KATHMANDU, NOV 27 -The government’s market monitoring initiative has revealed that sellers of readymade garments and shoes have been cheating customers on price and the government on taxes. Besides engaging in illegal practices like under invoicing, some traders have been enjoying a profit margin of up to 300 percent, said the Department of Commerce and Supply Management.
The wrongdoings of traders came to light when the department inspected a number of shops selling readymade garment and shoes in the capital. “There are cases where a garment with a cost price of Rs 400 has been priced at Rs 2,600,” said Hari Narayan Belbase, director of the department. “We have clearly exposed that the market condition is really terrible.”
There is a huge difference in customs valuation prices for VAT collection purposes and retail prices which means traders have also been cheating the government, according to the department.
Responding to growing complaints, the department had checked out eights shops dealing in readymade garments, shirting and suiting and shoes at Putali Sadak and Mahabauddha on Monday and Tuesday. The government’s monitoring has so far been focused on daily essential goods to control artificial shortages and price hikes and keep a watch on quality.
According to the department, Saubhagyawati Footwear at Mahabauddha was found selling Nepali shoes with a mark-up of up to 50 percent. It had also been passing off Nepali shoes as Korean imports.
As per the Black Marketing Act, setting a profit margin of more than 20 percent on any product is illegal. The department has ordered Saubhagyawati Footwear to submit a clarification within a week.
The department has also asked other stores to produce their purchase and sales bills dating from mid-July.
On Tuesday, a monitoring team under the coordination of the department inspected four firms Smart Outfitter, Urban Fashion Outfitter (UFO), Trinity Fashion Wear and Shriman Shirting and Suiting at Putali Sadak. Belbase, the chief of Tuesday’s market inspection team, said that a T-shirt which could be bought at the street market for Rs 85 was found priced at Rs 360 at UFO.
On Monday, the department inspected a string of readymade garment and shoe shops—Sun Rise Footwear, Saubhagyawati Footwear, Amit Store and Ashutosh Store of Mahabauddha.
The department said that the action to be taken against the errant traders would be decided after studying their bills and discussing the matter with the Department of Customs and the Ministry of Commerce and Supplies.
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