Govt ups customs duty on silver, betel nuts .

The government has increased custom duty on imports of silver and betel nuts to check rapid depletion of foreign currency by curbing their illegal re-export to India.

As per the new ordinance issued by the President´s office on Sunday evening, the custom duty on imports of silver has been increased to Rs 16 per 10 grams from Rs 3 per 10 grams. The ordinance has also continued an increased customs rates on imports of gold that the government had enforced two months ago.


The ordinance issued two months ago had become ineffective after the parliament failed to endorse it before its 60-day maturity period. The ordinance had raised customs on gold imports to Rs 470 per 10 grams from Rs 130 per 10 grams.

The government was compelled to raise the customs duty after the total imports recorded an alarming surge to Rs 37.53 billion during the first nine months of the current fiscal year, fueling the balance of payment deficit to a record Rs 20 billion. Gold imports during the same period last year was worth Rs 4.27 billion.

Studies have showed that most of the gold imported to Nepal was smuggled to India, as the huge duty difference between Nepal and India had produced a profit of over Rs 200 per ten grams. Similar is the case for imports of silver, as the total silver imports increased by 136 percent to Rs 2.5 billion from Rs 1.05 billion recorded in the same period last year.

According to government figures, the total silver import was 71.3 tons during the period.

Like in the gold, the huge custom duty difference in silver was triggering illegal export of the precious metal to the southern neighbor, said an official of the Ministry of Finance.

The new ordinance has also raised the customs duty on imports of betel nuts, after the government sensed an unnatural rise in its imports.

According to NRB statistics, Nepal imported betel nuts worth Rs 2.13 billion by the end of the third quarter of the current fiscal year, up from imports worth Rs 1.77 billion during the same period last year. Nepal mainly imports betel nuts from Malaysia and Thailand and pay in convertible currency.

As per the newly promulgated ordinance, the customs rate on imports of betel nuts has been raised to 25 percent from 15 percent. Since 13 percent Value Added Tax is also applicable, the total effective rate will come to around 38 percent, which in fact is more than 36.1 percent that India imposes on betel nuts imports, said the official.

Source :- .myrepublica.com