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Search, Seizure, Audit, Rewards

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Chartered Nepal,

Last Updated: 2023-01-19

 

a. Power to ask for proof, Evidence or Receipt. (to control evasion of duty)

Any Employee of customs may ask any person to furnish an evidence showing the payment of customs duty of goods or exemption.

Reasons -

1. Reasonable reason - Goods are I/E or going to I/E without payment of duty

2. Knowledge - Goods are I/E without payment of duty



Duty of the person - to show such evidence and proof.



If not shown or not satisfactory - such employee to produce such goods before the customs officer, the customs officer shall issue order to withhold goods and take necessary action.



b. Power to Capture goods and vehicles

  • Who ? Employee of customs
  • When ? Any person has or is going to I/E goods through any other routes than prescribed

Such employee shall capture goods and vehicle and produce before the customs officer.



c. To Search any person or motor vehicle

  • Who ? Any employee of customs
  • When? Reasonable ground or reason to believe or there is a suspicion that - a) Brought any goods without payment of duty. b) has or going to Smuggle and I/E goods c) has or going to import or export restricted goods.

If upon search, the person is asked to produce the Pragyapan Patra of payment of duty and the person cannot - Shall be deemed as import or export smuggling.



d. To search any House, Building, Warehouse, Place

  • Who? DG or concerned customs officer
  • When ? Reasonable doubt that a. hidden goods by evading customs duty b. hidden or kept any goods brought by way of import smuggling.
  • Notice - Accompanied by the reason to the owner or the person residing. If refuses to acknowledge, notice to be affixed in a manner conspicuous to all.
  • Witness - Ward chairperson or ward member of the concerned VDC/municipality or an employee of any office, house owner or agent, any person having attained the age of 16 years, if no such person is found or refuses to witness - make the search by executing a memo of remarks to the effect and sign it.

E. Seizure

  • Take goods into custody.
  • prepare inventory and deliver to the concerned person of the house.
  • produce the goods and inventory to the concerned person.

F. Power to arrest

in case found to have committed offence. has committed or is going to commit import or export smuggling.



G. Rewards

Furnishing information about attempt to smuggle goods15% of value received from auctionPro-rata if more than one person
Seizing only goods being smuggles20% of value receive from auctionPro-rata if more than one person
Seizing and producing both goods and person30% of value received from auctionPro-rata if more than one person

If there is no auction, value shall be determined through a prescribed committee.

For gold, silver or ornament - lower of 10% of value from auction or 10,00,000 in all cases (information, goods, goods+ person).

No reward if the informer does not comply with the provision of customs regulations. Customs office shall not provide the details of informant except in course of investigation by a body or court.

7. Post Clearance Audit

Post clearance audit shall be completed within 4 years after the date of clearance of goods. In case lesser amount is paid by falsifying records, may be conducted any time. Re-audit may also be conducted, time limit for original audit shall be taken into account.



Records to be verified

  • Books relating to purchase,
  • Books relating to import
  • Books relating to sales
  • Records, Books, other documents
  • Bank records
  • computer system
  • other records related to business

Documents and information , bank account info, balance sheet and PL and other similar documents may be sought from third parties like banks.



Documents relating to import shall be retained for 4 years.



Difference in Transaction Value or sub-heading of classificationDuty to be recovered + 100 % of such duty as penalty
Difference in goods from the declaration (Pragyapan), Lesser quantity than I/ERecover duty + Penalty as per section 57
Imported without declaring model, brand size, measurement, unit , manufacturer5% of value of goods as penalty. If impossible to declare - No Penalty
Imported goods under duty exemption not used for the purpose or not by the concerned personAs per section 57 i.e. 100% of value of goods
Inconsistency in the size, name and measurement of goods in the Pragyapan Patra or other import related documents with the purchase register, sales invoice5% of the value of goods

Procedure after audit -

Show cause notice to defend within 15 days from receipt of such notice. Assessment order shall be passed, Additional duty to be paid within 35 days from the receipt of final order, if not paid in time - 15% interest. Can freeze property if not recovered to be recovered as government debt.

Income Tax

Published By

Chartered Nepal

Category : Income Tax

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