. The customs agent can apply to the Director General of Customs against the penalty, suspension and cancellation of license.

Is there any time limit to apply to the Director General of the Department of Customs against the decision of penalty suspension or cancellation?

Yes there is. The application should be submitted within thirty five days of such decision.

Within how many days should the Director General give decision on the application?

 The Director General should give his decision within thirty days.

Is there any provision of appeal against the decision of the Director General?

 No. The decision of the Director General is final in this respect.

Can the custom agent nominate his representative in his absence?

There is the provision to nominate one representative. But the qualification of such person should equivalent to that of required to an agent.

What is the process of appointing representative?

The customs agent wishing to appoint the representative should apply to the Chief of Customs Office. The Chief of Customs Office calls both of them and after examining the documents and interrogations he can give permission.

Can the person who gets appointment as representative work in more than one customs point?

 No he cannot.

Can another representative be appointed, in the existence of already appointed one representative in the same customs point?

The representative can be appointed not exceeding another one having the qualification as of the first representative but to appoint such representative Rs Seven thousand fees and Seven lack cash deposit or bank guarantee should be submitted as provisioned for custom agent.

What is the legal position of such representative?

The customs agent who appoints such representative is wholly responsible for the act of such representative.

What are the circumstances of cancellation of license?

Following are such circumstances:-
• In case of submission of false description and documents
• If he has been punished as a criminal by any court.

Who can appoint customs agent?

The importer / exporter, who cannot present himself in customs point to clear goods, can appoint custom agent to work on his behalf.

. What are the provisions of agent to Government Offices, Institutions and Organizations?

 In case of such entities, the office bearer staff designated by the office can clear the goods or perform other necessary work.

What are the provisions, in case of export/ import of any legally registered firm, company, organization or entity?

There is the provision of clearing goods by the officer designated by board member/ partner/ chief executive/ chief administrator of such entities.

What is the process of appointing customs agent?

 The exporter/ importer should fill the form with his / her photos along with the photo of agent. The following documents should be submitted along with form:-
• License of customs agent
• The authentic paper of proof that the agent appointing exporter/ importer is genuine.
• Copy of certificate of Permanent Account Number (PAN).
• In case of firm / company/organized institution/entity the proof of registration 

Where to submit the customs agent appointment form and how it is finalized?

The form should be submitted to the Chief of the Customs Office where the import/ export takes place. The customs chief may ask to submit true copy to examine the authenticity of submitted documents. If everything is authentic and assured that the customs agent can be appointed, he can give his approval on the appointment.

What happens, if some agent is rejected from such appointment?

 If such approval of appointment is rejected, after cancelling of such appointment the exporter/ importer should be informed in written through such agent.

What is the process of re-appointing the same agent in the same customs office?

The following is the process:-
• Those documents which need no renewal are not to be submitted again.
• If the exporter/ importer is natural person, the renewed license of the appointed agent, attested copy of citizenship and permanent account number and its copy should be submitted in the customs office.


Export/Import Smuggling of Goods, False Declaration and Punishment

What is smuggling?

This is the acts of import/export evading duties of dutiable goods through hiding or using wrong ways and in case of non dutiable goods avoiding the process of customs.

What is customs process?

 All type of goods weather dutiable or not, should be declared in the customs. For this purpose the description should be filled in the declaration form. The goods are cleared after examination of goods, the dutiable items are charged duty and others are remarking as non-dutiable in the declaration form. This is called customs process.

What is the punishment for smuggling?

If the smugglings are proved, such goods are forfeited and a fine equal to the amount in controversy of such goods or imprisonment or both punishments is imposed by the Customs Officer.

What is the amount (in Rs.) in controversy of goods and duration of imprisonment?

The amount of fine equal to the amount in controversy of goods and imprisonment are as follows:-
• If the amount in controversy is from 25000 to 100000, the imprisonment is up to two months.
• If the amount in controversy is from one lakh to five lakh, the imprisonment is from two months to six months.
• If the amount in controversy is from five lakhs to twenty five lakh, the imprisonment is from four months to one year.
• If the amount in controversy is from twenty five lakh to fifty lakh, the imprisonment is from eight months to two years
• If the amount in controversy is from fifty lakh to ten million, the imprisonment is from one year up to two years
• If the amount in controversy is more than ten million, the imprisonment is from two years up to three years.

What is the provision of punishment to the driver and owner of vehicles?

 Such means of vehicles used for smuggling is seized. If such act is carried on the consent of the owner he has to face imprisonment up to one year. In case of only the driver is involved the driver gets penalty of Rs. five thousand or one year imprisonment or both.

