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EXIM Code In Nepal (Based on the EXIM Code Procedure, 2078)

EXIM CODE IN NEPAL

EXIM Code In Nepal (Based on the EXIM Code Procedure, 2078)

June 28, 2023 Business, Finance by CA Umesh Rijal

1) What is EXIM Code?

It is a unique number assigned by the Department of Customs for the establishment for the purpose of import and export of goods.

2) What is the structure of EXIM Code?

It is comprises of 13 digits, and 2 alphabets. First 9 digits are the PAN of the establishment, 10th and 11th digits represent whether a single firm or more than one firm are registered under the same PAN (for example, if single firm 1, if two firms 2 … and so on), 12th and 13th digits are the special digits generated by the system, and “NP” after 13th digit shall represent Nepal.

For example; EXIM Code of a firm is 3039034910133NP

First 9 digits 303903491 is PAN,

Next 2 digits 01 represents that a single firm is registered under the same PAN,

Next 2 digits 33 are the system generated code, and

NP represents Nepal.

3) Who can obtain EXIM Code?

Establishments engaged in the export/import of goods can obtain EXIM Code. However, following qualification criteria shall be adhered with by the establishment desirous of obtaining the EXIM Code:

  • Entity shall be registered with an objective of import/export,
  • Minimum paid up capital of NPR. 10 Lakh (however, this shall not be applicable in case EXIM Code is being applied for the purpose of export only),
  • VAT/PAN Certificate, as applicable,
  • No dues are outstanding payable to the government.

4) What are the documents required to be submitted to obtain the EXIM Code?

Application along with the following documents shall be furnished for obtaining the EXIM Code:

  • Copy of the registration certificate and recommendation letter, if applicable,
  • Copy of the certificate supporting that the minimum paid up capital is NPR. 10 Lakh,
  • Copy of the VAT/PAN Certificate, as applicable,
  • Copy of the Tax Clearance Certificate,
  • Bank Guarantee of NPR. 3 Lakh issued by the “A” Class Commercial Banks with a validity of at least 1 year,
  • Recommendation letter, as per the format of Annexure – 2, issued by the “A” Class Commercial Banks where the applicant has maintained the account,
  • Passport size photograph (taken within last 6 months) of the person, proprietor, or the head of the organization.

In case of establishment established for the purpose of export only, documents as mentioned in (b), (e), and (f) are not required to be submitted.

In case of establishments obtaining special EXIM Code, documents as per (b), (e), (d), and (f) above are not be required to be submitted.

In case an exporter (earlier using export EXIM Code only) wishes to obtain EXIM Code for both export as well as import, documents as per (b), (e), and (f) above along with application as per the Annexure – 4 shall be submitted

5) Can Joint Venture (JV) obtain EXIM Code?

JV registered with IRD may obtain EXIM Code by submitting the documents as per 4 above.

6) How the documents should be submitted for obtaining EXIM Code?

Application along with all other applicable documents shall be furnished electronically. However, hard copy of such documents shall be kept safely for any future references.

7) What if there two or more establishments registered under the same PAN?

EXIM Code shall be obtained for each establishment separately. Also, separate bank guarantee shall be furnished for obtaining each EXIM Code.

8) How much time does it take to obtain EXIM Code?

If everything is in order with complete set of documents and bank guarantee, it takes maximum 7 working days to obtain EXIM Code.

9) How to receive/obtain EXIM Code?

EXIM code is generated in the portal of the Customs Department. It may be printed by the establishment itself or collected from the department in hard copy.

10) Does every import/export requires EXIM Code, or are there any exceptions to the requirement of the EXIM Code?

In the following cases, EXIM Code is not required:

  • Personal goods allowed to be carried by the passenger as per the baggage rule,
  • Import of goods worth NPR. 10,000 at a time,
  • Export of goods worth NPR. 10 Lakh at a time.

However, EXIM Code shall be mentioned mandatorily on every import and export by the establishment having already obtained the EXIM Code

11) What are the provisions applicable for the Special EXIM Code?

Following establishment shall be provided with the Special EXIM Code:

  • For the purpose of non – business related import/export by the government agencies/offices, public corporations, government projects, diplomatic agencies, or non – governmental institutions,
  • Import of raw materials, and equipments for the purpose of manufacturing by the micro, cottage, and small industries registered as per the Industrial Enterprises Act, 2076.
  • For the one time import of machineries, equipments, and tools necessary for the establishment of the industry by  industries other than those mentioned in (b) above.
  • Other import or export specified by the department.
  • For the person importing or exporting good multiple time for the purpose of donation, gift, or relief.

No Bank Guarantee is required for the purpose of obtaining Special EXIM Code.

Special EXIM Code obtained as per (c) and (e) above shall automatically be cancelled after the completion of the import.

12) What is the validity of the EXIM Code?

EXIM Code is valid for one year or the period mentioned on the EXIM Code.

13) How to renew EXIM Code?

  1. Application for the renewal of EXIM Code shall be furnished electronically before the start of the fiscal year for which EXIM Code is going to be obtained.
  2. Any industry desirous of renewing the EXIM Code for 5 fiscal years, it may do so by furnishing the entire fees at once and the Bank Guarantee having validity equivalent to the validity of the EXIM Code.

However, Special EXIM Code is not required to be renewed.

14) What are the provisions pertaining to the freezing or cancellation of EXIM Code?

  1. Department or Office may freeze the EXIM Code of a person, having failed to pay the taxes/duty or any other dues to the government, for the 6 months. Information of freezing the EXIM Code shall be provided to the concerned person.
  2. If the person doesn’t request for unfreezing the EXIM Code, department or office may cancel the EXIM Code permanently. However, the opportunity of being heard shall be provided before cancelling the EXIM Code.
  3. Department or office may cancel the EXIM Code of the person who’s been found guilty u/s 57 (1) or 57 (10) or 57 (18) or 57 (5), (7), (8) or (9) of the Customs Duty Act, 2064.
  4. Cancellation of EXIM Code doesn’t put impediment over clearing the goods already arrived in Nepal or en route to Nepal. However, goods shall not be cleared before ensuring the full recovery of any taxes or dues to the government.
  5. In case the Bank Guarantee is expired, the EXIM Code shall automatically be frozen, and freeze status will be released after the submission of fresh Bank Guarantee.
  6. Person may furnish an application for cancellation of EXIM Code obtained electronically. However, such application shall not be made within 1 year from the date of issue of EXIM Code. Further, no EXIM Code or revision of transaction can be made within 1 year from the cancellation of the EXIM Code.
  7. There is no penalty or fees for the cancellation of the EXIM Code not renewed after the expiry of 1 year till the end of the 5th year.

15) When will the Bank Guarantee furnished be released?

  1. An application, within 30 days, may be furnished for the release of Bank Guarantee with reference to the cancelled EXIM Code or amendment/cancellation in the transaction of the business.
  2. Bank guarantee from any other bank may be furnished only at the time of renewal of the EXIM Code.
  3. Bank guarantee shall be unconditional.
  4. Until and unless the department or office releases the bank guarantee, bank issuing the guarantee shall be liable up to the amount of guarantee provided.
  5. Amount of duty, taxes or fees may be recovered from the bank guarantee

** For any services relating to EXIM code and other business related consultancy services do contact us.

byCA Umesh Rijal