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INVOICING ANOMALY

 

There is no benefit or advantage, a local supplier can possibly derive by quoting the name of foreign buyer in the invoices of the products meant for delivery to export promotion house.

Export promotion house, (defined in Industrial Enterprise Act of Nepal as a company or firm established as prescribed with the objective of gathering the products of the industries established in the Kingdom of Nepal and exporting them to foreign countries) secures export orders, buys, procures, and gathers the exportable products from the local manufacturers and arranges for the exports.

 It is to be understood that in following the aforementioned process, local manufactures and sellers are not, ipso facto, exporting the products. They are simply selling the products to export promotion house. It is the export promotion house who eventually exports the product and gets the recognition as exporter.

It is not therefore uncommon to notice in the Nepal market, the bills and invoices of local manufactures and sellers in the name of foreign buyers, while selling the products to Export Trading House in Nepal.

For instance:

Export promotion house collects products from XYZ Garment & Exporters, a local manufacturer, to export to foreign buyer “Mr. A” in Canada. XYZ raises invoices in the name of Mr. A, Canada as if it is exporting to Mr. A and delivers the invoices and products to export promotion house.

 

Impacts

Bills and invoices are the only documents giving legal title / ownership of the goods to the person, entity in whose name bills and invoices are. The moment legal title/ ownership of the goods is transferred, the risk and rewards associated with the goods also passes on to the buyer.

Similarly in above example, risk and rewards has not passed on to the export promotion house, because of the discrepant invoices. As a result, any loss, theft, damages of the product during the possession of export trading house may have to be personally borne by the local manufacturer and the export trading house has a reason to deny the claim.

It is also difficult to justify the payment process, as the invoice is in the name of overseas importer “Mr. A, a Canadian” whereas the payment comes from export promotion house in Nepal.

Export promotion house will also be deprived off the VAT refund. Since the invoices are not in the name of Export promotion house, Income Tax Department will have a reason to reject the VAT refund process.

Likewise, Income Tax Department will also not allow the purchases of Export promotion house as a deductible expenditure, since the purchase bills and invoices are not in the name of export promotion house.

Insurance claim of export trading house for any loss, theft or damage of the product may also be denied since the ownership of the product does not lies with the export trading house

 

 

SPECIAL PERMISSION WRITTEN ITEMS

The following is a list of items that require special written permission from the government departments before export.

Department of Archaeology :

Any bronze, brass, copper or silver statue, any thanka paintings, illustrated manuscripts, wooden masks or woodcarvings and other carved goods.

Department of Veterinary Science:

The meat, skin or flesh (dried or otherwise) of wild or domestic animals.

Department of National Parks & Wildlife:

Skulls, horns, tails, hooves or other body parts of domestic animals.

Quarantine Department:

Plants, flowers.

Mine Department:

Stones / rocks

Department of Forest:

Incense powder, rudrakshi beads.

Plant Resource Department:

Ayurvedic/herbal oil/marc/extracts/crude.

Procedure for Exporting Commercial Goods

The registered Firm or Company is eligible to import the goods into Nepal, Tribhuvan international Airport (TIA), Kathmandu is the only gateway for traffic by air in Nepal except for prohibited and quantitatively restricted item. No license is required for imports. For the import from India, the payment is made normally in India currency but for procurement of some industrial raw material and machinery, payment in hard currency can also be made as per notification of Nepal Rastra Bank for the product specified. The firm or company to follow up the procedure of import is required to prepare and present the following documents for import into Nepal by Air for custom clearance.

1.     Nepal custom import declaration form.

2.     Latter of authority for clearing Agents to act on behalf of the importer.

3.     Air way bill.

4.     Perform Invoice.

5.     Packing list.

6.     Certificate of origin (this is required only for tariff concession for goods originating in Tibet                 

        Autonomous Region of People’s Republic of China, SAPTA member countries and MFN                     

        Rate of countries having bilateral agreements with Nepal).

7.     Certificate of Insurance Policy.

8.     Foreign Exchange Declaration Form of Nepal Rastra Bank.

9.     Certified copy of L/C.

10.   Company Registration Certificate.

11.   VAT/PAN registration certificate.

12.   Permission from Plant Quarantine Section of Department of Agriculture for import of plants and plants products

        in cluding fruits leaves & seeds.

13.   Import license if applicable.

 

All the above documents except 3 and additional following documents are required to import for third country by sea.

 

1.     Bill of lading.

2.     Custom transit declaration.

3.     Transit declaration invoice for good it transit in India/Bangladesh for import from third country. 

 

 

CONDITION FOR ACCEPTING GOODS

The Following are the conditions for accepting goods for Shipping: It is imperative that you provide us with a detailed information on your intended shipment so as to render you our best possible services.

 

1.     When clearing personal items, the customers must attend the customs office with our staff during the clearing process.

2.     A copy of the customer`s passport and /or citizenship papers must be kept with the shipping documents.

3.     The customers and/or their suppliers must fill up a declaration form when goods are being delivered.

4.     When we acts as shipper, we must do the packing of the all the goods in our warehouse.

5.     When goods are delivered, and a Declaration form has been filled out, a thorough check must be carried out to verify whether they are correctly matched and are complete.

6.     An information form must be completed for each customer`s shipment.

7.     Please notify us beforehand if you have any fragile or anything which needs special packing.

8.     GAC will only pick up goods from the supplier`s shop, factory or warehouse. Deliveries from outside addresses will not be accepted.

9.     We will only accept goods that are accompanied by a supplier`s bill with supplier`s name, company name, address, customer`s name and duly stamped by the supplier.

10. If a supplier does not have his own bill then whoever delivers the goods must fill in the declaration form & countersign accordingly.