So far, traders were not required to register with DoC. They were allowed to carry out import-export activities by merely after submitting firms´ registration, PAN, VAT and other related documents.[break]
“This might seem like yet another procedural hassle. But registering their businesses at DoC will ease their operations. Once they get their individual IDs, they will not be required to repeatedly submit documents proving authenticity of their firms,” said Tanka Mani Sharma, director general of DoC.
Once registered, the DoC will issue each trader a customs ID bearing a unique number, and they could, thenceforth, be able to carry out all their customs related transactions by producing it at the customs offices.
“This will facilitate customs officials as well because they will not need to cross-check the documents for authenticity,” Sharma stated.
As the customs offices across the country are linked with central software and database, customs officers can access the details of the party importing or exporting goods on their computers. The officials will enter their consignment and other transaction details, including total duties paid by the trader.
On the one hand, this will raise the efficiency of the customs offices and on the others traders will not need to submit the same documents every time they transact through the customs offices, said Finance Secretary Krishna Hari Baskota.
Sources at the MoF, however, said trade facilitation is not the only motive behind adoption of the new system.
“It will also help the government keep track of the transactions conducted by importers and exporters and plug revenue leakage,” said the source.
In fact, DoC had recommended the new system mainly after the Inland Revenue Department (IRD) reported that a larger number of trading firms registered for carrying out export-import businesses were never filing their transaction details and tax liabilities at the Inland Revenue Offices. And because there is a lack of harmonized record keeping system, IRD never can dig out if the firms registered actually carried out exports and imports.
“The volume of non-filers were high and in the absence of effective cross-checking mechanism, we realized unscrupulous traders could easily register new firms and carry out import and export businesses and vanish from the market without paying income tax and VAT,” said an IRD official.
However, DoC officials said they will need some time to implement the new system because they are yet to complete necessary formalities.
“We are in the process of formulating necessary directives and guidelines to implement the new system,” said Sharma. Once such basic works are done, which officials are hopeful to complete within a month, officials said they will instantly notify the traders to register themselves with the DoC.
DoC´s plan is to issue registration ID for a year and renew them once every year, depending on their tax and other compliance records.
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