Market monitoring of shoes, garment halted

KATHMANDU, FEB 02 - The government has stopped monitoring of shops dealing in readymade garment and shoes although previous inspections have revealed rampant malpractices.The Department of Commerce and Supply Management, which coordinates the market monitoring, said inspection of such business es has not been possible due to massive under-invoicing at customs points.

Under-invoicing means declaring the prices of imported goods at customs lower than the actual prices so as to reduce the taxes payable. The discontinuation of the inspection has encouraged traders to price their goods exorbitantly.

A monitoring carried out by the department two months ago had found traders making up to 30 percent profit on readymade garment. “We cannot direct the traders to sell goods based on the customs valuation,” said Narayan Prasad Bidari, director general at the department.

Officials at the department said there is a huge difference between the customs valuation prices and retail prices. This means traders are also cheating the government in revenue, according to the department. The last monitoring had revealed traders were selling a garment product, which was valued at Rs 90 per metre at customs, at Rs 4,500 per metre in the market. It was also found that shoes, valued at Rs 300 at customs, were sold at Rs 3,000.

However, a customs department official said it was the customs department’s job to control excessive profit margins. The inspection two months ago had found Saubhagyawati Footwear at Mahabauddha selling Nepali shoes with a mark-up of up to 50 percent. As per the Black Marketing Act, setting more than 20 percent profit margin on any product is illegal.