NCC submits draft credit recovery bill to industry minister

KATHMANDU: Nepal Chamber of Commerce (NCC) has submitted a preliminary draft of proposed legislation, 'Commercial Credit Recovery, 2083', to Minister for Industry, Commerce and Supplies, Dipak Kumar Shah. 

A delegation led by NCC President Kamlesh Kumar Agrawal presented the proposal on Wednesday to address long-standing commercial credit recovery issues across the industrial and business sectors.

Explaining the rationale, NCC President Agrawal stated that "delayed payments for goods and services sold on credit exert heavy pressure on the working capital of industrialists and businesspeople, impair cash flow, and impede business expansion."

Under the proposal, sales invoices would act as the legal foundation for contracts. Buyers must pay at the time of purchase or within the credit period indicated on the invoice. If unstated, payments and quality checks must be completed within seven days of delivery, returning items within this timeframe if they fail to match specifications.

The draft proposes establishing Commercial Credit Transaction Recovery Committees at both federal and provincial levels to investigate complaints and facilitate consensus within a month. These committees would hold powers to freeze dividend payments, halt tax adjustments, summon parties, and seek police assistance.

Disputing parties must approach a committee before initiating court proceedings. If unresolved within thirty days, sellers can escalate claims to the district court without incurring fees. Courts must settle cases through summary procedures within thirty days and can freeze buyer assets. The legislation strongly encourages mutual settlements, though defaulting on agreed instalments automatically revokes any prior waivers.

The sellers could claim unpaid value added tax (VAT) as a credit in subsequent periods and deduct unrecoverable credit as bad debts from taxable income, provided claims involve official tax invoices. The NCC noted this legal solution is essential to ease cash flow and relieve businesses from the financial burdens of prolonged legal disputes.