Traders of Bishal Bazaar, who were found charging customers 10-12 times higher than the cost price in September, have started lobbying with government officials, saying that they became victim of the structural problem of minimum ‘reference prices’ at the customs.
Six traders have intensified visits to government officials and lawmakers after the Department of Commerce and Supply Management (DoCSM) forwarded investigation files to Metropolitan Police Range Hanumandhoka recently to file cases against them at District Administration Office, Kathmandu under black-marketing act.
Kumar Rajbhandari, president of Bishal Bazaar Byapar Sangh (BBBS), told Republica that they had drawn attention of the Director General of DoCSM Shambu Koirala and some lawmakers toward their concern.
They, however, have not made any formal request to any government bodies so far.
DoCSM has already confirmed that the six traders would be charge-sheeted under black-marketing laws.
This, however, is not the first time that the traders are lobbying with the government officials for the overcharging case. BBBS and other 16 organizations had organized a discussion program in Nagarkot three months ago to draw attention of different government agencies. At the program, they had argued that the traders were not cheating customers saying that importers do not give them ‘real’ bill.
Among others, officials from the Ministry of Finance, Inland Revenue Department and DoCSM, had participated in the discussion.
“Officials of Department of Customs (DoC) and DoCSM clearly know that the problem is the outcome of the existing practice of self-declaration of price of imported goods on the basis of reference price prepared by DoC,” said Rajbhandari. “We were targeted intentionally as traders in other department stores across the country are doing the same.”
Talking to Republica, Koirala said acknowledged that ‘under invoicing’ at customs point was creating problems. “We, however, have to comply with existing laws,” he added.
The Bishal Bazaar traders had even misbehaved with market inspectors at the time of monitoring.
When Republica asked Koirala why other apparel stores were not monitored after the Bishal Bazaar incident, he said: “We know the main problem the minimum reference prices at customs points. Also, importers do not issue genuine bills to retailers,” he added.
Importers also blame minimum reference price at the customs point for the problem. Nayan Bahadur Pandit, president of National Trade Association, said the existing minimum reference price under product-wise system should be scrapped.
Importers say they will make self-declaration at customs point if the government decreases customs tax. Along with customs tax, importers also need to pay 13 percent Value Added Tax (VAT) and 1.5 percent local tax at the customs point. That is why they choose minimum ‘reference price’ to avoid high taxes.
Shishir Dhungana, director general of Department of Customs, however, sees no problem with reference price and self-declaration systems. “They are adopted in developed countries as well. The main problem here is dishonesty,” he added.
DoC has already started maximum retail price (MRP) declaration system for ten different products. It is adding new products gradually.
Officials say the implementation of new Automated System for Customs Data (ASYCUDA) by the end of this year will make importers more accountable.
Under the new system, customs offices will have direct networking with IRD. Officials say self-declaration made by importers will be recorded and later compared with their sales prices.