The Ministry of Commerce and Supplies (MoCS) last week proposed flat charge on CoO for exportable goods and voluntary provision on getting CoO on goods that are exported under Generalized System of Preferences (GSP) to Europe and the US.[break]
Under the new provision, the government reserves the authority to grant permission of issuing CoO to business bodies other than the Federation of Nepalese Chamber of Commerce and Industry (FNCCI).
The FNCCI, Nepal Chamber of Commerce (NCC), and Confederation of Nepalese Industries (CNI) that have been issuing CoO for Nepali exports are opposing the new provision that is expected to limit their income source.
As per the existing provision, exporters have to pay 12 paisa per Rs 100 worth of exports as CoO charge. Of the amount, concerned commodity organizations and bi-lateral chamber of commerce get two paisa and one paisa respectively.
Exporters, however, have welcomed the voluntary provision for CoO, as most of the importer countries are not demanding the origination certificate any more.
The country exported goods worth Rs 60 billion during fiscal year 2009/10.
“At a time when the government has announced special incentives for exporters, umbrella business organizations are discouraging exports by making CoO provision compulsory,” said Uday Raj Pandey, president of Garment Association of Nepal.
“Products that are traded under bilateral agreement and garment exported to the US are the only products that require CoO.”
Pandey further said the government has to adopt trade policy as per the World Trade Organization´s rule of origin, which is aimed at lessening the number of documents and reducing exports cost.
However, Surendra Bir Malakar, president of NCC, opposed the voluntary provision on CoO. “We should not go for voluntary provision as it poses threat to the sustainability of CoO issuance system to prove our originality,” said Malakar. He also underscored the need to conduct study of possible implications of the voluntary provisions on exports and suggested officials to conduct study on international trend on CoO issuance.
Meanwhile, a meeting of concerned stakeholders, including FNCCI and NCC, called by the Ministry of Commerce and Supplies to finalize new provisions on CoO issuance could not be held on Sunday, as the representatives of FNCCI and NCC said they were still collecting feedbacks on the new system from their members.
“We couldn´t attend the meeting, as we are still in the process of collecting feedbacks on the propose system,” Malakar said.
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