Procedure and Requirements for Obtaining Export/Import Code in Nepal

Procedure and Requirements for Obtaining Export/Import Code in Nepal

Nepal’s international trade activities are regulated under various legal frameworks, including the procedure for providing Import and Export, 2079 and Section 89B of the Customs Act. Any person or organization wishing to engage in the import or export of goods must first obtain an Export or Import Code Number, which is a legal prerequisite for international trading.

Legal Framework: procedure for providing export or import code number 2079 (section 4)

This Act governs the control, regulation, facilitation, and prohibition of import and export activities.

Requires registration before engaging in international trade.
- Allows the government to regulate or restrict trade based on national interest, health, security, and environmental factors.
- Mandates the acquisition of an export/import code for legal trade operation.
- Grants authority to revoke the code number if laws are violated.
- Imposes penalties for unauthorized trade activities.

Customs Act, 2064 (Amended Section 89B):
Requires traders to obtain an export/import code number by submitting an electronic application through the official system of the Department of Customs.

Eligibility Criteria to Obtain Export/Import Code:

As per prevailing law, the following conditions must be met:

Business Registration:
1. The applicant must be registered with the Department of Commerce, Supplies and Consumer Protection under existing trade laws for the purpose of import, export, or direct sales.
1. Alternatively, industries must be registered with the Department of Industry, Government of Nepal, under the Industrial Enterprises Act, 2076, or obtain a recommendation from the concerned industrial authority (federal or provincial).
1. Other eligible institutions include Class “A” banks, hospitals, universities, and colleges involved in trade.
Capital Requirement:
1. A minimum paid-up capital of NPR 10,00,000 (Ten Lakh rupees) is required.
1. Exception: This capital requirement is not applicable for those applying for code numbers exclusively for export purposes.
Tax Documentation:
1. Must have a valid Permanent Account Number (PAN) certificate.
1. Must be registered for VAT, unless exempted under Schedule 1 of the VAT Regulations, 2053.

Required Documents for Application: sub- section 2

When applying for the export/import code electronically, the following documents must be submitted:

(a) Copy of business/industry registration certificate or recommendation letter from relevant government body.

(b) Certificate showing paid-up capital of at least NPR 10 lakh (if applicable).

(d) Self-declaration stating there are no outstanding government dues.

(e) Tax clearance certificate from the Inland Revenue Office confirming no pending tax liabilities.

(f) A passport-sized photo of the applicant (individual, proprietor, or head of the organization) taken within the last six months must be submitted with the application.

(g) In case of Limited or Private Limited companies, a copy of the MOA is required to validate the company’s objectives and legal structure.

Class “A” Banks, Hospitals, Universities, and College

What the Law Says:

As per Sub-section (2a) of procedure for providing export or import code number 2079 the law, these institutions can get an export or import code number without submitting the document listed in Sub-section (2)(a).

What Does This Mean?

Normally, the businesses must submit a business registration certificate or a recommendation from the concerned government body. But:

A-class banks
Hospitals
Universities
College

These institutions do not need to submit this particular document when applying for a code.

Why the Exception?

These institutions are already well-regulated under their own laws, and the government has simplified the process for them.

Individuals or Businesses Doing Only Export

What the Law Says:

As per Sub-section (3) of procedure for providing export or import code number 2079, those who are applying only for export (not for import) do not need to submit documents mentioned in Clause (b) of Sub-section (2).

What Is Clause (b)?

Clause (b) requires the submission of a certificate showing that the business has at least NPR 10 lakh (1 million) paid-up capital.

So, What’s the Benefit?

If you are only exporting goods (and not importing), then you do not have to show that you have 10 lakh capital.

3. Special Export/Import Code Number Holders

There are Some individuals or organizations which granted a “Special Export or Import Code Number” under Section 7(2) of the Import and Export Act, 2079. This may include:

Strategic or priority industries
Government-supported exporters/importers
Projects approved for special facilitation

Such special code number holders do not need to submit:

(b) Paid-up capital certificate
(e) Tax clearance certificate from the Internal Revenue Office

So, What’s the Benefit?

If you get a special export/import code, you are exempted from submitting capital proof and tax clearance, making your application process easier and faster.

