Kathmandu: Nepal has suffered massive revenue losses from the import of electric vehicles after importers allegedly understated the peak motor power of EVs to qualify for lower customs and excise duties.
The issue was highlighted in the 63rd annual report of the Office of the Auditor General, made public on Monday, which stated that the government may have lost billions of rupees in customs and excise revenue due to false declarations of vehicle specifications.
According to the report, customs offices at Rasuwagadhi and Tatopani alone were found to have under-collected Rs 2.50 billion in revenue after EV importers declared lower motor capacities than the vehicles’ actual specifications. The Auditor General has directed the government to investigate the matter and recover the unpaid taxes.
Under Nepal’s Customs Tariff Act 2024, tax rates on electric vehicles are determined based on peak motor power. EVs with motor power between 50 and 100 kilowatts are subject to 20 percent customs duty and 15 percent excise duty. Vehicles between 100 and 200 kilowatts attract 30 percent customs duty and 20 percent excise duty, while EVs between 200 and 300 kilowatts face 60 percent customs duty and 35 percent excise duty.
The report states that importers have frequently declared vehicles with actual motor capacities above 100 kilowatts as either 99.9 kilowatts or exactly 100 kilowatts in customs documents to remain within lower tax brackets. Customs officials reportedly approved imports based solely on invoices submitted by importers without conducting independent technical verification of vehicle specifications.
The Auditor General compared customs declarations with international websites, manufacturer catalogs, and export documents and found significant discrepancies in several popular EV brands and models imported into Nepal.
The report also noted that the Department of Transport Management only certifies whether vehicles are roadworthy and does not verify technical details such as motor power. Similarly, customs offices have been clearing vehicles without requiring official certification from manufacturers or independent technical testing reports.
According to the findings, the Rasuwagadhi Customs Office alone allowed tax concessions amounting to Rs 1.27 billion, while the Tatopani Customs Office accounted for another Rs 1.23 billion in potential revenue losses. The report concluded that the matter warrants serious investigation.
The Auditor General has instructed the government to ensure that future tax assessments are based strictly on official manufacturer specifications and dynamometer testing reports, and to immediately recover any unpaid revenue.
Among the vehicles identified in the report was the Zeekr X, imported by Pioneer Motocorp. The vehicle was reportedly cleared at customs with a declared peak motor power of 200 kilowatts. However, the manufacturer’s official website and international specifications list its output at 272 PS, equivalent to 200.06 kilowatts. Since vehicles exceeding 200 kilowatts fall into a much higher tax bracket, even a marginal understatement could significantly reduce tax liability.
Similarly, MAW Vriddhi’s Deepal E07 and JAC J6 models were reportedly imported with motor capacities declared below 200 kilowatts, despite international specifications showing outputs of 252 kilowatts and 205 kilowatts, respectively.
The report also identified discrepancies in the Nami Box EV imported by MAW Vriddhi. Although the vehicle was declared at 50 kilowatts during customs clearance, the manufacturer’s brochure lists its motor capacity at 70 kilowatts, which would place it in a higher tax slab.
Likewise, the X30 LEV and Passenger Van models imported by LS Auto were declared at 50 kilowatts, while online brochures from the NADA Auto Show and international catalogues indicated a motor power rating of 60 kilowatts.
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