Budgetary provision yet to be implemented

By Gopal Devkota

BIRGUNJ, July 22 - The budgetary provision to issue pass books to exporters for the purpose of duty draw back from the customs points is yet to be implemented albeit over two weeks have passed since the budget was presented.

Finance Minister Dr Ram Sharan Mahat in his budget speech for the current fiscal year had announced to issue pass books to exporters for the purpose of easy settlement of the duty paid by exporters at the time of importing raw materials for export purposes.

Such duty debited (entered as paid) in the pass book during imports would be credited (entered as given) at the time of export of the finished products. The provision was introduced to improve the operation modality of the existing duty refund system under a one-window policy. However, the pass books facility would be availed only by those who draw a Letter of Credit for carrying out foreign trade.

"The pass books are yet to arrive," said Dikardev Bhatta, official at the Birgunj customs office. He informed that the customs office so far has been releasing imported raw materials only after exporters submitted deposits equivalent in value to the duty accrued.

He also said, "Since raw materials from third countries are yet to arrive, goods can be released by accepting collateral. Once raw materials from third countries begin flowing in, there could be problems."

"The pass books are expected to arrive within a week," he said.

So far the Birgunj Customs Office has arranged to release goods on the basis of the deposits by exporters, which would be returned once the pass books arrive. The accrued duties would then be entered in the pass books, informed the official.

Exporters in Birgunj are vexed over the government’s laxity in implementing the budgetary provision. They said that the deposit system is very costly since a lot of their capital is locked up.

"We had met the Finance Secretary and the Director General of the Customs Department immediately after the budget announcement urging them to implement the budgetary provisions from July 16. However, they are yet to fulfil their responsibilities," said Satya Narayan Agrawal, president of the Birgunj Chambers of Commerce and Industry (BCCI). "If implementation is not cared, then a lot of announcements can be made in the name of promoting business."

Similarly, Birendra Kumar Shanghai, vice president of BCCI, said that the government has mostly limited its budgetary announcements in words. "If the budgetary provisions announced in the budget are not meant for implementation, then what is the use of budget ?"

The pass book system was scheduled to be introduced from July 16. Exporters were assured that the system would reduce the hassles they had to face previously. Exporters in the past needed to deposit bank guarantees for importing raw materials meant for export purposes. However, the government two years back revoked the bank guarantee system and introduced the system of paying duties in cash.

Though the budgetary provisions of the past two fiscal years contained allowed duty to be refunded within sixty days of import of raw materials, the government could not clear the debts due to the lack of funds.

Even as of today, the government is yet to settle the duties paid by many exporters. Under pressure of the exporters for settling the duties paid earlier, the government in the latest budget announced to settle the past due by issuing 5 per cent debentures having 5-years maturity period.

Registration of 2,000 industries annulled

BHADRAPUR, July 22 (PR) - District Cottage and Small Industries Office, Jhapa has cancelled the registration of over 2,000 small and medium industries registered with the office as they did not get their registration renewed.

According to Laxmi Prasad Uprety, chief of the Cottage and Small Industries Office, Jhapa, out of 4,500 total registered industries, most of the registration cancelled industries are rice mills, furniture industries, tea packaging, service industries and some of them are cottage industries.

Registraton of those industries was invalidated in some cases for their closure and for not getting their registration renewed, says Uprety.

The reasons behind the closure of those industries are attributed to misuse of loan taken from banks, investments made without doing proper market study and incompetence to vie with Indian products.

"Misuse of loans, lack of proper business plan and incompetency are the major causes of the closure of the local industries," says Uprety.

However, industrialists are not ready to accept it. They say the government’s unclear policies on the cottage and small industries are responsible for their closure. Of the registration cancelled industries, 15 have applied for renewal.

Krishna Dahal of Manjari Tea Packaging, which is closed now, says that the government’s policy is responsible for the closure of such industries, while some entrepreneurs say that small industries are closed due to lack of fund and bad debts.

Though the registration of small and cottage industries are being nullified, the process of registering new industries is also on the rise. During the last fiscal year alone, a total of 456 small and cottage industries were registered with the office, says the office source.

Revenue flow impressive

MAHOTTARI, July 22 (PR) - Revenue collection at Bhittamode Customs Office in the last three months of the fiscal year 2000/2001 stood at almost double than the targeted collection.

The collection of the last three months comes as a surprise since only a total of Rs 21.9 million was collected in revenue in the first nine months of the last fiscal year.

The 90-month figures represented just 77 per cent of the targeted revenue collection for the period. The targeted collection for the first nine months was Rs 28.57 million.

The surge in revenue collection in the last three months of the last fiscal year was as a result of the army mobilization at customs points, officials informed.

A total of Rs 17.6 million was collected against the target of Rs 8.93 million for the last three months.

Despite the excellent collection in the three-month period, Royal Nepal Army officials said that revenue collection could have been more had the soldiers been provided with proper facilities.

Similarly, Inland Revenue Office, Tulsipur collected Rs 77.75 million in revenue in the fiscal year 2000/01, our correspondent from Dang reported. The last fiscal year’s collection is 41 per cent higher than that collected in the previous fiscal year.

However, revenue collection from Mechi Customs Office also was below expectations. The collections in the fiscal year 2000/01 stood at Rs 642 million, which is Rs 73 million less than the targeted collection of Rs 715 million.

Out of the total collection, Rs 331.39 million was in the form of customs duty, Rs 261.9 million was in the form of Value Added Tax and Rs 45.2 million was in the form of Local Development Tax, among others.

The last fiscal year’s collection from the Mechi Customs Office was Rs 44.24 million more than the collection of the previous fiscal year.