Customs Duty Synopsis

Synopsis of Customs Duty Act and Regulations

Introduction
Customs Act, 2064 and Customs Rules, 2064
Definition (Sec 2)
• “Duty Free Shop” means a shop permitted by the Government of Nepal to sell
any goods imported against the bank guarantee facility to any persons who are
entitled to enjoy diplomatic privileges or customs facilities or to the concerned
air companies for international flight catering or for sale at any duty free shop of
such flight.
• "Transaction Value" means the total amount to be set by adding freight, insurance
and other related costs incurred or incurable in the transportation of goods
imported by an importer up to the border of Nepal to the price actually paid
or payable, directly or indirectly, by the importer to the seller of such imported
goods.
• "Diplomatic Facility" means such facility or privilege as to allow the exportation
or importation of any goods keeping only books of record, without examining
such goods and collecting duty.
• "Duty Facility" means such facility as to allow the exportation or importation of
any goods keeping only books of record, without collecting duty, whether or not
examining such goods.
• "Bank Guarantee Facility" means a facility accorded to any exporter or importer
to export or import any goods on the basis of bank guarantee.
• "Bonded Warehouse" means a warehouse licensed by the Department to import
and hold, against the bank guarantee facility, such raw materials or subsidies
manufacture goods to be exported to foreign countries or to be sold domestically
at convertible foreign currencies or such goods as to be sold at a duty free shop.
• "Demurrage" means the charge payable to the Government of Nepal by the
exporter or importer of goods if such exporter or importer fails to take delivery of
such goods stored at the customs godown run by the Customs Office within the
prescribed time limit.
• “Third Country” means foreign countries other than India.
Application and Collection of Customs (Sec 5 and 6)

• Customs duty shall be chargeable on all goods to be exported or imported except
those goods which enjoy customs duty exemption.
• If any person re-imports any goods which have been manufactured or finished in
Nepal and exported, such goods shall be subject to such duty as is chargeable on
the importation of the goods of similar kind or to the same value, which have been
manufactured or finished in a foreign country.
• No customs duty shall be charged on the goods which have been returned back
as follows:
With Amendments by Finance Act, 2076 487
(a) Having been exported through parcel by post but could not be delivered to the
concerned person and thus returned back, or
(b) Having been returned back because the concerned person has refused to take
delivery after clearance made by the Customs Office or after having arrived
abroad, or
(c) Having been returned back because of being unable to meet standard quality
due to an accident or natural calamity.
Procedure for sending goods from one part of Nepal to another part of Nepal
through foreign territory (Rule 4)
• In case of sending Goods from one part of Nepal to another part of Nepal through
foreign territory, the owner of goods should submit declaration form containing
full particulars to the concerned Customs office. Such declaration form should
also clearly specify the Customs office from which the goods re-enter into Nepal.
• In case a declaration form is received, the Chief of the Customs Office shall
not permit the movement of such goods through foreign territory if cheaper or
more convenient means of transport are available for carrying them through the
territory of Nepal itself or that it is advisable to send such goods through the
territory of Nepal itself from the viewpoint of the Customs administration also.
• In case a declaration form is received, the Chief of the Customs Office shall permit
the movement of such goods through foreign territory by keeping record of the
duty or Customs duty on deposit, specifying such goods, affixing Customs seal,
recording the transit time on the declaration and submitting the same declaration
to the owners of the goods, if he is satisfied that cheaper or more convenient
means of transport are not available for carrying them through the territory of
Nepal itself.
• The Importing Customs office, receiving the declaration form of the Customs office
authorizing to export goods and the goods declared in the declaration form and
transport document and found the goods as per the description in the declaration
form should allow the import of such goods without charging Customs duty by
noting in the declaration form. Nevertheless, if the declaration form as issued
by the Customs office allowing export is not presented to the customs office, the
importing customs office should allow the import by depositing the customs duty
equivalent.
• Upon the receipt of the information about import, the export authorizing Customs
office may allow the refund of the Customs duty or reconciled the record, if the
circumstances warranted such action. Provided that, in case the goods permitted
for the import of which has been granted are found to have been partially
imported, such amount of the Customs duty as is due on the goods which are not
imported shall be deducted from the amount of the deposit. In case the goods are
released keeping duty on record, such amount shall be collected from the owner
of the goods within seven days
488 The Purple Book of Tax

Procedure for sending Goods from one part of foreign country to another
part of same foreign country through Nepalese territory (Rule 5)
• In case of sending Goods from one part of foreign country to another part of
foreign country through Nepalese territory, the owner of goods should submit
an application in the Department of Customs specifying the reasons for using
Nepalese territory, export and import Customs point and description of particulars
of goods.
• In case the application is received, the Department of Customs, after the scrutiny
of the application, shall permit the movement of such goods through Nepalese
territory if the Department is satisfied. The Department may seek recommendation
letter from the concerned Embassy or Diplomatic office located in Nepal, before
granting such permission.
• In case a declaration form is received, the Customs Office, after certifying the
description of goods with the seal of the office, shall permit the movement of such
goods from one part of foreign territory to another part of foreign territory through
Nepalese territory as per the decision of the Department inserting condition to
reach in the specified place of exit within seven days in the declaration form and
submitting such declaration form to the owner of the goods.
• After receiving the declaration form, the import allowing Customs office shall
release any deposit of Customs duty in case such duty is deposited. Provided that
in case the goods permitted for the import of which has been granted are found
to have been partially exported such amount of the Customs duty as is due on the
goods which are not exported shall be deducted from the amount of the deposit.
In case the goods are permitted without keeping duty on deposit, the duty shall
be collected from the owner of the goods.
Procedure for sending Goods from one part of foreign country to another
part of another foreign country through Nepalese territory (Rule 6)
• In case of sending goods from one foreign country to another foreign country
through Nepalese territory, the owner of goods should submit goods and the four
copies of application form prescribed by the Department and the declaration form
in the related Customs office.
• On the scrutiny of the declaration form and prescribed form is found to be not
containing the banned goods, the Customs Office shall permit the movement of such
goods within a period up to fifteen days transit period through Nepalese territory
to the foreign country by charging service fee as determined by the Government
of Nepal. The container with the goods should be sealed, and the forms should be
certified. One copy of the certified form should be handed over to the owner of goods,
one copy should be kept for office record and two copies of the forms should be
sent to the exporting Customs point. For sending goods from one foreign country to
another foreign country through Nepalese territory, sealed container should be used.
• In case the goods are not exported using the transit of Nepal to another foreign
country within the time period, the owner of goods should apply in the Department
for the extension of the time period stating the reason for the delay. Upon receiving

the application and if the reason is found satisfactory, the Department may extend
the time period.
• In case such imported goods are not exported within the prescribed time period
and sold or used in Nepal, the owner of goods should pay the due Customs duty
as well as additional hundred percent Customs duty.
Export or Import of Goods for Repair (Rule 7)

