Local Units Imposing Unauthorized Taxes on Imported Raw Materials

September 20: The local levels have been found abusing the authority given by the Local Level Operation Act 2074. The situation has deteriorated so much that every local unit has 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 through contractors.

The local government has sub-contracted collection of taxes on herbs, scrap materials and animals having origin, commercial use, and trading within the local unit. However, an official 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, but the final burden of the tax falls on the consumers.

In Birgunj, a company named Medant Construction holds the tax contract and H&J Traders has the contract in Jitpursimara sub-metropolitan area 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 coal check from the ICP Customs of 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 found the evidence of importer paying Rs 200 to the employees of H&J.

The employees of the contractor assigned to collect money 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. 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. At the gates of industries in the industrial corridor, contractors stand with bags of receipts to collect taxes. The businessmen complain that the contractor's employees force 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 Revenue Administration of Birgunj Metropolis says that tax on scrap materials cannot be levied on raw materials.