Under the Foreign Exchange Act (1962) and Rules (1963), exports are permitted only against advance payment or Letter of credit (L/C) to ensure that the payment for the goods is received in Nepal. Therefore, At the time of export, the exporter, in the foreign exchange control form (BBN 1) of Nepal Rastra Bank (NRB), is required to declare that the export earnings will be repatriated to Nepal within six months in case of transactions under L/C.
There is no limit on advance payment but the buyer has to remit the foreign exchange through a bank or has to exchange foreign currency with a bank in Nepal. The bank issues a certificate of advance payment to the exporter, which needs to be produced at the Customs at the time of export.
Primary documents required to Export from Nepal
1. Firm Registration Certificate from Department of Commerce (One time submission)
2. Registration Certificate from Department of Industry (Pvt. Firm/Partnership/Company) (One time submission)
3. Registration Certificate from Department of Cottage and Small Industry (Firm/Company) (One time submission)
4. Registration Certificate from Company Registration Office (Public/Private) (One time submission)
5. Registration Certificate from Department of Income Tax (One time submission)
6. Registration Certificate from Department of Value Added Tax (One time submission
7. Registration Certificate from Permanent Account Number #(One time submission)# (PAN is sufficient and Income Tax and VAT certificate is not required if the PAN is submitted.)
8. Certificate of Origin (CO) or Generalized System of Preferences Form A (GSP) where applicable
- CO can be obtained from Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Confederation of Nepalese Industries (CNI).
- For GSP, an exporter has to fill in a separate standard document called GSP Form A. The form has to be stamped and certified by the Nepalese Customs at the time of export provided the product is eligible for the tariff preference under the GSP scheme of the destined preference giving country. The Trade and Export Promotion Centre (TEPC) issues the GSP Form A to exporters. Click here to find out about the procedure of getting GSP in Nepal.
9. Nepal Customs Declaration
10. Authority of Customs Agent
12. Packaging list
13. SPS/TBT/Quarantine certificates
14. Other product specific document/export licence if applicable (e.g. valuation of certificate of handicraft, archaeological certificates, clearance certificate for export of plants and forest products, etc.)
Exporting to India
Clearance at Nepalese Customs
- In addition to the primary documents, the Customs Agent/Clearing Agent (CA) has to submit the following documents at the Customs offices at the border.
1. Foreign exchange declaration form No.1 of NRB (optional)
2. L/C or certificate of advance payment (optional)
3. Recommendation letter from the Inland Revenue Office (IRD), if product is subject to excise duties.
- The CA submits the Customs Declaration to the Customs Server through the terminal provided in the Customs Office. After the submission, the CA receives the Registration Number which needs to be attached with the all necessary supporting documents.
- After the consignment is checked and verified with related documents, the Nepalese customs officer endorses the Nepal Customs Declaration. The CA needs to pay the custom charges after a clearance for export is provided to move the cargo to the Indian border.
Exporting to third country via India
a. Certificates for exports
For transit trade through India, in addition to the documents and certificates required when exporting to India, various additional documents/certificates listed below are required where applicable. GSP is required instead of COO for overseas exports where the provision of GSP is available.Click here to find out about the procedure of getting GSP in Nepal.
- b. Clearance at Nepalese Customs
- CA has to submit the following documents to the Nepalese Border Customs:
1. Bill of lading
2. Customs Transit Declaration (CTD)
3. Foreign exchange declaration form No.1 of NRB
4. L/C or certificate of advance payment
- The CA submits the Declaration to the Customs Server through the terminal provided in the Customs Office. After submission, the CA receives a Registration Number, which is then attached with all necessary supporting documents.
- ·After the consignment is checked and verified with related documents, the Nepalese customs officer endorses the CTD.
- After the payment of customs charges, the CA is given a clearance to export and move the cargo to the Indian border.
Exporting to third country via Bangladesh
- The Nepalese exporters/importers have to complete all the documentation formalities set by the transit agreements of both India and Bangladesh. The CTD in India and the Transit Declaration Invoice (TDI) in Bangladesh are processed separately. The cargo has to cross through Panitanki (India) and Phulbari (India) Customs before entering Bangladesh.
- All documents are carried by the Transport Drivers and handed over to a CA in Bangladesh. The Government of Nepal has appointed the Nepal Transit and Warehousing Company Limited (NTWCL) as an authorized CA to clear imports and exports at Kakarbhitta and Phulbari on behalf of Nepalese exporters and importers.
- At the Bangladesh Border, the CA has to produce, six copies of TDI with invoice and packing list to Customs. The Customs endorses all copies of TDI after having completed the inspection which is subsequently endorsed by the carrier. The original copy is retained at the Customs at the border, 2nd and 3rd copies are handed over in a sealed cover to the railway guard or truck driver to be delivered to the exit Customs and remaining three copies to the CA.
- On arrival of the cargo at the Port of exit, the Port Customs will compare the 2nd and 3rd copies of TDI received from the rail guard or truck driver with the three copies along with Railway Receipt (RR) produced by CA and also check the seals on the rail wagon or truck. After necessary verification by the Customs, entries are made on all TDI copies, the goods are cleared for shipment. The quadruplicate copy is retained by the Port Customs for ultimate submission to the Customs House and 3rd copy is send back by registered post to the border entry Customs Office. The remaining three copies including 2nd are handed back to CA.
- ·After necessary clearance by the Port Customs, the CA pays port the due amount and obtains port clearance before handing over the cargo to the Ship's agent inside the port.
Exporting to Bangladesh
According to the Protocol to the Trade and Payments Agreements between Nepal and Bangladesh, with regard to the points of entry, exit procedures, storage and other related facilities for bilateral trade between Nepal and Bangladesh, the points of entry, exit, procedure and facilities stipulated in the Protocol to the Transit Agreement signed between Nepal and Bangladesh for Nepal’s trade with third countries shall apply mutatis mutandis.
Exporting by Air
An exporter or CA has to with complete documents for customs examination and clearance. The following documents are required for submission to Tribhuvan International Airport (TIA) Customs:
1. BBN 1 of NRB
2. Bill of lading/Airway bill/delivery order
3. L/C or certificate of advance payment
- After the export cargo has been examined against the documents, the Customs seals, and cleared for storage. NTWCL accepts cargo for storage only after customs clearance.
- NTWCL allows 7 days free time on rental charges but goods are still liable to the handling fee, which is based on weight of the cargo. For gold and silver handicrafts, a different rate has been fixed.
- A separate form as prescribed by NTWCL is to be submitted by an exporter or CA to obtain permission for the storage of cargo.
The US Trade of Products listed in Trade Facilitation and Trade Enforcement Act of 2015 (“TFTEA”) provides duty-free treatment for 66 products from Nepal that meet specific eligibility criteria.