• In case it becomes necessary to send any goods to a foreign country from Nepal
for the purpose of repair or to bring such goods into Nepal from abroad after
repair thereof, full particulars regarding the number, and size and specification
of such goods, as far as possible, shall be filled up in the declaration form and
submitted to the Customs officer.
• Customs officer may allow passage for such goods, after receiving guaranty of
airlines operator without any cash deposit for airplane, helicopter and engines
thereof, and after receiving deposits equivalent to 0.5 percent of the value of goods
for spare parts of airplane and helicopter and 5 percent of the value for the other
goods.
• Goods exported to foreign country for repair shall have to be brought back within
three months and Customs duty is chargeable on the expenses involved in such
repair or on the price of the spare parts which are replaced. The chargeable Customs
duty will be deducted from the amount of the Customs deposit furnished and the
balance of the deposit will be refunded.
• In case airline company registered to operate airlines have to export engines of
airplane or helicopter for repair and during the period of repair if the airway
company has to import engine on rent from the foreign country, the company
may import engine on bank guarantee equivalent to Customs duty in the Customs
office and such import should be for maximum period of six months. If the engine
is exported within the period, the bank guarantee will be released. If the engine
is not exported within the period, the Customs duty should be charged treating
engine as fresh import.
• In case time limit prescribed for bringing back such goods after repair is inadequate,
an application accompanied with documentary evidence of such inadequacy shall
be submitted to the Customs officer. The Customs officer may, if he so deems
appropriate, extend the time limit by a period not exceeding three months. In
case the additional time limit is inadequate, the Customs officer should write to
the Director General of the Department of Customs with the reasons and in case
the Director General approves the extension of the time limit, the Customs officer
should extend the time accordingly.
• The goods exported for repair are not brought back within the time limit prescribed
(approved) but brought back after the lapse of time limit, the deposited amount
shall be seized and such goods shall be treated as fresh import and Customs duty
shall be chargeable accordingly.
• In case it becomes necessary to bring any goods from a foreign country to Nepal
for the purpose of repair or to send back such goods from Nepal to abroad after

repair thereof, full particulars regarding the number, specification and size of such
goods shall be filled up in the declaration form and submitted to the Customs
officer.
• In case any declaration form is received, Customs officer may allow passage for
such goods, after receiving deposits equivalent to the chargeable Customs duty
and noting the time limit of six months for the export of such goods.
• The goods imported for repair is returned within six months’ time limit and the
documentary evidence is presented for the payment of repair, the Customs duty
deposited at the import time shall be refunded. In case goods are not returned or
the specification of the goods did not match with the goods that is presented for
export or documentary evidence for the payment is not presented, such goods
and the deposited amount at the time of importation shall be seized.
• On the recommendation of the Ministry of Foreign Affairs, the diplomatic mission
may export to repair goods and import after repair without deposit and on record.
Re-export or Re-import of exported or imported goods (Rule 8)

• The purpose for which the goods have been imported, did not achieve the purpose
or found to be sub-standard quality upon the laboratory test the chief of Customs
office may release duty free such goods for re -export within a period of ninety
days from the date of import or from the date of arrival at the Customs office on
the condition that the similar goods are imported as replacement or the remittance
of foreign exchange in Nepal in case payment in foreign exchange is already made
on the import of such goods.
• If the goods have been re-exported, and the goods for replacement have not been
imported or the foreign exchange paid for the goods have not been remitted within
six months from the date of re-export of goods, the concerned Customs officer
should write to the concerned office to take action in accordance with prevailing
law of land.
• In case the goods have been received as replacement, the goods to be re-exported
shall not attract the Customs duty or if the Customs duty was paid before, such
Customs duty shall be refunded. In case the goods is re-exported after the lapse of
the time limit, the Customs duty paid before shall not be refunded.
• In case it becomes necessary to export or import any goods for the purpose of sale
or display at any seasonal market, or at any fair or exhibition inside or outside
of Nepal the owner thereof shall indicate in the declaration form the purpose of
such export or import and produce such goods at the Customs office. A deposit
equivalent to the amount of the Customs duty due on the import or export of
goods shall be collected.
• In case of goods exported or imported after sale at a seasonal market, fair or
exhibition, the Customs office shall forthwith refund the deposit after deducting
the amount which are not re-imported or re-exported as the case may be; provided
such goods are brought in the customs offices the following day after the seasonal
market, and within 30 days excluding time consumed for transportation after the
end of fair or exhibition.

• The Customs officer may release the goods without duty and keeping record
only, in case the goods are exported or imported according to this rules and
on the recommendation of the fully owned or majority owned government
enterprises or the diplomatic missions. In case the goods exported are consumed
in the foreign country or goods imported are consumed in Nepal, the concerned
importer or exporter of goods should pay the applicable duty on the amount of
goods consumed.
• Importation and exportation of goods should be made through the same customs
office. In case the import or the export of goods cannot take place from same custom
office, the concerned person should apply stating the reasons at the Department.
If the reason stated in the application is found to be justifiable, the Department
may allow the import or export of goods from different Customs office.
• In case of containers supplied for the use and transportation of such goods, for
the repeated use of such goods, and as long as it is used the container cannot
be emptied, the Customs officer may release such container without charging
Customs duty due after the furnishing of the bank guarantee for the Customs
duty equivalent, and noting in the declaration form the time period for the return
of such container. If the container is not returned within the specified time period,
the Customs duty shall be deducted from the bank guarantee. If the user of the
goods in the container can be transferred to other container by pouring such
goods, this facility will not be granted.
• If any industry intend to export the empty container for importing the goods by
fulfilling such empty container for the industry’s own use, such industry should
apply to the Customs officer specifying the details. In this case, the Customs
officer may permit the export of container on the conditions that five percent of the
value of empty container is deposited in cash or bank guarantee equivalent to the
amount valid for six months is furnished and the container is imported with the
goods within three months. If the container is not imported within the specified
time period, the industry should apply stating the reasons for the extension of
time period. In case of such application, if the Customs officer found the reason
justified, the chief of Customs office may extend the time period by one month. If
the container is imported within the specified time period, by loading the goods
by the industry, the Customs officer should collect the chargeable Customs duty
on such goods and refund the cash deposited earlier or release the furnished bank
guarantee.
• Any importer or the local purchaser of the chassis for the bus or truck would like
to export such chassis for the purpose of building the body should apply to the
Customs officer enclosing the copy of import declaration form or Invoice of local
purchase within the three months from the date of import or local purchase. If the
application is received, the Customs officer may permit the export of chassis on
the condition that five percent of the value of the chassis is deposited in cash or
bank guarantee equivalent to the amount is furnished and the chassis with body
is imported within six months.
• If the chassis with body is imported within the specified time period, the Customs
officer should collect chargeable Customs duty on the expenditure made on the

making of the body and refund the cash deposit or release the bank guarantee
whatever the case may be.
• Any Nepali contractor who get contract to work in foreign country would like to
take motor vehicle, machinery, equipment and parts thereof for the purpose of
such work should apply to the chief of the customs office along with the required
evidence. Upon receiving of application, chief of the customs office may examine
the case, and if found justifiable, shall allow to export such goods to the foreign
country without charging any duty. No duty shall levy on the goods exported
under this provision while return back after completion of the work.
• In case it becomes necessary to export the goods, produced in Nepal, for quality test,
the chief of the Custom Office may allow to export by keeping a deposit which shall
be five percent of the value of such goods. If the goods, exported for quality test, is
returned back within three months, previously deposited amount shall be refunded
after imposing the chargeable duty on the expenses involved in such testing. If the
goods, exported for the quality test, is returned back after three months, the duty
shall be imposed as imported as new goods.
Duty shall not be charged (Sec 7)

• If any importer makes an application for not releasing any goods imported by
that importer and for so leaving such goods with the Customs Office that they
belong to the Government of Nepal, no duty shall be charged on such goods. The
Government of Nepal may itself use the goods so left or the Customs Officer may
auction them.
• Where such goods are in such a condition that they can neither be brought into use
nor be auctioned, the Customs Officer may remove such goods from the Customs
Office or destroy them as prescribed; and the expenses incurred in such removal
or destroy shall be recovered from the concerned importer himself / herself.
Base Date for Determination of Duty (Tariff) (Sec 8)
• The duty of any goods to be exported or imported shall be determined according
to the tariff rate prevailing on the date clearance of such goods from the customs
office.
• Notwithstanding anything contained above, the duty of the following goods shall
be determined on the following basis:
(a) In the case of goods imported under the diplomatic facility, duty facility or partial
or full exemption, according to the tariff prevailing on the date of payment of
duty of such goods,
Conversion Rate of Foreign Exchange Rate (Sec 13)

• The conversion of such currency into Nepalese rupees shall be made according to
the selling rate of foreign currency which is prescribed by the Nepal Rastra Bank
and prevailing on the day in which the declaration form is registered in customs
office or received in customs office in electronic medium through the computer
system of such goods.