What is the punishment to promoter or helper of smuggling?

The supporter or promoter of smuggling gets punishment similar to the culprit.

What punishment is given to the person who stores and hides the smuggled goods?

Such goods is confiscated and penalty up to Rs. ten thousand is charged.

What punishment is there, if any importer/ exporter or agent declares the goods properly but in less quantity?

There is provision of releasing goods charging cent percent penalty to the less quantities declared.

What happens, if the declaration is correct but the country of origin differs?

In such cases the penalty is charged 25% equivalent to the duty of the goods and the goods are released.

How the goods are released, if the quantities declared are more than the actual?

The penalty is two hundred percent of the value of more declared goods and quoting the same in declaration form the good are released.

What action is taken, if the name, nature, physical specification, characteristic, measurement, size quality all or some of them differs in declaration?

Such goods are seized and penalty is charged equivalent to the value of the goods.

What happens to the undeclared any goods?

 There is the provision of penalty equivalent to the value of goods and such goods can be seized or after collecting chargeable duty and two hundred percent penalty such goods can be released.

What kind of punishment is there to the person who submits fake document in customs office to make loss in revenue or intends to make revenue loss?

 In such case up to two hundred percent of lost revenue is imposed as fine or imprisonment from six months to one year or both punishments are given. On the charge of making fake government documents the person is sent to concerning office for further action as per prevailing laws.

What action is taken to the owner or agent, if he tries to open the goods in customs warehouse with the intention of pilferage or lift to make loss?

In such cases custom officer may charge penalty up to Rs. five thousands to such person.

What action is taken, if any one lifts or removes any goods without the permission of customs from customs warehouse?

In such case there is the provision of the penalty of equivalent to the value of goods lifted and the imprisonment of up to six months or both punishments.

What is the provision of action to the person who makes duplicate seal, documents, signature or changes or damages them?

There is the provision of penalty up to Rs. five thousands or imprisonment up to one year or both punishments, to such person. For further legal action on making fake government documents the file are send to the concerned authority.

What is the provision of action to the customs staff deputed to warehouse, if he/ she carelessly handle goods and makes loss?

In such case, there is the provision of recovering the value and duty of goods from such staff and penalty up to Rs. five thousands is imposed to the staff

What action is taken to customs staff if he/ she removes the goods or gives order to remove the goods without proper authority to him/ her?

The customs officer may charge penalty up to Rs. five thousand or imprisonment up to two years or both punishments to such customs staff.

What action is taken, if customs finds in post release review that there are differences in revenue due to submission of fake invoice or documents?

 In such case, the custom officer may penalized to the traders by two hundred percent of the value of goods released or imprisonment up to one year or both punishment.

Is there any special authority to customs officer to charge penalty and imprisonment?

Yes there is. Beside the provision of the Customs Act 2064 section 57, if any one acts contrary to the customs Act and Rules the custom officer has the legal right to penalize up to Rs. five thousand.

What action is taken, if any one creates obstacle in the use of the legal authority by the Customs Officer pursuant to the Customs Act or Rules?

In such case, if the person is government employee, penalty up to Rs. five thousand or one year imprisonment or both punishments is imposed. If such person is other, penalty up to Rs. one thousand or imprisonment up to six months or both punishments is imposed.

Do other Acts or Rules attract on punishment beside the Customs Act?

Yes it does. If the activities are punishable according to other prevailing laws, punishments according to such other Acts can be taken as per the provisions of the Customs Act.
16. Informer of Smuggling of Goods and Rewards

What is the provision of rewards to the informer who informs the events of export smuggling/import smuggling?

There is the provision of rewards. Out of the proceeds of auction sale of such smuggling goods, reward is provided after the finalization of such case. 

How much reward is given to the informer of export/ import smuggling?

The following is the percentage of rewards:-
• Informer of export and import smuggling 10%
• If such goods are captured and presented with the person before customs in such case 20%
• If only goods are captured and presented only 10%
• If such goods are gold silver or jewelry 10%

What is the provision of secrecy of informer of export/ import smuggling?

There is the provision of keeping secret the name, surname and detail of an informer except when so asked by body carrying out investigation under law in the course of investigation or by court.

Should such informer be presented at investigation authority or court in the course of investigation?

The informer is not compelled to be presented in the court or investigation authority on only the cause of providing information.

Can the informer get rewards or not, if the goods seized are given to use to the government offices or other institutes?

There is the provision of providing rewards.

How the amount of reward to informants has been provisioned, if the goods are provided to government offices or other institutions?

