CUSTOMS DUTIES: SOUTH KOREA TO NEPAL

Overview of Customs Duties from South Korea to Nepal

When exporting goods from South Korea to Nepal, exporters must navigate Nepal's comprehensive customs framework and tariff system. Nepal employs the Harmonized Tariff System (HTS) for classification purposes and maintains a two-tier tariff structure that differentiates between imports from South Asian Association for Regional Cooperation (SAARC) member countries and non-SAARC nations. As a SAARC member, South Korea benefits from preferential tariff rates on most imported items into Nepal, which are generally lower than rates applied to non-SAARC countries. Understanding these regulations, documentation requirements, and duty calculations is essential for successful trade operations between these nations.

General Duty Rates

Nepal's import duty rates vary significantly based on product classification, ranging from zero to 80 percent on an ad valorem basis. The following table outlines typical duty rates for common product categories exported to Nepal:

Product Category	Duty Rate (SAARC Member - South Korea)	Additional Taxes
Machinery and Equipment	5% or lower	VAT 13% on CIF + duty
Agricultural Production Equipment	5% or lower	VAT 13% on CIF + duty
Basic Necessity Goods	5% or lower	VAT 13% on CIF + duty
Medical Equipment	Varies by HS code - contact our experts	Reduced VAT (special COVID rates)
General Manufactured Goods	Varies by HS code - contact our experts	VAT 13% on CIF + duty
Cigarettes and Tobacco	Specific duty: NPR 4,500 per 1,000 pieces	VAT 13% on CIF + duty
Alcoholic Beverages	Specific duty: NPR 1,200 per liter	VAT 13% on CIF + duty

Customs duties are assessed on the Cost, Insurance, and Freight (CIF) value of imported goods. All imported products are also subject to a Value-Added Tax (VAT) of 13 percent, calculated on the CIF value plus the assessed customs duty.

Required Documentation

• Commercial Invoice with detailed product descriptions and values
• Packing List specifying contents, quantities, and packaging details
• Bill of Lading or Airway Bill as proof of shipment
• Certificate of Origin confirming South Korean origin of goods
• Import License or Import Declaration as required by Nepali customs authorities
• Product-specific certifications (health, safety, quality standards as applicable)
• Insurance documents covering the shipment
• Customs Declaration Form completed accurately with all required information

Important Regulations

Tariff Classification: All goods must be properly classified under the Harmonized Tariff System (HTS). Misclassification can result in penalties and delays.

Duty Assessment Basis: Custom duties are calculated on the CIF (Cost, Insurance, and Freight) value of goods. The VAT of 13 percent is subsequently applied to the combined CIF and duty value.

Tariff Changes: Nepal announces changes to import tariffs, duties, and taxes through its annual budget, which must be ratified by Parliament before enforcement. Exporters should regularly consult the Department of Customs website for updated tariff schedules.

Hazardous Products: Certain products considered hazardous to health, including cigarettes and alcoholic beverages, are subject to specific duties rather than ad valorem rates.

Trade Agreements and Preferential Rates

As a SAARC member nation, South Korea qualifies for preferential tariff treatment on exports to Nepal. SAARC member countries generally receive lower duty rates compared to non-SAARC nations. Additionally, Nepal has granted special duty reductions of 5 or 10 percent to designated most-favored nations and specific trading partners.

Export-oriented industries in Nepal that export 90 percent or more of their products may benefit from Export Processing Zone (EPZ) privileges, which can provide advantages for South Korean companies establishing manufacturing operations in Nepal. Raw materials imported for export production can be processed through bonded warehouse facilities with deferred duty payment.

For the most current and specific tariff information applicable to your products, consult the Department of Customs website or contact trade specialists familiar with Nepal's customs regulations.