• In the case of a foreign currency of which exchange rate is not prescribed by

the Nepal Rastra Bank, such foreign currency shall be converted into American
dollars, and the selling rate of American dollars shall be taken as the basis.
• In converting the customs value of the goods of which duty is paid subsequent to
the importation thereof under the diplomatic facility, duty facility or full or partial
exemption of duty, such conversion shall be made according to the selling rate of
foreign currency which is prescribed by the Nepal Rastra Bank and prevailing on
the day of payment of the remaining duty.
Import of Vehicle or Equipment

Vehicle and equipment imported under diplomatic facilities or duty facilities or
imported by project or project contractor or consultant under a condition of return
back of such assets under full or partial duty facilities or bank guarantee facility or
deposit facility or imported by any other association under full or partial duty facility,
or vehicle imported on full or partial duty facility on personal purpose, gifted or sold
or retain by the importer, for finding the customs value, the customs officer shall
deduct 10% on the value fixed at the time of import on WDV method for a maximum
period of five years.
Customs value (after depreciation) is calculated in foreign currency (based on the
time of import). Such foreign currency shall be converted into Nepalese currency as
per current rate.
Depreciation will be calculated from the date of manufacturing less the period spend
in foreign country. If the vehicle or equipment are imported more than 5 years back,
depreciation shall be charged for maximum five years only.
Temporary Import of Vehicle

Any vehicle imported by a tourist under Carnet Facility for own use within Nepal,
the maximum period of use shall be 6 months (continuous or periodic) within one
year shall not be levied the duties. If any tourist kept such vehicle more than 6 months
in Nepal, except upon authenticated by the Nepal Police for repairs in workshop or
kept in Police Custody due to accident, shall be seized. Such vehicle cannot be donate,
sale or otherwise transfer within Nepal.
In case of temporary importation of vehicles other than carnet arrangement above,
the duty shall be levied as follows:
• If the vehicle returns from nearest Nepalese Market within same day of
importation, No duty.
• If the vehicle is car, jeep, van, bus, tourist bus, minibus, tourist bus Rs. 500 per
day, motorbike, scooter Rs. 150 per day, Tractor only and Three Wheelers Rs. 400
per day. Maximum stay of such vehicle is 30 days in a year. In stay more than this
period of 30 days, either the vehicle can be seized or duty is levied at Rs. 2500 per
day (Motorbike Rs. 1200 per day)

• Tractor with trailer, 700 per day, Truck and Trailer Truck, Rs. 1700 per day
and Means of Transportation attached with Boring Machine, Rs. 1200 per day.
Maximum stay of such vehicle is 30 days. In case, goods imported from such
tractor returns empty within forty eight hours, no duty is levied.
• In case of container (bullet) carrying LP gas from foreign country, no temporary
duty is levied up to ninety-six hour for unloading at eventual destination.
• Other than LP gas, truck carrying goods and trailer carrying container with goods
to be off load and trailer with empty container to on load goods with custom area
if shipped from foreign country, no temporary importation duty will be charged
for 72 hours.
• In case of truck loaded with goods and trailor with loaded container and empty
truck or trailor with empty container if unload and load goods respectively
outside custom area and returned within 48 hours, only one day duty is levied.
For more than 48 hours, per day Rs 2,300 is charged as temporary importation
duty. In case of strike or banda, custom officer may extend the period upto 3
days.
• In case of vehicle enters into Nepal under bilateral agreement, the duty shall be
levied as per agreement for that purpose.
• In case of import of Excavator, Dozer, Loader, Roller, Leveller, Crane and similar
heavy equipment import temporarily, NRs. 1,500 per day shall be levied for a
maximum period of one year.
• Combined harvester with oiler or straw collector used on agriculture function can
import temporarily by paying duties NRs. 1,700 per day for maximum period of
three months.
• Vehicle temporarily imported for drinking water and irrigation purpose, imported
equipment installed with boring machine import temporarily charges duty
Rs. 1200 per day.
• Foreign tourist enters Nepal without paying duties under this provision and
if he presents at customs office and applied for paying of duties, customs
officer charges fine Rs. 25000 as penalty in addition of duties under the act
subject to:
a. The vehicle entered into Nepal not exceeded by seven days.
b. No any petition is filed before custom office after being seized by any person or
entity.
Bonded Warehouse (Rule 9)

• Following Industry or person intending to avail of the facilities of bonded
warehouse should apply at the Department for the license:
(a) Industry exporting garment to foreign country,

(b) Industry exporting its product to third country,

(c) Except the Industry mentioned in clause (a), other industries exporting at least
twenty percent or goods having value of more than one crore of its production
to India,
(d) Person who is importing goods to sale through the government licensed duty
free shop.
• In case the industry which is not operating for more than a year, intends to
get license for the bonded warehouse should not need to submit certificate if it
submits conditional contract paper with the export plan and conformity of its
export to third country or exports to India of its production at least twenty percent
or goods having value of more than one crore.
• The time period for the license will be valid for one year. For issuance of new
license, six thousand rupees shall be paid. The licensee can get the license renewed
from the Department by paying renewal fee of NRs. Three thousand before the
next fiscal year starts, if licensee intends to renew the license for the next fiscal
year. If the licensee failed to renew the license, the licensee should pay additional
fee of NRs. Three thousand for each fiscal year for renewal of the license. The
licensee is deprived of the bonded warehouse facilities accorded to the licensee
for the period failing to renew the license.
Facilities granted to the licensee of the Bonded Ware House (Rule 10)
• Import necessary raw materials and the auxiliary raw materials (including the
packaging materials not produced in Nepal) with furnishing the bank guarantee
equivalent to the chargeable Customs duty for the purpose of producing goods
for export or sale in Nepal in convertible foreign currency. Bank Guarantee should
be furnished to the amount equivalent to the total of chargeable Customs duty in
addition to 15 percent on such Customs duty.
• The owner who received the license of bonded warehouse to operate the duty free
shop should furnish the bank guarantee equivalent to the chargeable Customs
duty for the import of goods to sale from the duty free shop.
• Industry licensed to operate bonded warehouse as per agreement with the foreign
buyer to buy its product under buyback agreement and with the recommendation
of Department of Commerce can import raw materials and auxiliary raw
materials under bank guarantee equivalent to Customs duty without opening
of Letter of Credit. The product under this agreement should be made of the
raw materials and auxiliary raw materials of no value sent by the foreign buyer
charging only the cost of production incurred during production process and the
profit and exported to same buyer or other buyer if recommended by Ministry
of Commerce.

Terms and conditions to be followed by the industry with bonded warehouse

facility (Rule 12)
• The industry with bonded warehouse facility should export the goods through
Letter of Credit or banking documents.
• The industry with bonded warehouse facility should export, or sell in homeland
against convertible foreign currency, the finished products within eleven months
from the date of import of raw materials or auxiliary raw materials (including
packing materials not produced in Nepal)
• On the export of the finished product made of raw materials or auxiliary raw
materials (including packing materials not produced in Nepal), imported by the
industry with bonded warehouse facility, the value addition should be ten percent
over the value as determined by the Customs.
• The rate of value addition as above is calculated as:
The amount, obtained by subtracting the value of materials used in the production
of goods to be exported determined by the Customs at the time of import of the
materials imported, from FOB price of the goods to be exported, is divided by
value determined by the Customs at the time of import of materials used in the
finished product, and the amount so derived is multiplied by hundred is the
percentage of value addition.
• The person getting the license of bonded warehouse should sale the goods from the
duty free shop in one year from the date of import as imported for the sale in duty
free shop.
• If the concerned person applies for the time extension with the reasons for not
being able to export or sale the product within the time period mentioned and
such reason appears to be reasonable, the chief of the customs office may extend
the maximum time period by six months.
• Upon the scrutiny of the application received and it is found that the applicant
has fulfilled all the terms and conditions, the Customs office should release the
bank guarantee and the deposit within one month.
• If the importer, who imported goods under bonded warehouse facility and facilities
to garment industry, do not comply with the terms and conditions, chargeable
Customs duty will be recovered from the furnished bank guarantee and chargeable
Customs duty will be transferred to the revenue account from the deposited amount
if such amount was deposited. The customs duty that will be recovered from the
bank guarantee will be equivalent to the sum of the customs duty chargeable on the
day of import and fifteen percent addition on such customs duty.
• In case of partial use of materials in the targeted use, chargeable customs duty to be
recovered from the bank guarantee on the materials not used will be equivalent to
the sum of the customs duty chargeable on the day of import and fifteen percent
addition on such customs duty.
• Customs duty only will be recovered in case of tax is collected from deposit, and
the duty free shop not able to sale the products within the time limit from the
bank guarantee or deposit.

