Traders Flag Penalties, Delays Under New Automated Customs Valuation System

The government’s newly introduced automated customs valuation system, aimed at making import–export procedures more transparent and systematic, has begun drawing complaints from traders over valuation discrepancies, technical glitches and inconsistent implementation.

The system was formally launched from the Biratnagar Customs Office in early October as part of a broader customs reform drive and was extended to the country’s largest customs point, Birgunj, within about a month.

According to Director General of the Department of Customs Shyam Prasad Bhandari, the online valuation system has replaced the long-standing reference price mechanism at all customs offices where the Automated System for Customs Data (ASYCUDA) system was operational. Under the new arrangement, customs valuation is carried out by analysing a database of transactions from the past three months, using the invoice value submitted by importers as the primary reference.

“The objective is to make valuation automated, data-driven and transparent,” Bhandari said, adding that importers and their representatives must also adapt to the new system.

Read: Govt Implements Transaction Value-Based Customs Valuation System Nationwide

 Traders, however, say there is often a significant gap between the invoice value they submit and the valuation generated by the system. They argue that the three-month database currently in use is itself based on the old reference price system, resulting in inflated assessments that fail to reflect actual transaction values.

Due to these discrepancies, traders say customs offices have imposed fines of up to 100 percent under the Customs Act by adding value to the declared price. Business groups claim that despite Finance Minister Rameshore Khanal’s public directive to recognise invoice values, customs offices have not fully implemented the instruction in practice.

Senior Vice-President of the Birgunj Chamber of Commerce and Industry Madhav Rajpal said questioning invoice values and imposing penalties despite proper documentation is not business-friendly. “Valuation based on limited and incomplete data is causing injustice to traders,” he said, also pointing to variations in enforcement across customs offices despite the same system being applied nationwide.

Trader Anoj Rungta said that while the new system is positive in principle, it has slowed down clearance processes. “Tasks that earlier took one day are now taking up to two days,” he said, citing server outages and system congestion that have increased both time and costs.

Read: Government Launches Automated Customs System at Birgunj

Birgunj Customs Agents Association President Rajman Tamang said the outdated database has prevented invoice values from being fully recognised. “Even when goods are imported at actual market prices, importers are being forced to pay penalties,” he said, adding that some traders have been compelled to revert to reference-price-based invoicing.

Sandeep Agrawal, former president of the Birgunj chapter of the Nepalese Young Entrepreneurs’ Forum, alleged that despite being labelled an online system, valuation decisions remain discretionary. “Producers’ invoices should be recognised in practice, but final decisions still appear to depend on individual officials,” he said.

While traders broadly agree that the automated valuation system aims to promote transparency and trade facilitation, they say outdated data, technical problems and a lack of uniform implementation have prevented it from delivering the desired results. Stakeholders have stressed the need for regular database updates, consistent application of rules and continuous dialogue between customs authorities and the private sector.

Ashok Kumar Temani, President of the Madhesh Province chapter of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said the system has made customs procedures easier, faster and more technology-friendly.

“Online declarations have helped save time and costs while reducing the risk of arbitrary valuation,” he said, but emphasised the need to strengthen grievance-handling mechanisms and ensure regular system updates.

President of the Birgunj Chamber of Commerce and Industries Hari Prasad Gautam said some initial problems were inevitable. “Once the system stabilises, revenue collection will become more organised and realistic,” he said, urging both customs officials and traders to act responsibly and in good faith.