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Military

India suspends USD 28 million excise duty refund to Nepal

IRNA - Islamic Republic News Agency

New Delhi, Feb 16, IRNA
India-Nepal-Excise duty
India has withheld payment of USD 28 million to Nepal in excise duty refund apparently because of its failure to pay USD 25 million to New Delhi for defence supplies.

Nepal is supposed to get millions of dollars from India in excise duty refund for goods imported from third countries under the DRP, which has now accumulated to USD 28 million. But New Delhi has refused to pay the amount, a PTI report said here quoting `The Kathmandu Post'.

When contacted, the Indian embassy confirmed that New Delhi was required to refund the money to Nepal, saying "that has been under the process." The embassy staff, however, declined to further comment on the matter.

India supplied the Royal Nepalese Army about USD 110 million worth of arms and other security equipment between 2002 and 2005 under the 70-30 ratio of their military cooperation.

The Nepal government needs to pay only 30 percent of the military equipment it procured from India under the cooperation.

But Nepal has not paid that amount and last year it purchased 18 truckloads of arms and ammunitions from China by paying cash, according to officials.

This has displeased India, which is under constant pressure from private arms dealers in the country to secure quick payment of the pending amount, the newspaper said.

India, along with the USA, UK and Belgium, has suspended lethal arms supplies to Nepal following the February seizure last year of power by King Gyanendra and has joined the international community in demanding restoration of democracy, press freedom and civil liberties in the country.

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