Local Units Imposing Unauthorized Taxes on Imported Raw Materials

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Local Units Imposing Unauthorized Taxes on Imported Raw Materials

Om Prakash Khanal

September 20: Some local units have been found abusing the authority given by the Local Level Operation Act 2074. The situation has deteriorated so much that several local units have been imposing taxes on the industrial raw materials that have received customs clearance.

Importers have collected evidences of paying unauthorized taxes that they are forced to pay right from the customs point to the delivery destination. Birgunj metropolis and Jitpur-Simara sub-metropolis collected tax on scrap materials from vehicles carrying coal from Birgunj Customs. Even though the tax on scrap materials cannot be levied on industrial raw materials, the municipality is doing so with the help of contractors.

The local governments in this corridor have sub-contracted the responsibility of collecting taxes on herbs, scrap materials and animals having origin, commercial use, and trading within the respective local unit. A member of the Birgunj Chamber of Commerce said that both these municipalities located in the Bara-Parsa industrial corridor are collecting taxes illegally through their contractors. Businessmen say that such a tax may seem like a headache for businessmen on surface level, but in the real sense the final burden of the tax falls on the consumers.

In Birgunj, a company named Medant Construction holds the contract for collecting such taxes and H&J Traders has the bagged the contract in Jitpursimara sub-metropolitan city of ​​Bara. Both these contractors collect tax contrary to the agreement. On September 2, a truck with registration number JH 10 BA 3274, that passed the customs check from the ICP Birgunj, was initially handed over a receipt of Rs 200 at the local Bahuari Chowk by the employees of Medanta.

The complaint of the importer is that he was forced to pay INR 200 despite receiving receipt of NRS 200. As soon as the truck passed the customs, it was again surrounded by the employees of H&J on the highway at some distance and was forced to pay the money. New Business Age has verified the evidence of the importer paying Rs 200 to the employees of H&J.

The employees of the contractor assigned to collect taxes on the road don’t even write the full number of the transport vehicle in the tax receipt. Only the number of the truck is mentioned in the receipt issued by both the contractors. The alphabet as well is not mentioned with the number.

These contractors, who have received the patronage of the municipal leadership, set up tax collection centers at 13 locations in Birgunj metropolis and various locations in Jitpur-Simara. The contractors stand with bags of receipts to collect taxes at the gates of industries in the industrial corridor. The businessmen complain that the contractors force them to pay tax not only on the raw materials entering the industry but also on the finished goods coming out of the industry. Manoj Karna, head of the Revenue Administration of Birgunj Metropolis says that tax on scrap materials cannot be levied on raw materials. However, extortion in the name of  tax collection continues unabated.


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