Petroleum deal with China delayed by taxation issuesLack of clarity over double taxation on petroleum products from China will delay the signing commercial agreement with Petro-China.
Lack of clarity over double taxation on petroleum products from China will delay the signing commercial agreement with Petro-China. For now, the government is sending a technical team of Nepal Oil Corporation (NOC) to China on Monday to clarify the issue of taxation before a high level government team travels to Beijing to sign the commercial agreement.
According to the Ministry of Commerce and Supplies (MoCS), the government has postponed its earlier plan to sign the commercial deal to import petroleum from China with considering first to settle the fuel prices along with the tax.
“As the government has been making effort to avoid the double tax on petroleum products before signing the commercial deal, we have postponed the government level visit for now,” said the MoCS Spokesperson Shambhu Ghimire. According to the ministry, the NOC’s directors Sushil Bhattarai and Deepak Baral will be heading to China on Monday.
Earlier, the government team was set to leave to China on Sunday to sign the commercial agreement to import petroleum. Although the government has been seeking the Chinese side to waive the local taxes there, China has not officially confirmed on waiving the local tax and export duty on petroleum.
Ghimire said they were sending the technical team after China had remained silent on waiving the tax on petroleum they would export. “Although China has unofficially agreed to waive the tax, it has not officially confirmed on the issue,” he said. According to him, the technical team will also discuss on risk, transport subsidy along with the tax there besides the fuel price.
On the last Thursday, the government was all set to send a seven member team led by Ghimire to China. The team was supposed to sign the agreement paper.
Provided China will waive the local tax, the NOC would be able to provide the petroleum products at similar price as the fuel imported from India. “However, the cost will go up to 170-180 liters if we have to import through paying tax,” said the NOC’s Spokesperson Mukunda Ghimire.