The office or the government entity make available such amount to the customs office and customs office provides rewards amount to informer and arrester.

What types of papers are required to get reward by informer or the person who captured the goods and person?

For employee the copy of identity card and for others the copy of document which identity him/her and receipt are compulsorily to be kept while providing the rewards.

How the amount of reward is given, if there is more than one informer?

In such cases the amount of reward is distributed equally.

What is auction value?

It is the value determined by specified committee. In such value VAT are not included till auction.

How can the informer give information?

Informer can give information in ways-
• Written
• Verbal

What is the process of giving information by informer?

The process are:-
• Such information or report should be submitted before seizure of goods.
• Such information or report should be given to the Director General or the concerned Customs Officer.

What is the process, if two or more information or reports are received for single action of smuggling?

The information or report received at first gets validity. Other information or reports are kept with remarks.

Can the informer give nick or fake name instead of his own name?

Yes it can be. But such informer immediately submit the duplicate copy of identification (certificate of citizen, identity card, passport, driving license) with nick name to the concerning authority.

What action is taken, if any one attempts to export or import goods through any route other than prescribed route?

The following action is taken:-
• The Customs Officer or the Authorized Officials or competent Government Officials can forbade such person to do so.
• On manhandled or uses of force by such person, the staff should request and convince such person not to do so.
• In case of manhandles and uses of forces by such person continues despite on the request of the customs officials; he/she would get arrestment.
• On effort to arrest if such person uses force or tries to escape or go away and could not arrested at sight, the security person deputed there with the order of the employee can fire in air at first and then open fire aiming to cause minimum loss in the situation of out of normal control.

What action is taken to the person who makes movement by a motor vehicle and does not stops on customs officials request and tries to move?

 If such vehicle tries to escape without examination or escapes, with the order of the Customs Officer the security person can fire on the tires of such vehicle aiming to cause minimum loss.

What details are to be included in informer report?

The following details are to be included:-
A) In case of airline
• Flight no and time
• The name and figure of smuggler and mode of hiding the goods
• The place of hiding inside airplane.
B) In case of cargo
• The air way bill No. of cargo or name of goods , name of owner
• The mode of hiding the goods
• The place where the goods are kept.
LC) In case of land route
• The type and number of means of transport
• Name of goods
• If hidden within any goods, the identification of such goods
• The date, time and place of smuggling.


Asycuda

What is ASYCUDA?

 This is the short form of Automated System of Customs Data management. Under this system the description of export/ import declarations are processed through modern system for customs clearance and customs data are processed. There are different modules that can be used in the system so its usefulness is wide.

How the customs declaration form is filled?

In the customs office where ASYCUDA has been introduced it is filled with the help of computer program and in other customs offices it is filled in hand written process.

How the service receiver use computer in ASYCUDA system?

In ASYCUDA system the employee/ Agent/ Representative compulsorily fill one form and submit it to the information and technical section of the concerned customs office and seeks user name and password for this purpose. Such password holder only can use the ASYCUDA system in computer.

What is the password for service seeker?

 It is MOD B R K.

Can the declaration form already entered be operated or cancelled?

Yes it can be. For this the service seeker must apply to the information and technical section of concerned customs office.

What are the circumstances when the computer registered declaration form can be either cancelled or corrected?

 In the circumstances when there is revenue effect through valuation or classification quantity, it cannot be directly corrected but it is only corrected within compiling the provisions of the Customs Act or Financial Act .Cancellation is done only on prevailing of sufficient reasons.

What action is taken in this system when one declaration entered twice and left one without assessment?

: In such situation the revenue of left entry is also collected then and there.

Is there any provision to those who cannot enter declaration form through ASYCUDA system?

Yes there is. Such agent can use his representative or appoint his employee for this purpose. He can use public terminal services and get print out and sign it and submit to the concerned customs office.

What happens when an agent gives his password to other persons?

 The agent is responsible in the misuse of such password.

To how many persons the password is issued?

In customs office each customs agent and his one representative get password.

What happens when anyone forget password?

The password holder should consult the customs office immediately and get new password

What happens if the user name and password could not function?

New user name and password is provided, if such circumstance came due to the problem in system.

What step is taken to finalize the declaration entered in computer?

 One must go to Action menu and to Local Check, and after Local Validity Check Ok again go to the same menu and click the check there, if it shows ok then only click register. After that go to the SAD Menu and get two copies print out and submit to customs release process.

Is there any Module in practice under ASYCUDA system?

Yes there are. It is selectivity module, Module configuration etc .

What is the function of selectivity Module?