Table

Applicant Type	Documents They Can Skip	Legal Basis
Class “A” banks, hospitals, universities, campuses	Business registration or recommendation letter	Sub-section (2a)
Export-only businesses or individuals	Paid-up capital certificate	Sub-section (3) – Clause (b)
Special code holders (as per Section 7(2))	Paid-up capital certificate and tax clearance certificate	Sub-section (3) – Clauses (b) & (e)

Additional Provisions under Section 4 of the Procedure for Providing Export or Import Code Number, 2079

As per the Sub-section (4) provides specific guidelines for joint ventures seeking to obtain an export or import code number. In the case of joint ventures registered for Value Added Tax (VAT) by Nepali individuals, the code number may be obtained by submitting the documents prescribed under Sub-section (2), along with a copy of the joint venture agreement and a recommendation letter from the contract-awarding authority. However, where the joint venture is formed by foreign individuals and registered for VAT, the applicant is exempt from submitting the documents required under Clause (a) (business registration or recommendation) and Clause (b) (proof of paid-up capital) of Sub-section (2). In such cases, submission of the joint venture agreement and a recommendation from the awarding agency shall suffice.

Sub-section (5) introduces the requirement for electronic document submission. All documents and information required under Sub-sections (1) and (2) must be scanned from their original versions and uploaded through the designated online system. The applicant is also required to retain the original copies of the uploaded documents and present them upon request by the concerned authority. However, if the required documents are already accessible through an electronic system managed by the relevant government agencies, separate uploading of those documents shall not be necessary.

Sub-section (6) simplifies future administrative processes for approved applicants. Once an individual or entity obtains an export or import code number by submitting the documents specified in Sub-section (2), they are not required to resubmit those same documents for subsequent export or import transactions. This provision aims to streamline operations and avoid unnecessary repetition in documentation.

Procedure for Providing the Export or Import Code Certificate

As per the Section 5 of the Procedure for Providing Export or Import Code Number, 2079 explains the detailed process of how exporters and importers receive their official Export or Import Code Certificate. It outlines who issues the certificate, how it is delivered, what conditions apply, and how issues are handled if they arise.

Issuing Authority

According to Sub-section (1), the authority to issue the Export or Import Code lies with the offices mentioned in Schedule-3 of the procedure. These are the official government offices responsible for handling applications related to foreign trade.

Timeline and Format for Issuance

As per Sub-section (2), once the applicant submits the required documents and application as per Section 4, the office will:

Check whether the documents are complete and valid.
If everything is in order, the office will issue the Export or Import (Permanent) Code certificate in the prescribed format (Schedule-4) within seven working days.
The issuance is done through an electronic system making the process quicker and more efficient.

One Code per Business Rule

Sub-section (3) makes it clear that no person or business can obtain more than one export or import code for the same business activity. This rule helps prevent duplication and misuse of trade privileges.

Upgrading from Export-Only to Full Export/Import Code

Sub-section (4) deals with cases where a person initially applies only for export activities. If later, that person wants to also begin importing, they must:

Submit a new application under Section 4.
Provide the additional documents required for import purposes especially the proof of paid-up capital as per Clause (b) of Section 4(2).
Once reviewed and approved, the office will issue the full Export or Import (Permanent) Code to cover both activities.

Document Review and Requests

According to Sub-section (5), after receiving your documents electronically, the office has the right to:

Ask you to submit the original copies of the documents you uploaded.
Or request additional documents that may be needed to verify your eligibility.

As per Sub-section (6), once the office makes such a request, the applicant must submit the required documents within seven days.

Rejection and Communication

If, after checking your documents and application, the office finds that you do not meet the conditions to get an export/import code, then:

As per Sub-section (7), the office must notify you of the rejection and clearly mention the reason,
And this must be done within seven working days of completing the review.

Receiving the Certificate

Once the code has been issued, Sub-section (8) explains two options for getting the certificate:

The applicant can download and print it themselves by logging into the system using the password provided.
Or, they can visit the office and collect a physical copy if needed.

Use of the Code and Legal Requirements for Special Goods

Finally, Sub-section (9) clarifies what the export or import code can and cannot be used for:

The code is only used for importing and exporting goods.
But if you are dealing with goods that require special licenses, permits, or recommendations under Nepali law, then you must:
- Get approval from the concerned government authority, and
- Present those documents during customs clearance.

When an Export or Import Code Number Is Not Required

While the general rule is that anyone engaging in export or import activities must obtain an Export or Import Code Number, Section 6 of the Procedure for Providing Export or Import Code Number, 2079 outlines specific exceptions where this requirement does not apply. However, certain conditions and responsibilities still apply, especially for those who already possess the code.

