The Mustang Customs Office in Lomanthang-2, Nechung, located in the northern Korala region of Mustang bordering China, has faced significant challenges in revenue collection due to a lack of infrastructure and human resource.
The customs office has seven sanctioned posts, including one branch officer. However, only one non-gazetted officer, one accountant, and one office assistant are currently in place. A computer operator has recently been recruited on a contract basis. Although the Customs Department has assigned a customs officer as the office head, he has not been present in the work area. This shortage of personnel has severely impacted the office's ability to perform its duties effectively.
There is an urgent need to restore the previously sanctioned posts to ensure smooth operations. Due to limited manpower, customs work has been severely hindered, creating major operational challenges.
The Nepal-China Korala border crossing was opened year-round in October of last year to facilitate trade and the supply of daily necessities for residents of Upper Mustang. However, despite being operational for over a year and a half, the Customs Department has yet to build the necessary infrastructure and deploy adequate human resources.
Eight months after the border crossing was officially opened, the Immigration Department under the Ministry of Home Affairs established an immigration office in the Dasgaja area of Korala in October last year. The office was inaugurated by Home Minister Ramesh Lekhak, yet no staff has been deployed there either.
Even after one and a half years, legal complications and the lack of physical infrastructure have hampered revenue collection at the Mustang Customs Office. Current office head Hom Bahadur Bista stated that the absence of essential infrastructure such as food quarantine, animal quarantine, and beverage inspection quarantine facilities in Nechung has further impeded revenue collection from imported goods.
The Mustang Customs Office currently has only a planned quarantine facility in Nechung. The office also has a liaison branch in Jomsom, but preparations are underway to consolidate all staff in Nechung by abolishing the Jomsom branch.
From November to July of the current fiscal year, the customs office collected only Rs 198,000 in revenue. In contrast, Rs 874,000 was collected from November to July in the last fiscal year. According to Bista, revenue collection for the current fiscal year has been significantly lower, with figures standing at Rs 49,849 in August, Rs 40,755 in September, Rs 1,746 in October, Rs 34,934 in November, and Rs 71,629 in December. Only 22.79 percent of the previous fiscal year’s revenue has been collected in the first seven months of the current fiscal year.
Customs revenue in Korala is collected under various categories, including tax on sole proprietorships and personal income, excise duty on imports, customs duty on imports, other customs-related fees, proceeds from the sale of government property, administrative service fees, excise duty, and value-added tax (VAT) on imports.
Residents of Upper Mustang continue to import goods from Tibet’s Liji Bazaar in Korala, China. However, despite the border reopening, no revenue has been collected on the Nepal side, according to Bista.
Since the reopening of the border, approximately 3,000 residents of Upper Mustang have obtained Korala border passes. The District Administration Office, Mustang, has also started issuing Korala departure permits to some residents of Lower Mustang based on local government recommendations.
