ARMY CHIEF BEGIINS CHINA VISIT MONDAY; ACCORD ON SUPPLY OF MEDICAL EQUIPMENT SIGNED

CHHATH CELEBRATIONS END TUESDAY

Kathmandu, 1 Nov. Chhath celebrations end Tuesday with the worship of the sun.
President Dr. Ram Baran Yadav, who hails from Dhanusha, will observe in at Rani Pokhari in the capital.
CHhath is the main festival of the terai.
Government declared Tuesday a public holiday to mark the festival.
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NEPAL-CHINA TRADE FROM TUESDAY

Kathmandu, 1 Nov.: A five-day 13th China-Tibet-Nepal Economic and Trade Fair 2011 sponsored by ministry of commerce and supplies begins in the capital
Wednesday to promote bilateral trade.

A 19-member Chinese delegation led by Wu Xingjie, executive vice-chairman of Tibet Autonomous Region of China, arrives Tuesday to participate in the fair. More than 60 Chinese traders are participating.
Nepal is showcasing exportable items.
Nepal exported goods worth Rs 746 million to China
in 2020/11 with a huge trade deficit. Nepal is Tibet’s biggest
trade partner.

Imports were worth Rs 45.63 billion from the northern neighbour.
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NEPAL PLAYS SRI LANKA TUESDAY IN
SAARC

Kathmandu, 1 Nov.: Nepal plays Sri
Lanka in the opening match of the
SAARC U-25 Twenty20 Cup on Tuesday in Maldives.
The tournament was postponed by a
day after Bangladesh withdrew at the last moment.’
Nepal is in a group with Karnataka
Institute of India and Pakistan.



For Pudoku Dassanayake, new Sri Lankan coach of the
Nepali team, the tournament will be
the first.
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GOVT. VOWS ACTION AGAINST VAT EVADERS

Kaathmandu, 1 Nov.: Finance Minister Barsha Man Pun on Monday promised stern action against VAT evaders who deprived the national treasury of billions, even as big corporate houses flayed the government for disclosing the names of firms involved in
the scam, Republica reports.

VAT evasion through the use of fake receipts is a serious crime, reiterated Finance Minister Pun at program in Nepalgunj. “The state will take action against them at any cost; we will not hesitate over who is involved in such activity,” he said.

The fresh commitment from the finance minister came a day after the Ministry of Finance (MoF) made public the names of 437 firms, including those belonging to big corporate houses such as Chaudhary Group, Golchha Organization and Kedia Group.

Under the racket which was uncovered about a year ago and was last estimated to involve over Rs 10 billion (over US$ 135 million), the Inland Revenue Department (IRD) had found entrepreneurs either buying genuine VAT receipts from smaller firms or using printed receipts of some other registered traders (without their knowledge) to create fake transactions.

Through such practices they had managed to show higher costs and thus cut tax liability, said Finance Secretary Krishna Hari Baskota, adding that the IRD has already established that 365 firms evaded billions in VAT and other tax, and slapped VAT and fines of Rs 3.45 billion on them.

Worse still, acting on the basis of the fake VAT receipts and customs documents, some of the firms even claimed VAT refund, siphoning funds from the national treasury without contributing a penny to it.

Sarita Enterprises, for instance, had received VAT refund of Rs 5.5 million, and Sarita International, Rs 5.3 million. Likewise, Ashutosh Impex received Rs 17.2 million and Shiva Shakti Impex, Rs 16.9 million, while Digambar Trade House reclaimed Rs 11.26 million, Digambar Trade International received Rs 45.6 million and Bhimeshwar Trade House, Rs 14.3 million in VAT refund on the basis of the forged bills.

Though big corporate houses like Chaudhary Group and Golchha Organization have knocked on the doors of the Revenue Tribunal, senior IRD officials said they were confident of a verdict in their favor.

“VAT and fines slapped on them are backed by solid evidence. Even the administrative review that the IRD director general carried out in response to their appeals has upheld our tax and liability assessment against them,” said a senior IRD official.

