Kathmandu, May 5. To draw the attention to imposition of maximum customs tariff on the imported paints by the customs department, Nepal Paint Manufacturer Association has held a Press Meet. Given the current liquidity crisis in Nepal’s banking sector and the decline in foreign exchange reserves, NPM convened the conference assessing the possibility of the government imposing a “countervailing duty” on the import of ready-made paints in the coming days.
The association has foregrounded that Nepalese industries are being imposed the same customs under the code for ready-made paints on importing raw materials required for Paint.
NPMA has argued that the tax imposed by the government is not justifiable on the import of Acrylic Polymar(Emulsion). According to the association, Emulsion is a raw material required for all water-based paints initially classified under the HSN code 39.06. Still, under the letter issued on 2076/03/08, the department of Customs has instructed its customs offices to specify Emulsion under the HSN code 32.09, which is the code for the finished goods of Paints and varnishes.
Likewise, the association has said that HSN 39.06 has an import duty of only 10% and benefits of SAFTA; however, HSN 32.09 has a duty of 30%, and SAFTA benefits do not apply to finished goods.
Subsequently, the cabinet reduced the customs to 20% percent under code 32.09, but customs on the essential material for paint increased. While in the neighbouring countries of India like Sri Lanka and Bangladesh Acrylic Polymer is classified under HSN 39.06, and customs Duty varies from 0-10% said the entrepreneurs attending the meet.
The association has also demanded the amendment of the HSN code for Titanium Dioxide from 28.23.00.00 to 32.06.11.00. The association has said that the Financial Act 2077/78 has reduced the import duty from 15% to 5%, but due to erroneously mentioning the ref code 28.23.00.00, the paint industries are still obliged to pay a 15% duty.
The Govt has a general policy of fixing the import duty of Raw Materials, which is one step down compared to the Finished Goods. However, this is not followed in some of the Raw Materials and Packaging Materials like White Cement, Metal Container with a carton, Heat Transfer Lable, HDPE Container, Drum(Cylindrical).
The paint industries established in Nepal with a history of four decades, have become self-sufficient in terms of quality and production capacity. More than 50 multinational to small scale and domestic paint industries are spread in this region from East Mechi to West Mahakali. They support initiating industries (Tin containers, Plastic buckets and containers, Cardboard boxes, Poly woven bags, Tape and printed material). The paint industry has contributed to the development, employment, and revenue (income tax, excise duty, customs duty, VAT). Hence, the state’s policy to impose such unjust customs duties on these industries is overbearing and dissuading; the association has collectively put forth its view.
