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The Auditor General concluded that 5 billion rupees in revenue was embezzled in a single year from the import of electric vehicles, and wrote a letter stating that it was unjustified.

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Kathmandu. It has been revealed that there was a tax evasion of Rs 5 billion in the import of electric vehicles in a single year. The Office of the Auditor General has confirmed that there was a large-scale tax evasion in the import of electric vehicles.

The office has concluded that there was a revenue evasion of Rs 5 billion from just two customs checkpoints in the fiscal year 2080/081. According to office sources, the Finance Minister, Finance Secretary, Revenue Secretary, Director General of the Customs Department, and employees under the department are all aware of the tax evasion in electric vehicles, but no plan has been taken forward to stop the evasion.

An office source told Singha Durbar, “We have been studying EV vehicles for 1/2 a year, this time we have come to the conclusion that there was customs fraud. We have concluded that customs fraud worth Rs 5 billion was committed in the fiscal year 2080/081 through Tatopani and Rasuwa customs checkpoints alone.”

The source claims that the BYD vehicle sold by Cymax Inc. is the one that commits the most customs fraud. Some employees of the Customs Department had tried to stop customs fraud in EV vehicles. But all those employees have been transferred by Finance Minister Bishnu Prasad Poudel. Former Director General Dhundi Prasad Niraula had written to subordinate offices on 2081 Jestha 4, saying that there was tax fraud in EV vehicles and to recover the money.

Director General Niraula wrote in a letter, “The Customs Inspection and Testing Office will conduct post-inspection testing of importers after selecting them in accordance with Section 6(4) and Section 6(7) of the Customs Inspection and Testing Procedures, 2078 BS.” While inspecting electric vehicles under customs headings 8702, 8703, 8704, I have directed that the documents mentioned on the official website of the manufacturer regarding the peak power capacity of the motor, including the motor capacity/peak power, must be checked and confirmed, and the transaction price must be determined, and the duty as per the Economic Act, 2080, and if duty was exempted earlier, it must also be collected and inspected with high vigilance.’

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## Director General Niraula has been transferred after writing that letter. Similarly, Minister Poudel has also transferred the employees who said that tax should be levied on EVs. After this, Harisharan Pudasaini, who became the Director General of Customs, also held a meeting with some businessmen saying that tax should be levied on EV vehicles, but he also did not show interest. He had stopped the Customs Inspection and Testing Office from selecting a company for further study. Now Mahesh Bhattarai has arrived as the Director General. He too has not shown any interest in collecting tax on EVs. Customs officials say that to collect tax, it is not just the employees who want to, but the ministerial level should be interested.

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## ##This is how revenue on EVs has been cheated

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## The Nepal government has set customs duty and other tax rates on EVs, which have been seen as an alternative to petroleum vehicles in recent times. As the government gradually increased the customs duty on EVs, EV importers have been using loopholes in the law to pass customs inspection by using fake documents to show less kilowatts than the actual kilowatts.

Vehicles of the same brand, capacity, and performance are being imported by reducing the kilowatts in the documents. For example, it has been found that electric vehicles manufactured by Chinese electric vehicle manufacturer ‘Chery’ and imported by Sharada Group in Nepal have shown less kilowatts. It has been found that the kilowatts have been faked in the Omoda E-5 model vehicle imported by Sharada Group.

The website of the company that produces Omoda E-5 lists the kilowatt of Omoda E-5 as 150 kilowatts. The company has not produced vehicles of that model with less kilowatts. According to sources, after the news of customs fraud on EV vehicles came out, Nepali companies have been busy writing 99 kW on the websites of foreign companies. Therefore, 99 has started to be found on the websites.

Although 99 kW is found on the website, the specific model of the vehicle cannot be seen. According to sources, the company has been unofficially saying that it is a 150 kW vehicle and that it was brought by evading customs duty so that it could be sold cheaply.

