(Last updated: 27 Apr 2011)

Business etiquette

Please note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers 

Tariff

Prevailing customs duty rates vary from item to item and can range from zero per cent to 130 per cent.

An agricultural reform fee of 10 per cent of the imported value is levied on agricultural products.

The prevailing exports service charge is 0.5 per cent but some industrial items, such as vegetable ghee and plastic goods, are liable for export duty of three per cent or two per cent.

Excise and custom duties, levied on raw materials utilised by an industry for production of goods for export, are reimbursed after the goods are exported.

The customs duty levied on goods imported to produce exportable industrial goods is also reimbursed after the goods are exported.

A countervailing duty is levied on goods imported to Nepal from foreign countries. This duty is equivalent to the excise duty chargeable on similar goods produced within Nepal. A rate of 1.5 per cent of the imported value is levied as a local development fee.

Non-tariff barriers

Import restrictions

The Export/Import (control) Act of 1956 permits businesses registered in Nepal to import a range of goods, except goods which are either fully or partially prohibited.

Products banned from import include:

• products injurious to health, including narcotic drugs and liquor containing more than 60 per cent alcohol
• arms and ammunition and explosives (except under import license of His Majesty's Government)
• communications equipment (except under import license of His Majesty's Government)
• valuable metals and jewellery (except permitted under bag and baggage regulations)
• beef and beef products
• any other product notified by His Majesty's Government in the Nepal Gazette

Product certification

Special certificates

Livestock imports must be accompanied by a sanitary certificate issued by an approved authority in the country of origin and must be certified by an approved organisation.

Plants, plant products and leaf tobacco require phytosanitary certificates issued by an approved authority in the country of origin and certified by an approved organisation.

Leaf tobacco must be accompanied by a special certificate stating that the tobacco is free from ephestia elutella or that the pest does not exist in the country of origin.

Used clothing is restricted.

Port wine requires a certificate indicating alcoholic content.

Spirits may need a certificate of maturity.

Methods of quoting and payment

Quotations are usually required to indicate FOB or CIF prices, with freight and insurance charges separately shown. This should be expressed in foreign currencies. Quotes to government agencies should be both FOB and CIF. Payment is normally by irrevocable letter of credit.

Documentary requirements

Commercial invoice

No prescribed form listed. A minimum of six copies are required by the bank and must be signed by the supplier in exporting country. The invoice must show the following details:

• name and address of exporter and consignee
• delivery address
• transport details
• buyer's name and address (if other than importer)
• country of origin
• terms of delivery and payment
• shipping marks (container no.)
• number of packages and description of contents packages (eg. goods description, commodity code, gross weight, packing details, quantity, unit price, amount)

Certificate of origin

Issued by local chamber of commerce. Three copies are normally required.

Bill of lading

Minimum of three original copies required. Non-negotiable copies as required by the bank (6-7 copies).

Freight charges can be prepaid or payable at destination (CIF or FOB).

Quantities must be indicated in metric terms as well as on a weight basis.

Import reference number and letter of credit numbers are to be shown.

Must indicate the name and address of the applicant and the issuing bank.

Packing list

Compulsory.

Taxation

Value Added Tax (VAT) is levied on all goods and services, except exempt items, and is a flat rate of 10 per cent. Firms who import goods valued at more than Rs10,000 at a time and Rs200,000 a year, need to be registered for VAT. It is collected at every stage of the sale of goods and services. A VAT registrant may claim an input tax credit.