Special Provision for Garment Industry

In addition of above, other applicable provision for Garment Industry are as
follows:
• If the Nepali textile industry intends to sale its product to the export oriented
garment industry, the yarn (wfuf]) needed for the production of such product may
be allowed to import by furnishing bank guarantee equivalent to the chargeable
Customs duty on the recommendation of Textile Industry Association.
• The textile industry importing yarn should sale its textile made from such yarn
to the export oriented garment industry within eleven months from the date of
import of yarn. Extension is allowed as above. The value addition should be ten
percent over the value as determined by the Customs
Application to be submitted for the release of Bank Guarantee or deposit

(a) Document relating to import of goods as per rule 10,
(b) Document relating to the export of finished product,
(c) Certificate of foreign exchange earning issued by the concerned bank
(d) Certificate of consumption ratio of use of raw materials and the auxiliary raw
materials from the concerned agency.
Diplomatic Facility, Duty Facility and Customs Duty Exemption (Sec 9, 10, 11)
• Diplomatic facility or duty facility shall, on recommendation of the Ministry
of Foreign Affairs, Government of Nepal, be accorded, as prescribed, to those
bodies, officials or persons who are entitled to enjoy such diplomatic facility or
duty facility under any bilateral or multilateral treaty or agreement to which
Nepal is a party.
• The Government of Nepal may, from time to time and by notification in the
Nepal Gazette, accord the diplomatic facility or duty facility to such goods to be
imported by such persons or bodies as specified in that notification.
• The Government of Nepal may, from time to time and by notification in the Nepal
Gazette, accord partial or full customs duty exemption to the goods specified in
that notification.
• The Government of Nepal may accord partial or full customs duty exemption to
the goods to be imported in the name of any project to be operated under foreign
loan or grant assistance or in the name of the contractor of such project.
• The Government of Nepal may accord partial or full customs duty exemption to
the fuel to be consumed during international flight, engine of aircraft, spare parts,
machine, equipment thereof, food, liquors, beer and light drinks consumed in
flight by an international air service company.
• The provisions for according the duty facility to any goods to be brought again
into Nepal from any part of Nepal via any abroad route shall be as prescribed.
• The provisions for according the duty facility to any goods to be sent again to a
foreign country from the foreign country via Nepal shall be as prescribed.

• Government of Nepal may give total duty exemption to be imposed while

importing relief materials. While giving such duty exemption, details of goods
given duty rebate and time period to be got such exemption facility should be
mentioned.
Special Facilities to Industry Situated in Special Economic Zone (Sec 12)

• The Government of Nepal shall accord customs duty exemption and other facility
against bank guarantee to the following goods to be exported and imported by
any industry situated in the Special Economic Zone:
(a) Such raw materials, subsidiary raw materials as required to manufacture
finished goods to be exported, packing materials and other materials to be
used in manufacturing,
(b) Plants, machineries, machines, equipment, tools and spare parts as required
for the industry, and up to three motor vehicles based on the size and nature
of industry;
• If any importer sells, as prescribed, any goods which that importer has imported
to any industry situated in the special economic zone and that importer has paid
the customs duty for importing such goods, the Customs Office shall refund, as
prescribed, such customs duty to that importer.
• If any industry situated outside the special economic zone sells any finished
goods manufactured by that industry to any industry situated within the special
economic zone, such customs duty and other facility as is accorded in the event of
export shall be accorded as if that sale were an export.
• If an industry situated within the special economic zone
so sells any goods manufactured from the raw materials
imported under the customs duty exemption that such goods
are consumed in Nepal, such goods shall be allowed to be taken out of the special
economic zone only after payment of duty chargeable on the raw materials used
in such goods.
Special Provision about Goods sold to the industry located in the Special Economic
Zone (Rule18)
On the prior approval of the Department, if the importer sales imported goods to the
industry located in the Special Economic Zone, such importer,
in case of payment of customs duty at the time of import,
should apply at the customs office for the refund of the customs
duty within sixty days of the date of import along with the attachment of the following
documents:
(a) Invoice, Customs declaration form and cash receipt at the time of import;
(b) Sales Agreement between the purchaser industry and the seller importer;
(c) Receipt of sales of goods
(d) Certified copy of the ledger for the purchase of goods by the purchasing industry;

(e) Documents relating to the payment for the purchase by the purchasing industry;
and
(f) Bank Guarantee issued in favor of the customs office equivalent to the customs
duty on behalf of the purchasing industry or the sales importer.
• If the chief of the customs office found, on the scrutiny of the application
received, that the refund of the customs duty is justified, refund full or partial-
should be made within thirty days from the date of application received.
Determination of Customs Value of Goods to be imported (Sec 13)

• Transaction Value Method:
• Identical Goods Method:
• Similar Goods Method:
• Deductive Value Method:
• Computed Value Method:
If the customs value cannot be determined as per computed value method, the Customs
Officer shall so determine the customs value of such goods on a reasonable basis.
If the owner of the goods imported under the Baggage Order for personal purposes
or the goods received as a gift or specimen and imported from a foreign country or
relief materials makes an application for the valuation of such goods, showing the
reason for failure to indicate the transaction value thereof and if the Customs Officer
considers the matter to be appropriate or submitted without indication of value, he or
she may determine a reasonable customs value of such goods.
• If the value declared by an importer is less than the customs value determined by
the Customs Officer, the Customs Officer may do the following in relation to such
goods:
(a) Clearing such goods by collecting fifty percent additional customs duty on
such difference value, or
(b) Purchasing, or causing to be purchased, such goods in a manner to pay the
amount to be set by adding five percent amount to the value so declared to the
importer.
• The invoice value declared by an exporter shall be the customs value of the goods
to be exported.
Determination of Custom Value Provisionally (Temporarily) (Sec 14)

Customs Officer may determine a reasonable provisional customs value of imported
goods if:
(a) The importer makes an application, along with a reasonable reason, that he
or she is not able to forthwith provide necessary documents and other related

information as required for the valuation of goods,

(b) The customs value has to be or can be determined only after carrying out the
laboratory test or other examination of goods or there appears a need to make
further inquiry into the documents and information provided by the importer.
Where, after the determination of provisional customs value, the importer wishes
to clear the goods by furnishing a deposit of the duty chargeable on such goods, the
Customs Officer shall make clearance of such goods.
The Customs Officer shall determine the customs value of the goods, no later than
thirty days after the date of determination of the provisional value.
Process of Import/Export (Sec 17-Sec 23)

• Details to be submitted : The driver of a motor vehicle transporting any goods to
be exported or imported shall provide such details of goods held in the vehicle as
may be prescribed to the Customs Officer before such vehicle enter the Customs
Office.
• Declaration form to be filled up and submitted
• Examination of declaration form
• Examination of goods: The Customs Officer may make clearance of goods
adopting any following process, pursuant to the selectivity system:
(a) To make clearance of goods on the basis of declaration without examining
goods and documents thereof, or
(b) To make clearance of goods by examining related documents only without
examining the goods, or
(c) To make clearance of goods on the basis of declaration subject to make post
clearance audit without examining the goods and related documents, or
(d) To make clearance of goods by fully examining the goods and related
documents.
• Valuation to be made
• Classification of goods and determination of duty
• Clearance of goods
Determination of duty prior to arrival of goods at Customs Office (Sec 24)

• If any importer wishes to pay the duty chargeable on any goods to be imported by
the importer prior to the arrival of such goods at the concerned Customs Office,
the importer may, for that purpose, make an application, accompanied by the
declaration to the Customs Officer.
• If the rate of duty determined or the exchange rate of convertible foreign currency
prevailing on the day of payment of duty differs from that prevailing on the day
of clearance of goods, the rate prevailing on the day of clearance of goods shall be
applied. The Office shall complete necessary procedures and make clearance of
such goods with priority.

