KATHMANDU: A new government report has revealed that electric vehicle (EV) importers in Nepal have been misreporting motor power ratings to evade higher taxes.
The 62nd Annual Report of the Auditor General states that some importers have been underreporting the peak motor power of EVs to qualify for lower customs and excise duties. Specifically, EVs with motors rated between 100 and 200 kW were falsely declared as having only 99 kW of power, according to the report.
This discrepancy went largely undetected due to the lack of proper technical inspection equipment at key customs checkpoints, including Tatopani and Rasuwagadhi. This left customs officials with no alternative but to rely solely on the documents submitted by the importers.
The report further stated that, in many instances, the declared motor power did not match the official specifications published on websites of the manufacturers. This allowed importers to pay only 15% customs duty and 10% excise duty—rates that are applicable to EVs under 100 kW—instead of 20% for both.
The government lost an estimated Rs 3.77 billion in revenue—Rs 2.74 billion from Rasuwagadhi customs and Rs 1.03 billion from Tatopani customs—due to underreporting of mother power by EV importers, according to the report.
The government is estimated to have lost approximately Rs 3.77 billion in revenue – Rs 2.74 billion from Rasuwagadhi customs and Rs 1.03 billion from Tatopani customs. The Office of the Auditor General has recommended that the government conduct a thorough investigation of the issue and recover unpaid taxes.
The report also uncovered misuse of benefits in the assembly of motor vehicles imported in CKD (completely knocked down) form. According to the report, importers have been claiming assembly benefits without obtaining the required registration or approval.
The Office of the Auditor General has advised the government to recover subsidies worth Rs 3.21 billion provided to different industries assembling motor vehicles in Nepal.