1. Cases Where Code Number Is Not Mandatory

As per Sub-section (1) of Section 6, a person is not required to obtain an Export or Import Code Number in the following situations:

When exporting or importing goods for personal use, as allowed under customs notices for travelers.
When importing goods up to NPR 10,000 in value in a single transaction.
When exporting goods up to NPR 1,000,000 (ten lakh) in value in a single transaction.

These exemptions are meant to simplify trade for small-scale or personal use activities, especially for individuals who are not involved in regular or large-scale commercial trade.

2. Mandatory Mention of Code for Code Holders

However, there is an important condition: If an individual or business has already obtained an Export or Import Code Number, they are required to mention their code in every import or export transaction, regardless of the value of the goods.

3. Using PAN for Export or Import Instead of Code

As per Sub-section (2), individuals or businesses who fall under the exemption categories listed in Sub-section (1) may choose to use their Permanent Account Number (PAN) for export or import purposes.

However:

They must submit an application electronically through the system,
The application must be submitted to the office listed in Schedule-3 of the procedure,
And permission must be granted to use PAN in place of an Export/Import Code.

Provision of Special Code Number for Export or Import

While most businesses are required to obtain a permanent export or import code number for commercial trade, Section 7 of the Procedure for Providing Export or Import Code Number, 2079 introduces a provision for issuing a Special Export or Import Code Number for non-commercial or specific one-time transactions.

1. Who Can Get a Special Code Number?

According to Sub-section (1), the offices listed in Schedule-3 may issue a Special Export or Import Code Number to the following entities if their export or import is non-commercial in nature:

(a) Government agencies, public institutions, official government projects, foreign diplomatic missions in Nepal, and non-governmental organizations (NGOs) that are importing or exporting goods for non-commercial purposes (such as aid or administrative needs).

(b) Small, cottage, and medium-sized industries registered under the Industrial Enterprises Act, 2076 that are importing:

Raw materials,
- Machinery,
- Equipment, or
- Spare parts required for their production.

(c) Other industries (not falling under Section b) that are importing machinery, equipment, or their parts for the purpose of establishing the industry (one-time use only).

(d) Any other entity or individual specified by the Department of Commerce, Supplies, and Consumer Protection.

2. Repeated Import/Export of Donations or Relief Goods

Sub-section (2) makes a special provision: Even if the export/import is repeated, the office may issue a special code number to persons or organizations bringing in or sending out goods as donations, gifts, or for humanitarian relief purposes.

3. Validity Period of Special Code Numbers

The validity of special code numbers depends on the type of applicant:

As per Sub-section (4), for those listed in Section (a) of Sub-section (1) (such as government bodies and NGOs), the special code number will be valid for one fiscal year.
As per Sub-section (5), for those listed in Sections (b), (c), and (d) of Sub-section (1), and also for Sub-section (2) (e.g., relief-related repeated import/export), the code is:
- Valid for up to one month, and
- It automatically expires after the goods are imported/exported.

However, if the goods cannot be imported/exported within one month, the validity can be extended once for up to seven days.

4. PAN Requirement

As per Sub-section (6), any person or entity (other than those listed in Section (a) of Sub-section (1)) must have a Permanent Account Number (PAN) in order to obtain a special export or import code number.

Section 7 provides a practical solution for non-commercial, humanitarian, and one-time import/export needs by offering a special code number. This helps ensure that:

Government and aid agencies can function smoothly,
Small industries get the materials needed to operate or set up,
Relief efforts are not delayed,
And temporary trade is regulated while remaining compliant with the law.

Top of Form

Renewal of Export or Import (Permanent) Code Number

The Export or Import (Permanent) Code Number issued by the concerned authority is not a one-time authorization, it must be renewed on a yearly basis. Section 8 of the procedure outlines the complete renewal process, timeline, necessary documents, penalties, and special provisions for long-term renewal.

Annual Renewal Requirement

According to the procedure, any person or business that has obtained a permanent export or import code must renew it every fiscal year. The renewal application must be submitted before the start of the new financial year, and the applicant must submit all required documents electronically through the official computer system. These documents must comply with Sub-rule (2) of Rule 66(d) of the applicable regulations, and the applicant must complete the Renew Exim Code section in the online portal. This ensures that the renewal system is fully digital, transparent, and efficient.

Review of Documents and Clarifications

Once the application is submitted, the office will scrutinize the documents and details. If there is any uncertainty or suspicion regarding the validity of any submitted information, the office may request the applicant to produce original copies of the documents. The applicant must comply with this request within seven days from the date of notification. This step safeguards against the use of false or misleading information in the renewal process.

