KATHMANDU: The government has announced a special relief package for businesses affected by the Bhotekoshi floods, including a full waiver of customs duties on replacement commercial and transport vehicles.
The decision was taken by the Cabinet on Thursday, September 3, as part of a package aimed at helping flood-affected businesses resume operations.
Under the decision, businesses whose commercial or transport vehicles were swept away or damaged beyond repair can cancel the registration of the affected vehicles without paying any registration cancellation fee.
If they import vehicles of the same type to replace the damaged or lost vehicles, all customs duties applicable at the point of import will be waived.
The government has also introduced provisions for easier financing to purchase replacement vehicles, machinery and equipment.
Banks and financial institutions will provide loans based on the assessment of the damage and insurance compensation. The loan will be provided by adding the prescribed minimum premium to the bank’s base rate.
The government has also decided to review the existing loan-to-value (LTV) ratio for such loans.
For all borrowers affected by the floods, the interest rate for one year will be the lower of the rate calculated by adding a 0.5 percentage-point premium to the bank’s base rate or the borrower’s existing premium rate.
The relief package also covers plants, machinery and equipment destroyed beyond repair due to the floods.
Individuals or organizations can import replacement plants, machinery and equipment of the same nature and up to the quantity destroyed. Such imports will receive a full waiver of customs duties.
There is also a provision for importers whose goods were destroyed before reaching their destination.
If customs duties had already been paid for goods that were subsequently destroyed by the flood of September 3, the importer can bring in goods of the same nature through any customs office within six months. The amount of customs duty paid earlier can then be adjusted against the replacement import.
The government has also introduced measures to ease the financial burden on flood-affected borrowers.
For goods imported through the Rasuwagadhi customs point, the damage will be assessed. Based on the nature of the business, goods, damage and insurance claims, borrowers can request loan restructuring or rescheduling.
They can also receive an extension for repayment of principal and interest.
The same restructuring or rescheduling facility will be available once to borrowers affected by the floods for repayment of loans taken from banks and financial institutions.
The government has also directed insurers to make insurance claim settlements easier and faster.
Policyholders affected by the floods can receive an advance payment of up to 50% of the assessed claim amount based on the preliminary assessment report.
Reinsurers will also be required to provide insurers with an advance claim payment of up to 50%.
Insurers have been directed to prepare and implement a simplified claim settlement procedure to speed up payments for flood-related losses.
The measures are aimed at helping businesses replace lost vehicles, machinery and equipment and restore operations following the Bhotekoshi flood.