Export of Software (Sec 25)

• If any person exports software through electronic means, such software shall be
deemed to have been exported only after certification by the Nepal Rastra Bank, on
the basis of, inter alia, the agreement relating to export, invoice and the evidence
of payment made by the concerned importer.
Specimen collection and test of goods (Sec 30)

If it is required to subject food or beverage or any goods to a special test from the
perspective of quality test, customs valuation, classification, possible impact in health
or environment the Customs Officer may take the specimen of such goods in the
presence of goods owner or his/her agent and get such specimen tested by himself/
herself or the concerned expert or the laboratory run by department or customs office
or other government agencies
Power to visit and examine goods in the concerned place (Sec 31)
• Any exporter may submit an application to the Customs Officer to visit the
production site or godown of any goods to be exported by the exporter and
examine such goods. the Customs Officer may visit such production site or
godown on his or her own and examine such goods or send any of his or her sub-
ordinate employee to such site or godown for such examination, by collecting the
fees as prescribed.
• Any importer may submit an application, accompanied by the prescribed
documents and the declaration form filled up, to the Customs Officer for the
examination of the goods imported by the importer outside the customs area. The
Customs Officer may, by obtaining prior approval of the Director General, visit
the site outside the customs area on his or her own and examine the goods or send
any of his or her sub-ordinate employee for such examination, by collecting the
fees as prescribed.
• Prior to making examination as above, the Customs Officer shall take a deposit
of an amount to be set by adding fifty per cent duty to the duty chargeable on
the goods according to the customs value declared by the importer. The Customs
Office shall refund the excess amount to the importer if such deposit is more than
the customs duty chargeable on such goods and recover from the importer the
shortfall amount if such deposit is less than such customs duty.
Post Clearance Audit (Sec 34)

• In order to ascertain whether the goods cleared by the Customs Office are the same
as declared by an importer or confirm to the declaration made by the importer or not,
the Director General or customs officer may audit, inter alia, the importer's books
relating to the purchase, import or sale of goods, records, books of accounts or similar
other documents, bank records, computer system and all records related to his or
her business.

• If, upon audit made, it is found that the goods imported by the importer are different
than those declared by the importer or are inconsistent with the declaration made
by the importer or the transaction value or the quantity of the goods has been
declared less and by virtue thereof lesser duty has been recovered, the Customs
Officer shall immediately recover from the importer the duty chargeable on such
less value or quantity at the time of import and take action against such importer
for the declaration of less transaction value or quantity.
However, when less transaction amount is declared hundred percent of the duty
chargeable will be collected as fine.
• If, upon audit made, it appears that less duty has been recovered by the reason
of difference in sub-heading of commodity classification, the concerned Customs
Office shall recover such shortfall amount of duty and fine equivalent to that of
shortfall amount from the importer.
• While determining duty, concerned person shall be provided fifteen days time to
submit the clarification.
• The duty and fine amount determined under this section shall be deposited within
thirty-five days from receiving the order to deposit the amount by the person so
ordered. Duty and fine amount not paid within mentioned time shall bear interest
at the rate of fifteen percent annually for the period beginning with the date of
order and ending with the date on which the payment is made.
• If, any importer does not deposit the amount that should be deposited, Customs
officer shall freeze moveable or immoveable property of such importer and collect
such amount from the said property.
• The audit referred to in this Section may be made until four years after the date of
clearance of goods.
• The importers should keep the all documents and papers relating to the import
for the purpose of post clearance audit for four years from the date of import.
• In order to determine the reality of the value as declared in the customs office at
the time of import, the ledger of transaction may be checked from the sales of the
product up to the retail level.
Customs Agent (Sec 51-53)

• A person who wishes to act as the customs agent or representative of any importer
or exporter to clear goods to be imported or exported from the Customs Office or
to do any act related with the Customs Office shall obtain the license of customs
agent from the Department or Customs Office.
• If any exporter or importer wishes to get the goods to be exported or imported
cleared not by himself or herself but through a customs agent or to do any act related
with the Customs Office not by himself or herself but through a customs agent, such
exporter or importer may appoint his or her customs agent as prescribed.

• If the owner of any goods appoint any person as his or her customs agent to get
such goods cleared from the Customs Office or to do any other act as referred to
in this Act and the Rules framed under this Act, such customs agent shall, for that
purpose, be deemed to be the owner of such goods.
Qualification for Customs Agent (Rule 37)

(a) More than twenty one years of age.
(b) Minimum qualification of bachelor level or equivalent from recognized education
institution with computer basic training of at least three months,
(c) Has no outstanding payment due to the government,
(d) Has not been proved offender from the court in any criminal offence.
Any person who has worked as representative of the customs agent for more than
two years until 2065 Baishakh 14 and is certified by the chief of the customs office on
the basis of the record, such person may apply for the customs agent and qualification
mentioned above is not necessary for such person.
License Fee and Renewal: Seven Thousand, Guarantee: Seven Lakh (In cash or Bank
Guarantee),
Duties of Customs Agent (Sec 53A)

Duties of Customs Agent, appointed for the purpose of releasing goods from the
Customs Office or to do other works relating to customs office, shall be as follows:
(a) To fully comply with the laws related with customs,
(b) To provide necessary support to the customs office to simplify customs
clearance process,
(c) To provide necessary support to the customs office in duty recovering work,
(d) Not to cause any kind of obstruction in work and activities of the customs office,
(e) If Customs Officer give written notice for making presence the importer or
exporter who appointed him or her, to give such notice to the concerned
importer or exporter.
Cancellation and Suspension of Customs Agent License (Sec 55)

• The Customs Officer may suspend any customs agent on whom a fine is imposed
or who does any act contrary to this Act or the Rules framed under this Act or fails
to fulfill his or her duty for a period from one month to six months.
• If any customs agent does the act as above for the third time or gets license by
submitting fake academic qualification certificate or other fake document, the
Customs Officer may cancel his or her license. Such customs agent shall not be
entitled to obtain the license of customs agent again.
• Prior to suspending or canceling the license, the concerned Officer shall give an

opportunity to such customs agent to defend him or herself.

• If case has been filed in court in accusation of criminal offence or accusation of
corruption as per the prevailing law against the customs agent, he/she shall, ipso
facto, be suspended from the date of filing the case.
• If any customs agent is proved offender from the court in any criminal offence,
his/her license shall, ipso facto, be cancelled. Such customs agent shall not be
entitled to obtain the license of customs agent again.
Fine and Penalty (Sec 57)

• If amount of controversy is up to 1 Million rupees, Customs Officer may forfeit
such goods and impose a fine equal to the amount in controversy of such goods
and may order for imprisonment.
• In case of amount of controversy up to 1 million rupees where the motor vehicle
used to transport the goods to be forfeited has been used with the consent or
knowledge of the owner of that motor vehicle, the Customs Officer shall forfeit
such motor vehicle and punish the owner upto amount of Rs 1 lakh. Where the
driver of such motor vehicle has knowingly used it to transport such goods
without consent or knowledge of the owner of that motor vehicle, the Customs
Officer shall punish such driver with fine upto Rs fifty thousand.
• If amount of controversy is more than 1 Million rupees, District Court may order
to forfeit such goods and impose a fine equal to the amount in controversy of such
goods and may order for imprisonment.
Details of Imprisonment
Amount in Controversy (Bigo) Imprisonment
10 Lakh to 25 Lakh Up to 1 Month
25 Lakh to 50 Lakh 1 Month-3 Months
50 Lakh to 1 Crore 3 Months -1 Year
1 Crore to 3 Crore 1 Year -3 Years
More than 3 Crore 3 Years -5 Years
• In case of amount of controversy is more than 1 million, where the motor vehicle
used to transport the goods to be forfeited has been used with the consent or
knowledge of the owner of that motor vehicle, the Customs Officer or the District
Court shall forfeit such motor vehicle and punish the owner with imprison
for a term not exceeding one year. Where the driver of such motor vehicle has
knowingly used it to transport such goods without consent or knowledge of the
owner of that motor vehicle, the Customs Officer or the District Court may punish
such driver with a fine of up to five thousand rupees or with imprison for a term
not exceeding one year or with both punishments.

