Nepal Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in Nepal, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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Import Tariffs
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Import tariffs are generally assessed on an ad valorem basis. Nepal uses the Harmonized Tariff System (HTS) for classification purposes. Import duty rates vary from zero to 80 percent, though end-user taxes and registration fees can add additional costs. There is a two-tier tariff rate system for most imported items - one for imports from South Asian Association for Regional Cooperation (SAARC) nations, which is usually lower than for imports from all other non-SAARC countries. Machinery or goods related to basic needs or agricultural production are charged at a five percent rate, or lower in some cases. 

Products considered hazardous to one’s health, such as cigarettes, are taxed at Nepali rupees 4,500 (approximately $37) per thousand pieces. Liquor is taxed at Nepali rupees 1,200 (approximately $10) per liter. Customs duties are generally assessed on the cost, insurance, and freight (CIF) value. Imported goods are also liable for a value-added tax (VAT) of 13 percent levied on CIF plus customs duty value. Changes in import tariffs, other duties, and taxes are generally announced through the annual budget, and later ratified by the Parliament before enforcement. Interested parties are advised to consult the Department of Customs website for the updated tariff schedule. Special Duty Reductions of five or 10 percent have been given to imports from the Tibet Autonomous Region of the People’s Republic of China, SAARC member countries, and designated most-favored nations.

Certain blocks of Nepal’s first Export Processing Zone (EPZ) in Simara, near the Nepal-India border town of Birgunj, are open to exporters. This EPZ is meant to provide a special facility for the manufacture and export of garments. Any industry exporting 90 percent or more of its products is entitled to privileges equivalent to those normally provided by an EPZ – e.g., no tax, duty, or fee is levied on the machinery, tools, and raw materials used by the industry in manufacturing the exported products. Export-oriented industries may also enjoy the benefits of bonded warehouse facilities. Raw materials can be imported via entry in a passbook without paying custom duty or VAT. The same value is deducted from the passbook upon export of the finished product. The enterprise must also submit a bank guarantee sufficient to cover applicable duties. However, the EPZ has received a tepid response from industrialists stating that the export requirement (90 percent) and rent is too high.

To look up duties and tariffs, use the Customs Info Database tariff look-up tool, available on trade.gov (free registration required), to estimate duties and taxes.

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