Mobile phones prices in Nepal seem more likely to increase in the fiscal year 2075 BS. The reason being is that the Government of Nepal has removed the convenience of VAT refund over mobile phones’ import in Nepal.
The removal of VAT return convenience will certainly hike the prices of already exorbitantly priced mobile phones for Nepalese consumers from the upcoming fiscal year.
Meanwhile, mobile phones importers of Nepal suspect that this removal of VAT refund policy will encourage an increased number of stolen mobile phones in Nepal.
Mobile Phone Importers Association of Nepal and Managing Director of Lifecom Private Limited, Amit Agrawal stated that the mobile phones prices may increase up to 5-7 percent. He also suspected a rise in gray mobile phone market in Nepal.
Mr. Agrawal also said that the Government of Nepal has been returning VAT only up to 40%.
Similarly, the Government is also looking forward to introducing IMEI locking system. Both policies are attempts of Nepalese Government to prevent illegal entries of mobile phones from India and other countries in Nepal.
Another mobile phone importer from Call Mobility, Pulkit Bhimsariya also suspects that this removal of VAT return will encourage illegal entries of mobile phones in Nepal.
Mr. Bhimsariya said the mobile phones prices in Nepal will hike in accordance with the VAT paid. More specifically, importers will not get any VAT return in mobile phones purchase. Previously importers used to get 40% VAT return for every 13% VAT paid to the Government of Nepal upon mobile phones import.
In fact, recently Vatsal Impex, the distributor of Xiaomi phones in Nepal has made it clear that this move is all but sure to increase their smartphone prices in Nepal.
On the other hand, mobile phones importers of Nepal think that the removal of VAT return policy will increase problems in Nepalese mobile phone market which is already affected by the fluctuations in Nepalese and American currency exchange rates in recent times.
There’s a visible difference in mobile phones prices in Nepal and India. This gap in the mobile phone’s pricing is one of the reasons causing illegal import of mobile phones in Nepal from India and other nations and it seems like the problem won’t stop anytime soon.
So what do you think about it? Will you still buy smartphones from official distributors or sneak those [smartphone] boxes from outside the border? Let us know in the comment box below.