• The Customs Officer or the District Court may punish any person who aids and
abets the commission of offense as if such person were the offender.
• If any person hides or knowingly keeps any goods exported or imported by way
of export or import smuggling, the Customs Officer may forfeit such goods and
punish such person with a fine of up to ten thousand rupees.
• If any exporter, importer or customs agent make declaration with under
stocking despite that the name, nature, physical features, characteristics,
measurement, size and quality of goods are accurate, the Customs Officer may
clear such goods by imposing a fine of cent percent of the value of those goods
which have been under-stocked on the owner of such goods and collecting the
chargeable duty.
• If any exporter, importer or customs agent makes declaration falsifying the
country of origin despite that the name, nature, physical features, characteristics,
measurement, size, quality and quantity of goods are accurate, the Customs
Officer may clear such goods by imposing a fine that is 25 percent of the customs
duty chargeable on such goods on the owner of such goods and collecting the
chargeable duty.
• If any exporter or customs agent declares the quantity that exceeds the actual
quantity of the goods to be exported, the Customs Officer may clear the goods by
imposing a fine that is two hundred percent of the value of goods so declared as
excess and mentioning that fact in the declaration form.
• If any exporter or customs agent make declaration falsifying all or any details
out of the name, nature, physical features, characteristics, measurement, size and
quality of goods, the Customs Officer may forfeit such goods and impose a fine
that is equal to the amount in controversy on the owner of such goods.
• If any importer or customs agent makes declaration falsifying the goods or the
materials of which the goods are made or falsifying all or any details out of the
nature, physical features, characteristics, measurement, size and quality of goods or
does not make declaration of any goods, the Customs Officer may forfeit such goods
by imposing a fine that is equal to the value of such goods on the owner of such
goods or clear such goods by imposing a fine that is equal to two hundred percent of
the value of such goods and collecting the chargeable duty.
• If any person causes or attempts to cause a loss of revenue or duty by submitting
a forged, fake or false document to the Customs Office, the Customs Officer may
punish such person with a fine that is two hundred percent of the amount of duty
or revenue the loss of which has been so caused or attempted to be caused or with
imprisonment for a term from six months to one year or with both punishments;
and the matter shall be forwarded to the concerned body or authority to take
action under the prevailing laws in relation to the commission of forgery of
governmental documents.

• If the owner of any goods or his or her agent opens in any manner any customs
godown or goods stored in that godown with intention to steal goods or cause
loss of or damage to such goods, the Customs Officer may punish such owner or
agent with a fine not exceeding five thousand rupees.
• If any person removes or takes goods stored in a customs godwon from such
godown without approval of the Customs Office, the Customs Officer may
punish such person with a fine that is equal to the amount in controversy and with
imprisonment for a term not exceeding six months or with both punishments.
• If any person knowingly writes, signs or uses the specific matter of the declaration
form or document utilized in the performance of the functions of the Customs Office or
forges or alters or destroys any document signed, stamped or sealed with initial, signed
by or any sign or symbol affixed therein by the Customs Officer in the course of the
performance of the functions of the Customs Office, the Customs Officer may punish
such person with a fine not exceeding five thousand rupees and with imprisonment
for a term not exceeding one year or with both punishments, and the matter shall be
forwarded to the concerned body or authority to take action under the prevailing laws
in relation to the commission of forgery of governmental documents.
• If the person or employee who has the custody of the goods stored in the customs
godown recklessly loses or knowingly damages such goods, the Customs Officer
may punish such person or employee with a fine not exceeding five thousand
rupees, by recovering from such person or employee the value of such goods and
the chargeable duty.
• If any unauthorized employee removes or gives order to remove any goods stored
in the customs godown, the Customs Officer may punish such employee with
a fine not exceeding five thousand rupees or with imprisonment for a term not
exceeding one year or with both punishments.
• If the documents required for audit according to section 34 (Post Clearance Audit)
are not presented within stipulated time, Director General or Customs Officer can
determine a penalty of Rs. 10,000 each time from the importer.
• If it appears, from the review carried out pursuant to Section 70 (review the declaration
forms), that there is a difference in the customs duty by the reason of submission
by the owner of goods of goods of fake bills, invoices or documents, the Customs
Officer may punish such owner with a fine that is two hundred percent of the value
of the goods cleared from the Customs Office or with imprisonment for a term not
exceeding one year or with both punishments.
• If any person commits any act contrary to this Act or the Rules framed under this
Act, except that set forth in this Section (Specifically mentioned), the Customs
Officer may punish such person with a fine not exceeding five thousand rupees.
• If Authorized Officer, in the course of re-examination before or after removal the
goods from the customs area, made clearance, finds the name, nature, physical

feature, characteristics, measurement, size and quality standard are difference

than those declared by the importer, such Officer may release the goods by
recovering an additional fine that is equal to three hundred percent of the value
of such goods apart from the fine and duty mentioned in this Section or impose a
fine that is equal to two hundred percent of value of such goods by confiscating
such goods. And, the Department may withhold the transaction subject to not
allowing to import and export again by the importer
• If any person is found using or selling the goods against the objective for which
the goods is imported with full or partial customs duty exemption or facility
or the person who is not entitled to get exemption or facility but he/she has
imported goods in partial customs duty exemption or facility, the Customs
Officer may impose a fine that is equal to cent percent of the customs value of
such goods.
• If any person deliberately obstructs or hinders the Customs Officer or any
employee of the Customs Office in the exercise of the powers conferred by this
Act and the Rules framed under this Act, the Customs Officer shall punish such
person with a fine not exceeding five thousand rupees or with imprisonment
for a term not exceeding one year or with both punishments, if such person is a
governmental employee, and with a fine not exceeding one thousand rupees or
with imprisonment for a term not exceeding six months or with both punishments
if such person is not a governmental employee.
• The Customs Officer may punish a customs agent who commits any act (under
invoicing, declaration falsifying the country of origin, quantity that exceeds the
actual quantity , falsifying all or any details) with a fine from twenty five thousand
rupees to fifty thousand rupees or with imprisonment for a term from one month to
six months or with both punishments. The owner of goods shall not be deemed to
have been released from punishment or fine imposable on him or her by the reason
only that the customs agent has been punished.
Review and Appeal

Valuation Review Committee
(a) At least Gazetted First Class officer of the Civil Service who has knowledge and
experience in the field of revenue administration -Chairperson
(b) One person who is incumbent in the office of at least Gazetted Second Class and
has gained at least three years of experience in the Gazetted post on customs
administration or who has retired from the office of that Class and has gained the
said experience –Member
(c) One person who is incumbent in the office of at least Gazetted Second Class and
has gained at least three years of experience in the Gazetted post on international
trade –Member

• A person who is not satisfied with any decision or order for Custom Valuation
made by the Customs Officer may, for the review of such decision or order, file an
application, as prescribed, to the valuation review committee no later than thirty
days after the date of such decision or order.
• The term of the chairperson and members of the valuation review committee shall
be of three years.
• The Valuation Review Committee shall, while making review, inquire into
whether the customs valuation determined by the Customs Officer is accurate or
not and may approve or void the valuation determined by the Customs Officer
or make valuation of such goods or order Customs Officer for revaluation. The
Valuation Review Committee shall also assign clear reasons and bases while so
approving, voiding valuation or making valuation or ordering for revaluation.
• A person who files an application for valuation review, prior to making such
application, furnish with the Customs Officer a deposit of the duty chargeable
according to the valuation determined by the Customs Officer.
• Valuation Review Committee should take final decision within ninety days from
the date of registration of the application.
• Function, duty and authority of Valuation Review Committee shall be as follows:
(a) To examine into the evidence presented by the applicant,
(b) To approve the decision of the customs officer or revoke the decision and
take decision on behalf of the customs officer,
(c) To ask to the applicant for submitting additional documents or evidence,
(d) To collect necessary information for valuation of the goods.
Appeal
• A person who is not satisfied with the customs duty determined by the Customs
Officer or other employee under this Act or with any order or punishment or
decision issued or made by customs officer, except any decision regarding
determination of custom value, or with any decision made by the valuation
review committee may make an appeal to the Revenue Tribunal within thirty five
days after the date of the determination of such customs duty or the imposition of
punishment or the making of decision.
• A person who files an appeal as above may make such appeal by making payment
of or furnishing a deposit of the duty and amount of fine and penalty chargeable
pursuant to that decision or order against which such appeal is to be made, to or
with the concerned customs office or post clearance office.
Provided that the person who is imprisoned being unable to furnish the amount
of such fine and penalty wishes to make an appeal need not furnish the deposit.
• A person who files an appeal shall give a copy of such appeal to the concerned
customs office or post clearance office no later than seven days after the filing of
such appeal.

