India pays Rs 1.67b to Nepal under DRP

KATHMANDU, Jan 7:

India has paid Rs 1.67 billion to Nepal under the Duty Refund Procedure (DRP) -- a refunding system of excise duty levied by the southern neighbor on Nepal-bound imports.

In line with the bilateral agreement signed during inter-governmental Committee (IGC) meeting held in New Delhi two years ago, India had scrapped DRP from March 2012.

“Of the total outstanding dues of Rs 4.07 billion under DRP, India has paid Rs 1.67 billion,” Surya Prasad Acharya, director general of Department of Customs (DoC), told Republica on Monday.

Acharya also said process was underway to produce additional documents that substantiate Nepal´s claim for refunding under the DRP.

As per the DRP system, Nepali traders, who paid excise duty to the Indian government for Nepal-bound imports, are entitled duty refund by the Nepal government. In return, Nepal government was supposed to claim the refunded amount form the Indian government.

Until 1996, when the historical Nepal-India trade treaty was signed, Nepal traders had to go through complex process of claiming excise duty charged by the Indian government on imports from India.

Nepal levies import duty, VAT and excises duty on imports at customs points.Generally excises duty is levied on goods like liquors, tobacco, match sticks and cigarettes that are regarded as threats to human health.

However, the net of excise duty has been expanded by different governments so as to maintain revenue after the decreasing customs revenue with the implementation of WTO provisions that envisage lowering customs duty.

Nepali officials had held discussion with Indian officials during the recently concluded IGC meeting in Kathmandu for speeding up the process to settle the outstanding DRP refund. During the meeting, the Indian side had assured Nepali officials that they would accelerate the process of settling outstanding DRP.

India had agreed in principle to scrap DRP when the revised Nepal-India Trade Treaty was signed in 2009.

However, DRP waiver was not implemented in time for the next two years. During the commerce secretary-level IGC meeting in December 2011, India had again reiterated its pledge to eliminate the DRP.

“Claims for DRP refund were piling up until March 2012 in the lack of necessary documents,” said Acharya.

    
    

Source: Republica