Cash incentive process simplified

KATHMANDU, MAR 23:

The High Level Committee formed to simplify the cash incentive facility has finally decided to allow a minimum one per cent cash incentive for exporters. However, exporters’ associations have said that the government should have quoted at least two per cent cash incentive.

“We have finalised two percent as the maximum cash incentive percentage based on the value addition of the product and minimum one percent depending on the product,” said coordinator of the committee and vice chairman of National Planning Commission Deependra Bahadur Kshetry.

Kshetry also said that the new cash incentive process is more simplified and is almost like a one-window system. “The new process is hassle-free,” he said, adding that from now onwards after the products are verified by the Ministry of Industry, exporters will directly receive the recommendation for the cash incentive from the central bank and can later collect it from their respective banks.

He also assured that exporters will not have to repeat the value addition verification process once they have qualified for the facility.

Meanwhile, president of Garment Association – Nepal (GAN) Uday Raj Pandey expressed satisfaction with the decision. However, he said that the government should have allowed two percent as the minimum cash incentive percentage.

“The committee’s decision is quite appreciable as it has tried to make the cash incentive process accessible to almost all exportable products,” said Pandey. “Along with the simplified cash incentive process, the government should also provide sufficient budget for the process,” he said.

Talking about the cash incentive facility for manufacturers, he said there are a number of technical complications that might create problems if the cash incentive is also granted to manufacturers.

However, Pandey said that if the government allows the facility for exporters to India along with formal banking channels, it might create a great relief to such exporters. Currently, the committee has allowed cash incentive to third country exporters.

According to Ministry of Commerce and Supplies, there will be no cash incentive facility for exporters to India as its documentation system is not reliable. It also stated that unless there is some reliable system of export documentation, the ministry will not be able to give cash incentive for exports to India. Due to growing complications and disagreements between government and industrialists, the procedure was withheld till further simplification.

Source: THT