Rewards (Sec 71 and Rule 47)

• If any employee or person gives clues as to that any one has committed or is
going to commit export or import smuggling of any goods or arrests such goods
and hands over them to the Customs Office, reward, shall be provided to such
employee or person if such act is proved as follows:
(a) For persons furnishing information about attempts to smuggle goods, fifteen
percent,
(b) For persons seizing goods being smuggled and producing the same along
with the smuggler, thirty percent,
(c) For persons who only seize and produce goods being smuggled, twenty
percent.
• If the individuals getting reward as above are more than one person, the amount
of reward will be equally distributed.
• In order to grant reward to the person who gives clue and submits the goods along
with arresting with or without person in the case of gold, silver or ornament, the
reward shall be granted ten percent of the amount received through auction or
sale or one million rupees whichever shall be less.
• In order to give information in case of export or import smuggling through
airplanes, airplane’s flight number, to the extent possible, the export or import
smuggler’s name or passport number or physical features and name of the goods
being smuggled and the mode of bringing or carrying through hidden process
should be revealed. In case of export or import smuggling through land route,
name of the goods being smuggled, place, date and time of smuggling, type of
vehicle and number, mode of bringing or carrying through hidden process and
to the extent possible, the export or import smuggler’s name or physical features
should be revealed.
Demurrage (Sec 72)

• If the owner of goods stored in a customs godown operated by the Customs
Office does not get clearance and get delivery of such goods within seven days,
demurrage shall be charged as follows: In excess of first seven days:
(a) In the International Airport Customs Office: Per day per KG 60 paisa for first
30 days, Per day per KG 1 Rupee for more than 30 days up to 60 days, Per day
per KG Rs.1.40 for more than 60 days.
(b) Other customs offices: Per day per KG 40 paisa for first 30 days, Per day per
KG 60 paisa for more than 30 days up to 60 days, Per day per KG charge 80
paisa for more than 60 days.
Clarification: For the purpose of demurrage charge, to count the weight, all goods
in one customs declaration form or one consignment should be counted for weight.
While counting the weight if the remaining goods is less than one KG it will be
treated as one KG.

Provided that no demurrage shall be charged in the case of those goods which
could not be cleared by the Customs Officer because of confusion about the
valuation, classification of goods or for other reason.
• If there is a reasonable ground for remitting demurrage chargeable on any goods
because of the occurrence of any special circumstance or condition, the prescribed
authority may make full or partial remission, as prescribed.
Remission for the Demurrage (Rule 51)

• If the owner of the goods has reasonable ground for the remission of the demurrage,
the owner may apply for the remission with the evidence and documents to proof
the claim to the chief of the customs office.
• Chief of the customs office may decide in writing to grant remission from
demurrage either partially or in full in respect of goods to be exported or imported,
in case he is satisfied that there exist specific reasons for granting such remission.
The limitations for remission for demurrage is as follows:
a) Up to Rs. 25,000 if non-gazetted staff is the chief of the customs office;
b) Up to Rs 100,000 if third class gazetted officer is the chief of the customs office;
c) Up to Rs 300,000 if First or Second class gazetted officer is the chief of the customs
office.
Refund of Customs Duty or Fine (Sec 75)

• If any exporter or importer has paid the customs duty in excess of the duty which is
chargeable on exportation or importation under the laws, the concerned Customs
Office shall refund, as prescribed such excess customs duty to that exporter or importer.
• No customs duty shall be refunded on the following condition:
(a) If no application is submitted to the concerned Customs Office to take refund
of such duty within sixty days after the release of goods, or
(b) If the figure claimed for refund is less than five hundred rupees.
• If, in making decision on an appeal made under this Act against the duty or fine
recovered by the Customs Officer, decision is made to waive all or any of the duty
or fine so recovered, the Customs Officer may refund such customs duty or fine
to the concerned person only where no further appeal can be made against that
order or only after the concerned court decides not to grant permission.
Import of Second Hand Items

• Any industry importing mill machinery under charter 84 for operation of industry,
can import old mill and machinery not exceeding life of five years from the date
of manufacture.
• Printing industry can import those printing machine not exceeding life of ten
years from the date of manufacture.
• With prior approval from Government of Nepal, old or used material can be
imported by International Association or Institution for relief and rescue.

• Contractor or project of project operated in Nepal can import old or used mill
machinery and equipment on the condition of return back and old refueler tank
imported by Nepal Oil Corporation from Indian Oil Corporation on the condition
of return back.
• Old or used material and mill, machinery and equipment cannot be imported
except those mentioned above.
Special Provision of Import of Vehicle

• New vehicle or means of transport can only be imported by authorized agent of
Manufacturing Company or their authorized seller.
Exception: Imported by Government Entity, Diplomatic or duty facilities,
government project operated under loan and grant facility, scooter used by
disable person, fire engine, ambulance, tractor used in agriculture, imported by
foreign diplomatic mission in Nepal and import of Broomer on recommendation
of local body.
• Cannot import recondition, used or vehicle or means of transport does not lies
under Nepal Vehicle Pollution Standard, 2069. Exception: Fire Engine
• Maximum retail price of vehicle and means of transportation should be published
in National level daily newspaper in every four months.
Miscellaneous
• Anybody who deposited fund in the customs office as per Act or this regulation
should apply for the refund to the customs officer within one year after the
purpose for which the fund is deposited is realized.
• The owner of goods seeking compensation for loss or damage in the godown, should
send application to the customs office or the operator of the go-down stating the
clear reasons for compensation along with the documents to prove the claim. Such
application should be examined and if it is found that the compensation needs to be
provided, decision should be taken to provide compensation to the total amount of
price quoted in the invoice and five percent addition to the price quoted.
• The exporter or importer or their customs agent, in case of shortfall in the amount
to be deposited as customs duty because of mathematical error, or due to the
difference in the classification head or sub-head, or for other reasons, or the penalty
amount due; should be immediately notified by the customs officer to deposit the
penalty or the shortfall in the customs duty, as soon as the customs officer knows
about it. The person notified should deposit the amount in the customs office
within fifteen days from the date of notification.
• If the exporter or importer paid more than the due amount of customs duty for
the export or import of goods or the penalty, the exporter or importer should
apply for the refund of the excess amount at the customs office. Such application
should be examined and if it is found that the excess amount needs to be refunded,
written decision should be taken to refund the excess amount and refund such
amount within fifteen days from the date of the application received.

