Customs chiefs oppose MoF idea to levy goods worth Rs 1,000 and above

KATHMANDU, Nov 22: 

Chiefs of major customs offices on Monday criticized the Ministry of Finance (MoF) for its decision to raise the minimum import threshold for compulsory filling up of customs declaration form from Rs 100 to Rs 1,000, saying it will seriously impact customs revenue collections.

“Mechi Customs alone will lose at least Rs 200 million in revenue every month if the new provision is enforced,” said Laxmi Poudel, chief of Mechi Customs Office.  

Chief of Biratnagar, Birgunj, Tatopani, Bhairahawa and Dhangadi customs, among others, echoed with Poudel. Together, they also demanded the government to roll back the decision.

MoF on May 22 had made filling up of customs declaration form compulsory for entry of consignments worth Rs 100 and above through the porous southern border. While such a measure was enforced to plug revenue leakage, it drew criticism from businessmen and common people for whom petty purchases from across the border has been a way of life.

Bowing under the pressure, MoF on November 15 decided to raise the limit to Rs 1,000. The decision has not been enforced so far as the ministry has not issued formal notification to the Department of Customs (DoC).

Customs chiefs said if the MoF enforced the new decision, the government will face a huge revenue loss as freeing the people from the need to disclose goods up to Rs 1,000 will exclude a substantial volume of imports from the purview of customs duty.

“Rs 1,000 on one cross-border transaction may appear too small an amount. But what we must not forget is there are many people who travel across the border multiple times eventually building a huge stock of goods on this side of the border,” said Poudel. Binod Kunwar, chief of Biratnagar customs, agreed with Poudel. 

Referring to the heat they faced from public when the government initially made customs declaration mandatory for import of goods worth Rs 100 and above, customs chiefs said they had successfully dealt with the pressure so far. “Thanks to this May 22 decision, over 53,000 people who always enjoyed tax-free imports to fulfill their consumption, have come in the tax net. They paid Rs 10 million in customs duty every month,” said Kunwar.

Lawanya Dhakal, chief of Birgunj Customs Office, demanded that the government must continue the existing provision of Rs 100 threshold for abbreviated customs as it has positive impact on customs revenue collection with a large number of traders brought under the tax net.

Responding to the senior customs officials´ concerns, Minister of State for Finance Hari Khewa Limbu said he would ask the government to review the decision. “The government is serious about the concerns expressed by senior customs officials. Apparently, the decision was taken without consulting Customs Department. We can always review it,” said Limbu.

Customs officials who were in the capital for a five-day training on Post Clearance Audit (PCA), which kicked off on Monday, complained about frequent breakdown of automated networking system at customs offices.

Source: Republica