Big houses flay govt action
• “The allegation that firms that pay Rs 1 billion in revenue took all that trouble to evade just Rs 12.6 million is ridiculous” --Chaudhary Group
• “I would readily go to jail if the authorities prove Him Electronics issued fake VAT receipts” -- Shekhar Golchha.
• “FNCCI welcomes disclosure of tax evader names. But as some of the firms have knocked on the doors of the Revenue Tribunal, it would be unfair to tag them as wrongdoers right now” -- Suraj Vaidya.
• CORPORATE HOUSES
Big corporate houses, whose firms were named publicly on Sunday for evading value added tax through the use of fake VAT receipts, decried the disclosure, charging the government of not respecting taxpayers´ right to confidentiality.

Some of them even challenged the government to prove their involvement in the fake VAT receipt scam, which is estimated to involve Rs 10 billion (US$ 135 million). Others portrayed themselves as innocent, arguing that they were dragged in not because of their own wrongdoing, but because the vendors (from whom they bought products and services) played foul by not paying the government the VAT paid to them.

For instance, the Chaudhary Group, three of whose business units - CG Foods, CG Impex and CG Electronics - were named in the VAT receipt scam, said its firms have never issued fake bills. “Rather, they landed in a mess because their vendors had either used the fake receipts or did not pay the VAT paid to them,” it said.

The group has admitted that CG Foods, CG Impex and CG Electronics have been slapped tax and fine worth Rs 4.7 million, Rs 4.4 million and Rs 3.5 million respectively.

“Chaudhary Group presently contributes Rs 5 billion to the national treasury. Of that, Rs 1 billion is contributed by these three firms alone. So, the allegation that firms that pay such huge revenue would take all that trouble to evade just Rs 12.6 million is ridiculous,” the group said in its statement.

The group even accused the government of ignoring cases of tax evasion going on for years and targeting big firms only. “We urge the government to investigate all those cases of VAT evasion,” its statement reads.

Similar was the statement from Shekhar Golchha, director of Golchha Organization, whose Him Electronics featured in the VAT evaders´ list. He said Him Electronics had taken VAT credit because it considered that vendors that supplied it with various goods and services had issued genuine VAT bills.

“If the bills turned out to be fake or the vendors did not file the VAT they were paid, it´s not our fault. Sadly, this is what the government has accused us of,” Golchha told Republica.

He even said that he would readily go to jail if the authorities prove that Him Electronics issued fake VAT receipts.

Not surprisingly, most of the entrepreneurs identified in the tax evasion scam had the same story as Golchha or similar ones: they were victims themselves and not culprits. The wrongdoing was attributed to the vendors, who were not traced.

Contrary to the reaction of big corporate houses, President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Suraj Vaidya welcomed the naming of firms evading VAT.

“FNCCI has always stood in favor of making public the names of tax evaders. But I would like to add that some of the firms have knocked on the doors of the Revenue Tribunal and it would be unfair to tag them as wrongdoers now,” he stated.
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MADESH PARTIES DROP ONE STATE DEMAND

Kathmandu, 1 Nov.: Madhes-based parties are dropping their controversial and long-standing demand for one single federal state for the entire southern plains of Nepal, under the new
Constitution, Gani Ansari reports on Republica.

Senior leaders of the United Democratic Madhesi Front (UDMF), a loose alliance of five Madhes-based parties, say they are dropping the demand for the sake of a broader consensus over constitution drafting.

“We would be blamed for derailing the constitution drafting process if we stick to our one Madhes-one state stance,” said a senior Madhesi leader who declined to be named for now for fear of being dragged into controversy.

“So, we plan to compromise over our demand at the eleventh hour,” said the leader.

Madhesi leaders say that they don´t want to disclose their bottom-line for the moment as that would greatly "weaken their bargaining" position in Kathmandu´s corridors of power. Making the entire southern plains one single state has been one of the key demands of the Madhes-based parties ever since the Madhes movement in 2008.

According to sources, the regional parties of the southern plains of Nepal plan to propose two states for the region, but they are yet to decide on the names and delineation of the states.

“But it is not a big issue. We can delineate and name the states through consensus among the parties,” argued the leader.

However, the leaders also say they are wary of the “divide-and-rule strategy” of the major parties. “The major three political parties can create schisms among the Madhesi, Tharu and other marginalized communities,” said one of them.

Leaders of the Tharuhat Samyukta Sangharsha Samiti, which has an alliance with Madhes-based parties, also ruled out the possibility of one single state for the whole region.

“There will be more than one state across the region as both of the communities (Tharu and Madhesi) know very well that one single state is not possible,” said the leaders.

