Changes in DRP may raise customs duty evasion

KATHMANDU, MAR 12: 

The Department of Customs may face a problem regarding the import of under-invoiced goods from customs points after the government made some procedural changes in Duty Refund Procedural (DRP) on March 1.

Traders may declare lower prices at the customs points as compared to the local prices of goods, said spokesperson at the Finance Ministry Rajan Khanal, adding that the chances of evading customs duty remain high in such a situation. 

“Generally, the valuation of goods imported under the previous proceeding of DRP was considered more reliable due to the rebate provision.” Now, traders are free to declare the value of goods at the customs points and chances of under valuation cannot be avoided, he informed. 

“The new system has added challenges for the department,” said director at the department Shyam Dahal, adding that the department has to make its database more effective to end the trend of importing under-invoiced goods. 

“Now, the department should strengthen its review capacity to control under-valuation,” he said. The role of Post Clearance Audit (PCA) office should be expanded to control under-valuation, according to him. PCA is a method of controlling economic operators through the examination of their accounts and records.

The existing Customs Act of Nepal states that the PCA office can audit firms for four years after the date of clearance of goods, if suspicious transactions are found.

Source: THT