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Export to Nepal

Jeevesh Mehta (Advocate- Corporate Commercial & Indire) (861 Points)

26 March 2009

Please guide,

What is the procedure for recieving payment from Nepal in case of Export to Nepal.

Can we recive it in Indian Rupees. ?

Refer: Asian Developemet bank, Asian Clearing union Mechanism, Noti: 45/2001 EX NT

Regards

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15 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 27 March 2009

Yes. Rupee trade is allowed with Nepal.

When you export goods to nepal under rupee trade, no export benefit or rebate of goods are permissible, in fact the goods has to be exported after payment of duty. Rebate is granted to the Government of nepal.

However, when you export goods to nepal and recieves payment in convertible foreign exchange, goods can be exported without payment of excise duty, under bond under Notification 45/2001.

HS Negi (Senior Executive- F&A) (590 Points)
Replied 28 March 2009

SIr,

Regarding i wish to ask you, If we are a trader and got a order from the buyer of NEPAL. Can we send the the material on a trader invoice. Are there any formalaties from the Excise Deptt for sealing purpose. Please advice me with authority.

Regards

Harendra Singh Negi

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 29 March 2009

There is rupee trade with Nepal. Hence export benefits, including excise duty free clearance is not allowed to Nepal. Rebate is granted to the Government of Nepal, and procedure prescribed is through Nepal Invoice. However, if the exported is receiving payment in convertible foreign exchange, clearance under bond is allowed. This facility can be availed by merchant exporter also. probably you are asking a simple trader invoice, i.e. goods are not being cleared from manufacturer's premises. Off course the goods can be exported, however the goods may suffer duty again while entering nepal in form of duty imposed by Nepalese Government. Goods cleared on Nepal Invoice gets preferential treatemnt in Nepalese Custom Law.

John Philip (Trade Consultant) (47 Points)
Replied 08 September 2009

Originally posted by :Rajesh Kumar
"	There is rupee trade with Nepal. Hence export benefits, including excise duty free clearance is not allowed to Nepal. Rebate is granted to the Government of Nepal, and procedure prescribed is through Nepal Invoice. However, if the exported is receiving payment in convertible foreign exchange, clearance under bond is allowed. This facility can be availed by merchant exporter also. probably you are asking a simple trader invoice, i.e. goods are not being cleared from manufacturer's premises. Off course the goods can be exported, however the goods may suffer duty again while entering nepal in form of duty imposed by Nepalese Government. Goods cleared on Nepal Invoice gets preferential treatemnt in Nepalese Custom Law.	"

Dear Sirs,

I beg to differ and please refer tthe Excise Circular no. Circular No. 810/7/2005-CX
1st March, 2005,

Quote

It may be seen that the notification No. 45/2001-CE (NT) does not differentiate in the procedure on the basis of the status of the exporter and hence, no need was felt to mention the terms ‘merchant- exporter’ or ‘manufacturer-exporter’ in the said notification".

Above is self explanatory which says there is no diff between type of exporters

and you can export without payment of duty. Manaul isNOT clear on this. but the Circular makes it clear

Bhavin (JOB) (23 Points)
Replied 11 September 2009

Sir,

Can a SEZ unit export goods to Nepal ? Can this unit raising Invoice in Indian Rupee? Will this export be counted in arriving at +VE NFE?

Please suggest.

John Philip (Trade Consultant) (47 Points)
Replied 11 September 2009

Procedure Cargo should be sealed by SEZ officers before it leaves SEZ unit

and free shipping bill has to passed exit port for clearance.

Rupee Invoicing is allowed fro Export to Nepal/Bhutan.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 17 September 2009

Well John- under Central Excise, whenever anything is to be exported- by a manufacturer or a merchant exporter- ARE-1 or ARE-2 or Nepal Invoice has to be made in the factory itself. Whenever export is done from outside the factory or export warehouses appointed under Rule 20 of the Central Excise Rules, no export benefit, under Central Excise, can be taken.

Thus even when merchat exporter has to export, for excise benefit nepal invoice from manufacturer premises is required for excise benefit purposes.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 17 September 2009

Goods can be exported to nepal in Indian rupees, however it will not be counted for net foreign exchange earning.

John Philip (Trade Consultant) (47 Points)
Replied 17 September 2009

AS per the FTP rupee invoiceing allowed for Export to Nepal and Bhutan, and they are counted for Export benefit also.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 17 September 2009

Intresting point.

At no place Foreign Trade Policy says that no benefits shall be available for export to Nepal/Bhutan. Special provision has been made for rupee trade with Russia (Annex 11 of Handbook of procedure), however no such provision is there for rupee trade with Nepal/Bhutan.

FTP takes case of this by adding provision of free foreign exchange earning, in case of value addition required, EOU (para 6.5 of FTP), duty credit scrips based on free foreign exchange earning etc. Thus export to Nepal in rupee payment shall not be entitled for any of these benefits.

John Philip (Trade Consultant) (47 Points)
Replied 18 September 2009

Refer Para 2.40 of FTPolicy 2009-20014

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 18 September 2009

That para has nothing to do with export benefits we are talking about.

Foreign trade policy governs export & import, and hence governs the export to nepal also. Therefor the para makes provision for denomitation/contract also with nepal. But that does not mean export to nepal will get export benefits.

John Philip (Trade Consultant) (47 Points)
Replied 19 September 2009

Mr. Kumar,

I beg to differ, these things i am executing routine basis for my clients.

All the points which i states are self explanatory.

Anil Garg (Manager Taxation) (21 Points)
Replied 10 April 2010

Sir,

In case of a manufacturer exports the goods to Napal from Excise Free Zone (H.P.) then what is the options/eligibility to take to exports benefit /incentives like.........

1. DEPB/DDB licence?

2. Adjustable against Advance licence/EPCG licence obligations or not?

3. Any other export benefit ?

What is the procedure to get these benefits in case of payment received in USD or In Indian Rupee?