 This Module directs the Examination Channels to the customs examination process to the goods arriving in the customs office for inspection and release.

What is Examination Channels?

The declaration forms registered in computer server are selected from four aspects. Under this, for release through physical examination is on red channel, release after documents examination comes in yellow channel, release of goods to go through post clearance audit falls under blue channel and without applying all these process the release of goods on the basis of documents declared information comes under green channel.

What is the basis of channel direction?

The basis is risk on revenue, trade, goods and other activities. The computer system analyses the declaration forms and divides them and finds the customs examination channels.


Provision Regarding the Baggage for the Passenger on the Personal Goods

366. Can the Nepalese passenger cominig from foreign country deposit or transfer the good brought by them ?

No, they cannot .

What are green and red channels?

The passengers coming from international flights having dutiable goods should follow red channel for examination and those not posing dutiable goods should follow green channel and need no examination. These lanes are called red and green channels.

How to select green channel or red channel?

The passengers in international flight should determine themselves, whether the goods possess by them are dutiable or not as per the law of the country of entry, after that they should decide to pass through red or green channel. If there is confusion or some goods are dutiable and some are not, it is better to select red channel. This protects from legal action against them.

How is it identified the dutiable or not dutiable goods carried from green channel?

The goods coming from green channel are screened and suspected item are examined others are released without examination.

What is the process of red channel?

 The goods coming from red channel are opened, examined and duties are levied according to the rules and released.  

How to know the dutiable or not dutiable items?

The air hostess or stewards distribute form and broachers before landing in the country. Such information can be acquired near immigration desk too. The customs help desk is also available to know dutiable and not dutiable goods.

What are not dutiable items?

The following are not dutiable items:-
A) For the Nepalese passenger coming back from abroad:
• Clothing, bedding and used personal effects.
• Medicine for sick person coming after treatment
• The instruments used by disabled person
• Gold and gold ornament up to fifty gram or silver or silver ornament up to five hundred gram and ornaments with diamond accompanied up to Rs. one lakh.
• Tablet or Laptop or computer Watch, steel camera, video camera, cellular phone, pen drive each one piece.
• Perambulator to carry baby and tricycle one piece each
• One piece profession related used item to professional.
• Foods item up to seven kg.
• One bottle alcoholic drinks up to 1.15 liter.

What happens if any one brings more than the quantity specified as duty-free?

In case of alcohol it is seized, other items are allowed in reasonable condition according to the law.

How much gold and silver can the Nepalese passenger staying more than six month abroad can bring in accompanied?

The Nepalese passenger who stays six months can bring up to 500 gram gold and ornaments.

Can the baggage be brought after owns arrival too?

Yes he/ she can. The permanent resident of Nepal coming from foreign can bring unaccompanied baggage but it should be dispatched either before or after arrival and such bag gages should have been entered in the customs warehouse within three months from the date of arrival.

How much value of goods can the Nepalese passenger returning from foreign get duty privilege whether it is accompanied or unaccompanied baggage?

The Nepalese passenger returning back after living more than six month in foreign can get complete duty privilege up to the following value :-

Returning after living in foreign land for more than six month to one year can enjoy privilege up to the value of Rs. Fifteen thousand and returning after living in foreign more than one year up to the value of Rs. twenty five thousand.

What is the provision for the children?

Among the Nepalese passengers below 16 years can enjoy only 50% percent privilege than that of the adult.

Can Nepalese passenger returning from foreign bring brand new clothes?

 Only the used clothes can be brought without duty. If new clothes are to be brought then the duty should be paid at flat rate (Sam dar) according to the prevailing Financial Act up to the quantity allowed by rules.

How much clothes besides the used the Nepalese returning from foreign country can bring?

 Nepalese coming from foreign country can bring readymade clothes, shoes, cosmetics each15/15 pieces besides used clothes on duty payment at flat rate (Sam dar).

Can the professional equipment used while working in foreign country, or new one of same kind, bring at the time of returning back?

Yes he/ she can bring general type of used equipment such as the B.P measuring machine and stethoscope for doctor, football volleyball, badminton set for sportsman, guitar harmonium, drums for musician on duty free at the limit of one piece each. If such instruments are new for the development of skill he/ she can bring 2/2 pieces each after making payment of duty at flat rate (Sam dar) in accordance to prevailing Financial Act.

How much food stuff can the Nepalese returning from foreign country bring for their own use?

They can bring food stuffs up to 7 kg without duty payment and 10 kg with duty payment at flat rate (Sam dar).

Can the Nepalese person living in foreign country send goods to their relatives in Nepal?