The company has created false documents to evade customs duty by 15 percent. Traders are taking advantage of this by saying that the government does not have a reliable device to measure kilowatts. There are 2 types of methods for testing the peak power of electric vehicles. According to which, a chassis dynamo meter is currently in the vehicle testing office in Teku.

The machine only measures the peak power generated at the wheel. Electric vehicles have a system called Battery Management System (BMS). This system can manipulate the vehicle’s battery. Therefore, technicians argue that the chassis dynamo meter cannot measure the actual capacity of an EV vehicle.

An engine dynamo meter is required to test the actual capacity of an EV vehicle. Technicians estimate that the machine will cost 50 to 60 million rupees to purchase. According to sources from the Vehicle Testing Office, the Department of Transport Management has certified the Omoda E-5 wheel’s peak power as 99 kilowatts without even testing it.

The government has adopted a policy of taxing the kilowatts of EV vehicles. When taxing according to kilowatts, more kilowatts are taxed more and less kilowatts are taxed less. In particular, there is a lot of cheating between 50 and 100 kilowatts. Making a document for a vehicle of more than 100 kilowatts as 100 kilowatts results in a 15 percent reduction in revenue.

According to the Economic Act 2081, 15 percent customs duty and 5 percent excise duty are to be paid for vehicles from 0 to 50 kilowatts.

15 percent excise duty and 20 percent customs duty are to be paid for vehicles from 51 to 100 kilowatts. Similarly, 30 percent customs duty and 20 percent excise duty are to be paid for EV vehicles from 100 to 200 kilowatts.

Since 2015, 60 percent customs duty and 35 percent excise duty have been imposed on EVs up to 300 kW. Similarly, 80 percent customs duty and 50 percent excise duty have been imposed on EVs above 300 kW.

A vehicle with a specification of 150 kW can be seen on Omoda’s official website. But a 99 kW vehicle or vehicle model cannot be found. Because the company has not manufactured a 99 kW Omoda E-5 vehicle. It is stated that the 150 kW vehicle and the 99 kW vehicle have the same capacity and performance.

The specifications posted on the website by the vehicle seller Sharda Group and the features of the vehicle posted on the website by the vehicle manufacturer are of the same nature. Only the kilowatt is written differently. The company has shown the biggest false information, the maximum torque (max torque-n*m) of 340 Nm. Now the question remains, how can the truck power of 99 kW and 150 kW be the same? Businessmen say that this is the biggest fraud.

Similarly, it is stated that it can travel 430 kilometers on a single charge. Here too, the mileage per kilowatt of 99 kW capacity and 150 kW capacity is shown to be the same. The battery capacity is shown to be 61 kWh. Other features of the vehicle are also shown to be of the same nature. Customs evasion in the Omoda E-5 model vehicle is just a representative example. Similarly, tax evasion has been found in the vehicles of most companies. Similarly, Changan’s Dipol, which is being imported by MAW Vriddhi, Cymax Inc., which imports and sells BYD, and MG brand vehicles sold by Paramount Vehicles have claimed that customs evasion has occurred in vehicles.

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## ##Customs evading by showing the passenger

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## In the customs evasion in electric vehicles, one agency has been evading by showing another agency.

If the Customs Department wants to stop tax evasion on EV vehicles, it has the right to collect tax directly. Because BYD’s Atto 3 sold by Cymax Inc. was previously inspected and passed at 150 kW. Since it was seen that bringing it at 99 kW would be more beneficial, the company has prepared fake documents and brought it at 99 kW. Customs is giving exemptions on the basis of fake documents on vehicles of the same nature.

In response to the question asked by the Accountant General, the Customs Department has been showing the Department of Transport Management. Similarly, the Department of Transport has been saying that permission has been given on the basis of documents submitted by the businessmen themselves. Currently, Finance Minister Bishnu Prasad Poudel is saying that there is a resource crisis, saying that the government’s income has not been able to meet even the current expenses. But the customs department under him is becoming apathetic about collecting taxes.

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