Nepal gives % cash incentive to garment exports
Nepal’s garment industry may get a 2% cash incentive on exports after the Ministry of Commerce and Supplies issued instructions to the Finance Ministry.
Joshi, secretary of the Ministry of Commerce and Supplies, said that the Ministry of Commerce and Supplies has made a proposal to the Ministry of Finance to direct the cash incentive process. The proposal also includes a proposal to allow a 2% cash incentive for the garment industry.
Joshi said the Ministry of Commerce and Supplies has also asked the Finance Ministry to extend the cash incentive mechanism for industrialists exporting garments to India. This is because some exporters avoid using banking channels when exporting clothing to India, which leads to fraud.
The Ministry of Commerce and Supply instructs the Ministry of Finance to provide cash incentives of 2-3% or 2-4% to other industrial sectors other than the garment industry. Joshi added that they requested the finance ministry to give two types of cash incentives instead of three types of cash incentives of 2%, 3% and 4%.
After the Cabinet’s decision on June 9, 2011, the government gradually formed the standards for cash incentives. According to this standard, exporters exporting products with 30-50% added value will be eligible to receive 2% cash incentives, while exporters Products with an added value of 50-80% will receive a 3% cash incentive, and those with an added value of more than 80% will receive a 4% cash incentive.
Since the cash incentive scheme was launched, disagreements have arisen between the government and industrialists due to the complexity of the process of determining the added value of a product.
With reference to several complications of cash incentives and a small number of recommendations, the Ministry of Industry requested the Ministry of Commerce and Industry to elaborate on a new module for the cash incentive process.
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