UDMF, Tharuhat Samyukta Sangharsha Samiti and Tharu Kalyankarini Sabha had signed a four-point agreement on July 13 to work together for the establishment of an autonomous federal state, inclusive democracy and proportional representation in state mechanisms.
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DEAL ON HOLD AS TALKS FALTER

Kathmandu, 1 Nov.: The top brass of the three major political parties met today [Monday] and agreed to come up with an integrated draft of consensus on outstanding issues related to the Maoist combatants’ management at the next meeting to be held at the Prime Minister’s official residence in Baluwatar at 4 pm tomorrow [Tuesday], The Himalayan Times reports.

The high-level meeting held at a resort in Budhanilkantha mandated UCPN-Maoist Chairman Pushpa Kamal Dahal, Nepali Congress President Sushil Koirala and CPN-UML Chairman Jhala Nath Khanal to finalise the draft that a three-member taskforce — which comprises representatives from the three parties — has prepared, Nepali Congress General Secretary Krishna Sitaula said.

Though today’s meeting was expected to seal a package deal on the issues of the peace process, state restructuring and formation of Truth and Reconciliation Commission and Commission of Inquiry on Disappearances, it ended on an inconclusive note as leaders sought more time for informal negotiations on the number of Maoist fighters to be integrated and the rehabilitation package for each Maoist fighter, who opts for civilian life. NC and UML leaders, who attended today’s talks expecting a deal, were surprised when Maoist Chairman Dahal proposed revising the taskforce’s draft.

Congress and UML leaders are learnt to have told Dahal they will not agree on revising the draft, which has settled thorny issues of modality, standard norms of the Nepali Army, non-combative role for the integrated personnel and their rank-determination. “Prachanda’s proposal to revisit issues, settled before the prime minister’s India visit, has raised suspicions over the Maoists’ intent,” a Congress leader said seeking anonymity. Still, NC and UML leaders hope to be able to strike a deal by tomorrow evening.

Sources said the three parties have agreed on all issues save the integration number and the dole each combatant opting for civilian life should get. The Congress and the UML are for integrating up to 5,000 combatants into the Nepali Army, while the UCPN-M is for integrating 7,000 fighters.

On the rehabilitation package, the NC and the UML want Rs 6 lakh provided on installments to each fighter opting for civilian life, while the UCPN-M is insisting on providing a lumpsum of Rs 6 lakh to Rs 1 million for each fighter. After talks that lasted nearly three hours, UCPN-M Vice-chairperson Narayan Kaji Shrestha, Congress President Koirala and UML Chairperson Khanal said the talks are heading in a positive direction. They said they will find a solution by tomorrow.

“We discussed all issues and will reach a package deal to resolve them,” UML Chairman Khanal said. Sitaula said that the package deal will have a timebound action plan for management of Maoist fighters, handover of seized properties to the rightful owners with compensation, dissolution of paramilitary structure of Maoist youth wings – YCL – and Revolutionary People’s Council and formation of constitutional commissions.
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ARMY CHIEF BEGINS CHINA VISIT MONDAY WITH AGREEMENT ON SUPPLY OF CHNESE MEDICAL EQUIPMENT.
Kathmandu, 1 Nov.:- Visiting Chief of Army Staff (COAS) Chhatra Man Singh Gurung and his Chinese counterpart Gen. Chen Bingde signed a cooperation protocol in Beijing committing medical equipment worth Rs. 602.7million (40.9 million RMB) for Birendra Sainik Hospital.
The assistance is a part of Rs. 1.42 billion grant pledged by China during the visit of Chinese Army chief to Nepal in March. The Chinese Army will provide medical logistics for conducting MRI test, dental equipment among others as per the new agreement signed at the PLA Headquarters in Beijing.
Gen. Gurung discussed with issues of mutual interest during his meeting with his Chinese counterpart and stressed the need of strengthening cooperation between two armies. Both sides also discussed on increasing trainings for Nepal Army soldiers in China.
The Chinese Army chief is learnt to have lauded Nepal' firm One China-Policy. Gen. Gurung, in return, said Nepal saw China as a "friend for all time" and reitrated the commitment that Nepal will not allow any force to make use of its territory for in anti-China activities.
Gurung is currently in a week long visit to China at the invitation of Chinese Army chief. He is accompanied by his wife Kamala and a six-member Nepali military delegation.
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