Smuggling up across Nepal-India border

This is attributed to absence of uniform customs evaluation system

BIRGUNJ (PARSA), DECEMBER 11 : Smuggling continues to rise due to the lack of a uniform tax system across the porous Nepal- India border. Although both countries are sovereign with distinct systems of governance, stakeholders in the economic sector argue that implementing a harmonized tax structure is necessary to curb smuggling along the open border.

Industrialists and businessmen in Birgunj have called for the alignment of India’s Goods and Services Tax (GST) with Nepal's customs assessment system. They believe such a measure would help control smuggling activities facilitated by the open border.

The demand arises amidst significant disparities between India’s GST and Nepal’s customs duties, which have created loopholes for illegal trade. In this context, the Armed Police Force (APF) in Parsa seized goods worth Rs. 151.8 million during the first four months of the current fiscal year. The confiscated items included clothing, electronics, hardware, motor parts, and groceries. Additionally, goods valued at Rs. 26.43 million, which lacked proper invoices, were also seized during the same period.

Hari Gautam, Senior Vice-President of the Birgunj Chamber of Commerce and Industry, emphasized the challenges posed by these discrepancies. "The lack of uniformity between GST and Nepal’s customs duties has made it difficult to control illegal trade," he said.

He highlighted the broader impact of these issues, stating, "Currently, an illegal economy is thriving due to the significant price differences between goods in Nepal and India, creating an environment conducive to smuggling."

Gautam further argued that enforcing a uniform system with reduced customs duties could help curb illegal trade and minimize the informal economy.