Approval of Renewal

If the office finds that all submitted details and documents are correct and the applicant has paid the required renewal fee, the office will approve the renewal. The renewed certificate can be either downloaded electronically by the applicant or collected from the office in person. This flexibility allows businesses to complete the process conveniently from anywhere.

Rejection and Notification

In cases where the renewal cannot be processed either due to incomplete documentation or failure to meet necessary requirements the office will reject the application. However, the applicant will be informed of the reason for rejection within seven days of the review. This clause ensures that businesses are not left waiting indefinitely and are given a fair explanation.

Cancellation for Fraudulent Submissions

Section 8 also provides strict penalties for misconduct. If it is discovered that an applicant has submitted fake or forged documents during the renewal process, the office may cancel the renewed code and revoke the export/import rights of the person or company. Furthermore, such cases will be referred to the appropriate authorities for legal action under prevailing laws. This provision upholds the integrity of the national trade system.

Option for Five-Year Renewal

For the convenience of industries and frequent traders, the law allows an option to renew the code for five fiscal years at once. To do this, the applicant must pay the prescribed fees for all five years in a lump sum. This is particularly beneficial for businesses looking to avoid the hassle of annual renewals and maintain uninterrupted trade operations.

No Renewal for Special Code Numbers

It is also important to note that special export or import code numbers, as issued under Section 7 for non-commercial or one-time use cases, do not require renewal. These special codes are issued with limited validity and purpose, and once they expire, there is no obligation to renew them.

Termination and Cancellation of Export or Import Registration Number

The system of issuing Export or Import (Permanent) Registration Numbers is designed to facilitate legitimate international trade while ensuring compliance with national laws. However, there are circumstances in which the registration number may be terminated temporarily or cancelled permanently. Section 9 of the procedure clearly outlines the reasons, process, and conditions under which such actions may be taken. It also ensures that due process is followed and genuine traders are protected from arbitrary decisions.

Terminating for Non-Payment of Government Dues

If a person or business holding a permanent export or import registration number fails to pay any tax, duty, or government dues, the concerned office has the authority to block their registration number for six months. The office must notify the concerned party about this action. However, this blocking is not final. If the individual clears their dues within the six-month period and submits an application for unblocking along with proof of payment, the office can reverse the terminating.

Cancellation After Six Months of terminating

In cases where the dues remain unpaid and the individual fails to apply for unblocking within six months, the office may permanently cancel the export or import registration number. Before doing so, the trader must be given a reasonable opportunity to present a defense. This ensures that the cancellation process is fair and follows the principles of natural justice.

Cancellation Due to Repeated Offenses or Legal Violations

The office may also cancel the registration number of any person who is found to have committed serious violations under the prevailing law. This includes those who have been:

Punished under Section 57(1), (10), or (18) of the main Act, or
Repeatedly penalized for submitting false declarations of goods as mentioned in Sub-sections (5), (7), (8), or (9).

Even in such cases, the trader must be given an opportunity to defend themselves before the registration is cancelled.

Goods Already in the Import Process

If goods have already arrived in Nepal or are in the process of being cleared through customs before the code was blocked or cancelled, their clearance should not be halted. However, if the blocking or cancellation was due to unpaid government dues, the goods cannot be released until the dues are fully paid. This provision strikes a balance between maintaining trade flow and ensuring revenue recovery.

Voluntary Cancellation by the Trader

A trader who no longer wishes to continue export or import activities may request the cancellation of their code. This is applicable whether the trader holds a code for both export and import or only one of them. The application for voluntary cancellation must be submitted either electronically or in person, but only after one year has passed since the code was issued. This restriction prevents misuse or premature withdrawal from the system.

Verification Before Cancellation

After receiving a cancellation request, the office will verify if any government dues are pending. If all dues are cleared, the code will be cancelled, and the applicant will be notified. However, no new code or amendment request can be made by the same person for at least one year after the date of cancellation.

Cancellation for Non-Renewal After One Year

If a trader has not renewed their export or import code for more than one year and wishes to cancel it, they may apply to do so. Upon verification that no dues are pending, the office will cancel the registration number without charging any cancellation fee. This is a helpful provision for individuals or businesses who no longer use the code and want to exit the system formally.

Application to Special Code Numbers

The termination and cancellation provisions under Section 9 are also applicable to Special Export or Import Code Numbers issued under Section 7(1)(b). This ensures consistency and accountability across both permanent and special code holders.