The government has stepped in with a relief package for businesses battered by the Bhotekoshi floods, and the headline measure is a big one: a complete waiver of customs duties on replacement commercial and transport vehicles.
The Cabinet approved the package on Thursday, September 3, aiming to help flood-affected businesses get back on their feet and resume operations. For an auto sector that lost hundreds of vehicles when the floodwaters tore through the Rasuwagadhi corridor, it is meaningful support at a difficult moment.
What the Vehicle Waiver Covers
The core of it works like this. Businesses whose commercial or transport vehicles were swept away or damaged beyond repair can now cancel the registration of those vehicles without paying the usual cancellation fee. And when they import a same-type vehicle to replace what they lost, every customs duty that would normally apply at the point of import is waived entirely.
For dealers and transport operators staring at ruined stock and wrecked fleets, that removes a huge chunk of the cost of rebuilding, effectively letting them bring in replacements duty-free rather than paying the full import burden a second time.
Easier Financing to Rebuild
The relief goes beyond the tax waiver. The government has also opened up easier financing for buying replacement vehicles, machinery and equipment. Banks and financial institutions will lend based on an assessment of the actual damage and the insurance compensation due, with loans priced at the bank's base rate plus a prescribed minimum premium.
There is a break on interest rates too. For any flood-affected borrower, the interest rate for one year will be whichever is lower: the base rate plus a 0.5 percentage-point premium, or the borrower's existing premium rate. The government has also said it will review the existing loan-to-value ratio for these loans, which could let affected buyers borrow a larger share of a vehicle's value than usual.
Machinery, Equipment and Lost Goods
The package is not limited to vehicles. Plants, machinery and equipment destroyed beyond repair also qualify. Businesses can import replacements of the same type, up to the quantity they lost, again with a full customs duty waiver.
There is also a smart provision for importers whose goods were destroyed before ever reaching them. If customs duty had already been paid on goods that were then wiped out by the September 3 flood, the importer can bring in replacement goods of the same kind through any customs office within six months, and the duty already paid gets adjusted against that new import. In other words, they will not be charged twice for the same shipment.
Loan Restructuring and Faster Insurance Payouts
For goods that came through the Rasuwagadhi customs point, the damage will be formally assessed, and depending on the nature of the business, the goods and the insurance position, borrowers can ask for their loans to be restructured or rescheduled. That includes an extension on repaying both principal and interest. This restructuring facility will be available once to flood-affected borrowers.
On the insurance side, the government has told insurers to make claim settlements faster and simpler. Policyholders hit by the floods can receive an advance of up to 50 percent of their assessed claim based on the preliminary report, and reinsurers will likewise have to advance insurers up to 50 percent. Insurers have been directed to put a streamlined claims process in place to get money moving quickly.
The Bottom Line
Taken together, these measures target the practical problem facing flood-hit businesses: how to replace lost vehicles, machinery and goods and restart operations without being crushed by import costs and slow-moving loans and claims. For Nepal's auto trade, which absorbed heavy losses at Rasuwagadhi just before the festive season, the duty waiver in particular offers a genuine path to recovery.
For continuing coverage of the flood's impact on Nepal's auto sector and the relief effort, Autoncell is following the story as it develops.
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