They can send the goods of the value up to US$250 (excluding the restricted and the goods under quantity restriction). Customs office examines the proofs and releases after charging duty at flat rate (Sam dar).

How much cigarette and cigar the person returning from foreign country can bring?

The person returning from foreign country can bring cigarettes up to 200 sticks or cigar 50 sticks after making duty payment as per duty schedule (Sama dar) .If he/ she brings more than this should pay cent percent additional customs duty.

Is duty levied to the belongings of the person who had used such goods while living in foreign country and died while dispatched such goods to his relatives?

No duty is charged on such used house hold goods.

Is customs duty charged to the personal effects of the retired soldiers returning from Indian Army or Police?

If the documents of proof of retirements are submitted, the goods up to the value of Rs. fifty thousand can be brought without duty for one time (excluding vehicles, arms, ammunitions and restricted items).

How the customs duty is imposed on L.C.D or plasma television to be brought by Nepali returned after working in foreign country?

The following flat rate of customs duty in accordance to their stay in foreign country is imposed on L.C.D or plasma television brought by the Nepali. Excise duty and value added tax are not imposed. Size of Television Duration of stay in foreign country and chargeable duty                        Up to six months                                                  Above six months
a) Up to 22 inches                           Rs. 200 per inch                                                      Rs. 150 per inch
b) 23-29 inches                               Rs. 300 per inch                                                      Rs. 250 per inch
c) 30-32 inches                                Rs. 450 per inch                                                      Rs. 400 per inch
d) 33-39 inches                               Rs. 550 per inch                                                      Rs. 500 per inch
e) 40-49 inches                               Rs. 600 per inch                                                      Rs. 550 per inch
f) 50 inches and above it                  Rs. 1250 per inch                                                    Rs. 1200 per inch

Can the crew members bring other goods, beside their used personal effects?

 No they cannot.

What happens, if they bring?

 Such goods are seized.

How much gift items can Nepalese keep with them while going to meet their relatives, friends in foreign country from Nepal?

 They can take out with them the goods Produced in Nepal up to the value of Rs. Fifty five thousands (excluding restricted items) without export duty payment. There is no value limit for the goods if VAT invoice and PAN invoice for VAT free goods, is submitted.

Is customs duty levied in the medicine of the patient returning after treatment from foreign country?

No.

Is duty is charged on the used clothes sent through postal parcel by Nepalese living in foreign country?

 The duty is not levied on the used clothes.

Can the Nepalese passenger returning from foreign bring essential household items besides accompanied or unaccompanied goods under completely duty free or dutiable under flat duty rate (Sam dar)?

In such cases the Custom Officer after inspecting the background of the person, the duration of living in foreign country, number of family members can approve to release the goods, on reasonable ground, after charging flat rate (Sam dar).

Which used items are not dutiable to the foreign passenger coming from international flight on the condition to take back such goods?

The following items can bring without duty:-
• One piece binocular, telescope
• Video camera, steel camera 1/1 pieces
• Tablet or laptop or Portable music system one set and CD tape recorder media to be used in such set ten pieces.
• Clothes, beds and used house hold goods
• Perambulator and tricycle one piece each
• Cycle one
• Watch one
• Cellular mobile one

and upto 50 grams of gold ornaments and 100 grams of silver ornaments
Following equipments for professionals:-
• equipments brought by carpenter one set
• simple machine brought by doctor or Baidhya to work, equipments, medicine, and necessary goods used by such specialist
• musical instruments of singer
• Sports goods of sportsman
• Fishing rode.

Which are the goods to be brought on duty free by the passport holder foreigner passenger?

The following items are duty free to such passenger:-
• Alcoholic drinks one bottle up to 1.15 liter or beer up to 12 can.
• Cigarette 200 sticks, cigar up to 50 sticks, tobacco up to 20 grams
• Steel camera film15 pieces and movie camera film12 pieces.
• Medicine up to Rs. ten thousand.( excluding band in Nepal)
• Tin pack food stuff up to Rs. Five thousands.
• Fresh fruits up to Rs. two thousand.

How much value of goods, available in Nepalese market, can the foreign passenger take or send in foreign country without license?

The goods covered by official proof of foreign currency exchange can be sent or taken without license excluding prohibited items.

How much value of goods with VAT invoice or PAN invoice for VAT free goods can be taken out or sent by the foreign passenger?

There is no need of VAT or PAN invoice to take out or sent the goods up to Rs. fifty thousands. For the goods more than that amount the passenger needs VAT or PAN invoice but needs not the export license (excluding prohibited items).