The Nepalese authorities are opening a formal investigation into an allegedly widespread under-invoicing scam involving high-end stores in Kathmandu’s most fashionable shopping street.

Government investigators recently raided outlets for branded products on Durbar Marg, where investigations revealed that the under-invoicing of imports is rampant.

Facing the blame

Following the raids, traders have been criticised for withholding tax revenue while lax procedures at the Department of Customs as well as importers have also been blamed for the problem.

The investigation is to be launched jointly by the Inland Revenue and the Department of Supplies Management.

Exorbitant mark ups

The retailers on Durbar Marg have been accused of marking up prices by as much as 2,300 per cent of invoice values.

It is unclear how much of these high mark-ups are due to undervalued invoices and how much is down to the retailers charging exorbitant prices.

Sealed outlets

Nine stores selling branded merchandise were sealed off following the government’s raids in September but have subsequently reopened.

The sealed outlets sell brands including Nike, Reebok, Puma, Bentley and Levis.