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Export to Nepal

Jaideep Saklecha (CA IPCC NOV. 2011) (30 Points)

03 June 2010

i want to know about that if we are exporting goods to nepal so it will be treated as exports sales or not.

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CA. Dashrath Maheshwari (TaXpert) (15103 Points)
Replied 03 June 2010

Export to Nepal is governed by special procedure provided in notifications issued under Rule 12 & 13. The procedure is as explained below

Notification no. 47/94-CE(NT) dated 22.9.94 – payment of rebate to His Majesty’s Government of Nepal.

Goods for export to Nepal are to be cleared from the registered factory on Nepal Invoice prepared in quadruplicate and marked ‘For Export to Nepal’ on payment of duty.

The Nepal Invoice is to be presented along with the goods to be exported before the Central Excise officer.

The Central excise officer shall verify the goods and seal the packages with the Central Excise seal. After making necessary endorsement on the Nepal invoice to this effect, he will hand over the original copy of the invoice to the exporter. Duplicate and triplicate copies of the Nepal invoice after being put in a sealed cover are handed over to the exporter for giving the same to the Customs officer incharge of the Land Customs Station, mentioned on the invoice and through which the goods are to be exported to Nepal.

On arrival at the Land Customs Station, exported goods are to be presented to the Customs officer along with the original copy of the Nepal invoice and sealed cover containing duplicate and triplicate copy of invoice. The Customs officer incharge, after verification of the goods with the invoice makes an endorsement on all copies of the invoice. The original copy is handed over to the exporter and the duplicate and triplicate copies are sent directly to the Nepalese Customs Officer incharge of the check post through which the goods are to be imported into Nepal.

The Nepalese Customs officer will return the duplicate copy of the invoice after endorsement regarding verification and allowing import into Nepal, to the Customs officer incharge at Indian Land Customs Station who is to forward the same to the Deputy Director of Inspection, Customs and Central Excise, Nepal Wing, for grant of rebate to His Majesty’s Government of Nepal.

Notification no. 51/94-CE (NT) dated 22.9.94 as amended – procedure for export to Nepal and Bhutan without payment of duty.

Export under bond without payment of duty to Nepal and Bhutan is subject to the following conditions

the payment for goods shall be in freely convertible foreign currency; and
the importer shall open an irrevokable letter of credit in favour of the exporter in India before the export takes place, subject to certain conditions prescribed in the notification.

The exporter is required to execute a bond under Rule 13 before the Assistant Commissioner of Central Excise having jurisdiction over the factory of the manufacturer or any other place from where the goods are to be exported and is required to furnish a certificate in Appendix 1 to the said notification from the Reserve Bank of India or any other bank duly authorised to deal in foreign exchange showing that full payment has been received.

On receipt of the said certificate and on completion of the conditions of the bond, the exporter shall be discharged of his liabilities under the bond. Capital goods are permitted to be exported to Nepal against any global tender invited by His Majesty’s Government of Nepal and the payment for which is received in the Indian currency, without payment of duty, subject to the condition that the exporter executes a bond and furnishes a certificate duly signed by the concerned Bank of India that full payment has been received in Indian currency by the said bank.

On receipt of such certificate and on completion of the conditions of the bond, the exporter is discharged of his liabilities under the bond.

The exporter is required to follow the procedure as provided in Appendix 2 to the said notification. The procedure is explained below

The exporter is required to make 6 copies of the invoice as prescribed in Annexure-A to the notification and make the following declaration on the same:

" I/We declare that the goods entered herein are intended for export to Nepal/Bhutan in bond, and shall not be diverted or delivered en route to any other country".

The exporter shall present all the 6 copies of the invoice duly filled in along with the goods before the proper officer of Central Excise. The proper officer after verification of the goods and sealing them would make an endorsement on all the copies of the invoices.

The original copy of the invoice is given to the exporter. Duplicate, triplicate and quadruplicate copies under sealed cover are given to the exporter for delivering the same to the Customs officer incharge of the Land Customs Station through which the goods are to be exported. The quadruplicate copy is forwarded to the Central Excise officer who has accepted the bond and quintuplicate copy is retained by the proper officer.

On arrival at the Land Customs Station, the goods are presented before the Customs officer incharge along with original copy of the invoice and the sealed cover containing copies of invoices.

The Customs officer, after verification of the goods with the invoices would make the endorsement on the invoice and hand over the original copy to the exporter. The duplicate and triplicate copies are sent directly to the Nepalese or Bhutanese, as the case may be, Custom officer incharge Land Customs Station through which the goods are to be imported into Nepal or Bhutan.

The Customs officer incharge of Land Customs Station at Nepal or Bhutan will return the duplicate copy of the invoice, after making an endorsement thereon regarding verification and allowing of import into Nepal or Bhutan, directly to the Customs officer incharge Land Customs Station in India.