Kathmandu: VG Motors, the automotive arm of Nepal’s Vishal Group, has also been implicated in alleged customs duty evasion involving imported electric vehicles, according to the 63rd Annual Report of the Office of the Auditor General.
The report claims the group, which sells brands such as SRM and Joy-Long, benefited from underreporting the motor capacity of imported EVs to secure lower tax rates.
According to the Auditor General, several importers cleared X30LEV passenger vans through the Tatopani Customs Office by declaring the vehicles’ peak motor power at 50 kilowatts under customs classification code 8703.80.29. However, the report says no manufacturer-certified or independently verified motor-capacity test reports were submitted during customs clearance.
The Auditor General stated that catalogues and technical specifications published on the manufacturer’s website and in international markets show the same vehicle model equipped with battery capacities of 41.86 kWh and 32.14 kWh. At the same time, the van’s actual peak motor power is listed at 60 kilowatts.
The report further noted that the vehicle was also advertised as a 60-kilowatt EV in brochures and promotional materials distributed during the NADA Auto Show. Based on those specifications, the vehicle should have been classified under customs heading 8703.80.59, which applies to electric cars, jeeps, and vans with peak motor output above 50 kilowatts but not exceeding 100 kilowatts.
Under that classification, the vehicles would have attracted 20 percent customs duty and 15 percent excise duty. The Auditor General recommended investigating and recovering Rs 980.5 million in unpaid taxes linked to the imports.
A similar issue was identified with the “Nami Box” electric vehicle imported from China. The report says importers declared the vehicle’s motor output at 50 kilowatts despite the Department of Transport Management failing to independently verify the actual motor capacity.
According to brochures published on the Nepali website of Dongfeng Nepal, the vehicle carries a 70-kilowatt motor while all other specifications remain identical. The Auditor General also found that importers had previously cleared the same model under the higher 50–100 kilowatt customs bracket in other transactions.
As a result, the report concluded that the Nami Box should also have been classified under customs heading 8703.80.59 and subjected to 20 percent customs duty and 15 percent excise duty. It estimated potential revenue losses of Rs 1.74 billion from those imports alone.
The report also scrutinized imports of the Zeekr X electric SUV through Tatopani and Rasuwagadhi customs points. Importers declared the vehicle’s peak motor power at exactly 200 kilowatts and cleared it under a lower-duty customs category.
However, technical specifications published by the manufacturer reportedly show the vehicle producing 272 PS, equivalent to 200.06 kilowatts, with a 66-kWh battery pack, 512 Nm torque, and rear-wheel drive configuration.
That marginal difference proved significant because vehicles exceeding 200 kilowatts fall under a higher customs category requiring 60 percent customs duty and 35 percent excise duty. The Auditor General estimated revenue leakage of Rs 196.7 million from Zeekr X imports through Tatopani alone.
The report further accused importers of underreporting the motor output of several premium EV models, including the Deepal E07, JAC J6, Avatr 11, and Xpeng vehicles. Official manufacturer catalogues reportedly list the Deepal E07 at 252 kilowatts and the JAC J6 at 205 kilowatts, while other models also exceed the 200-kilowatt threshold.
Despite this, importers allegedly declared the vehicles as having motor capacities below 200 kilowatts and cleared them under the lower-tax customs heading for EVs between 100 and 200 kilowatts.
The Auditor General estimated tax losses of Rs 92.1 million at Tatopani Customs and Rs 812 million at Rasuwagadhi Customs from those imports. Altogether, the report says unpaid taxes linked to these EV imports amount to Rs 1.10 billion, which it recommended be fully investigated and recovered by the government.
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