• While exporting or importing goods, export or import of goods other than the
immediate neighboring countries are not permitted through branch custom office.
Following goods may be exported or imported through the branch customs office
(5f]6L eG;f/):
a. On the export, unprocessed agriculture goods and the local natural production.
b. On import, branch customs office mentioned in annex 12 may allow to clear
goods valuing any amount.
c. On import, branch customs office mentioned in annex 13 may allow to clear
goods valuing up to twenty five thousand rupees.
d. On import, branch customs office mentioned above in clause a. and b. may
allow to clear goods valuing up to ten thousand rupees.
Branch customs office can not import machine run vehicle permanently or
temporarily except permitted by Director General.
• With the approval of the government, any person may operate warehouse to store
goods for import or export by constructing the warehouse in the premises of the
customs office.
• In case any parcel imported in the name of consignee, the concerned post office
should send this parcel at the nearest customs office, while at the same time inform
the consignee about the arrival of the parcel. In case anyone would like to export
goods through a parcel to the foreign country, the post office may export it on the
condition that the exporter clears the goods from the nearest customs office and
produces the declaration form along with the goods.
• If the importer wishes to make partial clearance of goods imported with a single
invoice and stored in the customs warehouse may submit an application to the
Customs Officer. The customs officer shall make clearance of goods which is
wished to be cleared, by charging the duty only on the quantity of goods to be
cleared, provided no any reason that obstructs making partial clearance.
• If any goods mistakenly received in wrong address through the air-routes and
if the concerned party submitted an application with the reason for taking back,
the chief of the customs office, if found reasonable after conducting necessary
investigation, may allow the applicant to take back such goods.
• In case of import from India under LC, rebate on custom tariff shall be provided
at the rate of five percentage if the tariff is five to thirty percentage and three
percentage rebate if the tariff is more than thirty percentage.
• In case of import from Tibet under LC, rebate on custom tariff shall be provided
at the rate of five percentage if the tariff is five to thirty percentage and three
percentage rebate if the tariff is more than thirty percentage.
• No duty shall be levied on the import or export of sample received from the
patient’s body for lab test.
• If old trucks are carried out to outside of Nepal and makes container truck or
container carrier truck and return back to Nepal, No duty shall be levied on such
expenses.

• Nepalese publisher, distributor, or sole agent or book having copyright printed

outside of Nepal and imported into Nepal, 15% duty shall be levied on printing
cost (paper, expenses on printing, transportation and insurance).
• Nepalese citizen going for foreign employment and works continuously to 12
months, carries any kind of one television up to 32 inch with him/her, no duty
shall be levied on that for one time. If he/she carries television of more than that
size, no facility will be provided.
In case of others, 55% lump sum custom duty will be levied on such import instead
of custom duty, excise duty and valued added tax.
• No duty shall be levied on the import of scooters used by persons with disabilities
shall, if such scooters are imported in the name of disable person on the
recommendation of Ministry of Women, Children and Senior Citizen or Chief
District Officer of concerned district. At the time of import, if such scooter cannot
be used by disable person and will register such scooter after modifying and able
to use by the disable person, on the recommendation of such ministry or Chief
District Officer of concerned district, can import on duty deposit. After submitting,
the evidence of registration of such scooter in the name of disable person, deposit
will be refunded. No duty shall be levied on sale or transfer of such scooter to
another disable person, on the recommendation of Nepal Disabled Association.
• NRs. 20,000 shall be charged as custom duty while importing foreign film for
showing in Nepal.
Short Notes:
DRP system
• The full form of DRP is duty refundable procedure. DRP is an export promoting
tool used by India. Under this procedure, India refunds Nepal the excise duty
paid by Nepalese importer. Indian Government has settled some procedure
regarding refunding the excise duty. This procedure is known as DRP system.
This provision is mentioned in protocol 3 of Nepal India Trade Treaty. But the
refund-payment will not be excess than the excise charged by Nepal Government
on similar type of goods. Similarly while charging the custom on such excise paid
Indian goods, the custom duty should be charged after deducting the excise duty.
CTD form
• CTD is known as custom transit declaration. An importer is liable to submit
such form in custom point. Mainly this form is used when the importer of Nepal
imports the goods from third country via India. This is the form for certification
by importer regarding the goods that have to be imported. This form contains
name and address of importer's agent, name and address of importer, address
for delivery, ship's name, route of transit, Country of consignment or country of
origin and serial number, import license number, endorsement of customs and
Indian border custom, Quantity of goods, descriptions of packages and value of
goods.

Bill of Lading
• Bill of lading is transportation related document that is used by exporter or
importer. This is related to ship transport or ship freight. Transport Company
issues it. This form contains importer/exporter's name, address, quantity of
goods, container number, name of the goods, date, freight amount etc.
Harmonized System Code (HS Code)

• Goods imported or exported are valued as per Harmonized System. As there
could be multiple variation on the similar products, custom tariff are determined
based on the harmonic code of the goods rather than their names. According to
Section 89 of the Customs Act, if in determining the customs duty, there is a doubt
as to in which heading or sub-heading of the harmonized system do any goods
fall, the Custom Officer shall classify such goods in the heading or sub-heading as
prescribed by the Director General.
There may be ambiguity as to which code a particular goods fall, in such case
prior to the exportation or importation of any goods, exporter or importer submits
and application to the prescribed committee also comprising an expert in the
field concerned for the specification of the heading or sub-heading of commodity
classification of such goods, the committee may, also examining a sample of such
goods, prescribe the heading or sub-heading of such goods. The Director General
and the committee shall, in prescribing a heading or sub-heading, respectively,
so prescribe based on the authentic text of the harmonized system of the ―World
Customs Organization.
For the purposes of prescribing the heading or sub-heading of any goods, advice
of the concerned expert or national or international body may be sought.
Full Form: FOB: Free on Board, CFR: Cost and Freight, CIF: Cost Insurance
Freight,

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Synopsis of Customs Duty Act and Regulations

Synopsis of Customs Duty Act and Regulations

Application and Collection of Customs (Sec 5 and 6)

488 The Purple Book of Tax

With Amendments by Finance Act, 2076 489

Export or Import of Goods for Repair (Rule 7)

490 The Purple Book of Tax

Re-export or Re-import of exported or imported goods (Rule 8)

With Amendments by Finance Act, 2076 491

492 The Purple Book of Tax

Duty shall not be charged (Sec 7)

Conversion Rate of Foreign Exchange Rate (Sec 13)

With Amendments by Finance Act, 2076 493

• In the case of a foreign currency of which exchange rate is not prescribed by

Import of Vehicle or Equipment

Temporary Import of Vehicle

494 The Purple Book of Tax

Bonded Warehouse (Rule 9)

With Amendments by Finance Act, 2076 495

(b) Industry exporting its product to third country,

496 The Purple Book of Tax

Terms and conditions to be followed by the industry with bonded warehouse

With Amendments by Finance Act, 2076 497

Special Provision for Garment Industry

Application to be submitted for the release of Bank Guarantee or deposit

498 The Purple Book of Tax

• Government of Nepal may give total duty exemption to be imposed while

Special Facilities to Industry Situated in Special Economic Zone (Sec 12)

With Amendments by Finance Act, 2076 499

Determination of Customs Value of Goods to be imported (Sec 13)

Determination of Custom Value Provisionally (Temporarily) (Sec 14)

500 The Purple Book of Tax

information as required for the valuation of goods,

Process of Import/Export (Sec 17-Sec 23)

Determination of duty prior to arrival of goods at Customs Office (Sec 24)

With Amendments by Finance Act, 2076 501

Export of Software (Sec 25)

Specimen collection and test of goods (Sec 30)

Post Clearance Audit (Sec 34)

502 The Purple Book of Tax

Customs Agent (Sec 51-53)

With Amendments by Finance Act, 2076 503

Qualification for Customs Agent (Rule 37)

Duties of Customs Agent (Sec 53A)

Cancellation and Suspension of Customs Agent License (Sec 55)

504 The Purple Book of Tax

opportunity to such customs agent to defend him or herself.

Fine and Penalty (Sec 57)

With Amendments by Finance Act, 2076 505

506 The Purple Book of Tax

With Amendments by Finance Act, 2076 507

feature, characteristics, measurement, size and quality standard are difference

Review and Appeal

508 The Purple Book of Tax

With Amendments by Finance Act, 2076 509

Rewards (Sec 71 and Rule 47)

Demurrage (Sec 72)

510 The Purple Book of Tax

Remission for the Demurrage (Rule 51)

Refund of Customs Duty or Fine (Sec 75)