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Sat, June 22, 2024

Federations linked to Gold, silver industry urge govt to revoke customs duty hike on gold imports

B360
B360 June 10, 2024, 3:21 pm
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KATHMANDU: Three organisations associated with the gold and silver trade have urged the government to revoke the decision to increase the customs duty on gold imports.

A joint team from Federation of Nepal Gold and Silver Dealers' Association (FENEGOSIDA), Federation of Nepal Gold Silver Gem and Jewellery Associations (FNGSGJA), and Federation of Handicraft Associations of Nepal (FHAN) met with Finance Minister Barsha Man Pun on Friday. They discussed the government's announcement in the budget for the fiscal year 2024/25 about the customs duty on gold imports. The representatives of the organisations objected to the increase in customs duty on gold imports from 15% to 20%.

Finance Minister Pun stated that he has taken the concerns of the gold and silver entrepreneurs seriously and will take necessary steps to address the issues raised by the businesspersons. 

During the meeting, Ranendra Baraili, lawmaker and advisor to FENEGOSIDA, informed Minister Pun about the negative impact of the increase in the customs rate on businesspersons.

In the meeting, FENEGOSIDA President Manik Ratna Shakya expressed serious concern from the three organisations about the increase in customs duty on gold. "Last year too, the government increased the customs duty on gold imports through the Customs Tariff Bill, 2080," he said and added, "In the current situation where it is challenging to compete in the global export market, the sudden increase in the customs rate without consulting the business association has created a significant problem in the entire gold and silver trade."

FENEGOSIDA Senior Vice President Arjun Rasailee stated that according to various studies, more than 20,000 gold and silver traders in Nepal are involved in this business, and more than 200,000 jobs are directly or indirectly linked to this business. While the state has been earning billions of rupees in revenue from this business every year, this business should be able to compete with the global market and its prices. However, the government has suddenly increased the annual customs rate without consulting and agreeing with the business. 

FNGSGJA President Kishan Sunar said that although it was expected that the limit of gold to be imported under the provision of Jhiti-Gunta would be increased, the budget for the fiscal year 2024/25 has further reduced it. He suggested that the limit of customs exemption should be increased to 50 grams (gm) and for more than that, with the mention of the source of foreign currency, should be allowed to bring up to 300gm. 

In the context of 20% customs duty applied on raw gold import, if more customs duty should be applied on import of prepared jewellery, since only 9.5% is maintained when importing from SAARC nation, it can lead to excessive gold jewellery import, on the one hand, it can be seen that due to low customs duty for the nation, annual loss of billions of rupees may occur. On the other hand, it seems that millions of jobs provided directly and indirectly by the gold and silver business sector within the country will be lost. 

Similarly, while 15% duty is imposed on raw silver, the import of prepared silver jewellery is less than 6% and 10% respectively (within SAARC nation or from outside countries) and this also has a massive negative impact on the customs revenue for the nation and the employment of local smiths. It seems necessary to maintain a minimum customs duty of 25% on gold jewellery import and a minimum of 20% on silver jewellery import. Also, luxury tax has been imposed on valuables, which is not relevant in the current situation.
  
They request not to take away the livelihoods of ordinary businesspersons without taking their demands seriously and not to violate the rights of consumers to use gold jewellery at an affordable rate of gold according to the competitive market.
The representatives of gold and silver businesspersons also said that if their demands are not addressed, they will be obliged to stage sit-ins.

During the meeting, President Shakya, Senior Vice President Rasailee, Second Vice President Diyesh Ratna Shakya, Treasurer Susip Shrestha and Secretary Kiran Bhai Bajracharya participated on behalf of FENEGOSIDA. Similarly, FNGSGJA President Sunar, First Vice President Dwarika Bisworkarma, General Secretary Nir Bahadur BK, Treasurer Ganesh Biswokarma and FHAN President Prachanda Shakya and others were present at the meeting.

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