Over 300 Face Legal Action in Revenue Leakage and Forex Misuse Cases in Nepal

The Department of Revenue Investigation (DRI) has filed legal cases worth over NPR 10 billion in claims at the High Court and District Courts against individuals involved in revenue leakage and illegal foreign currency transactions over the past 10 months.

A total of 321 individuals have been charged with offenses ranging from customs evasion to unauthorized foreign currency dealings. The department has sought up to five years of imprisonment for the accused, alongside recovery of the defrauded amount.

Major Revenue Fraud Cases Involve Smuggled Goods

The DRI reported that electronic cigarettes (vapes), gold, liquor caps, and footwear smuggled from China were among the most seized items. From the Indian side, the open border in the Terai region has been widely exploited to smuggle clothing items like saris, kurta-salwar, and suiting fabrics.

Fraudulent invoicing and fake billing have also been identified as major mechanisms for tax evasion.

In one of the most significant cases, Nepal Can Move Pvt. Ltd. operated its server from Australia to avoid taxes, leading to a revenue fraud claim of NPR 1.37 billion against six individuals. The company, originally registered to operate a courier service, was found to have conducted cross-border transactions remotely by investors based in Australia.

The second-largest case involved smuggling of gold and silver, with claims amounting to NPR 1.34 billion filed against 47 defendants.

Total of 48 Revenue Fraud Cases Filed

According to Director General Chandiprasad Ghimire, during the fiscal period from Shrawan to the end of Jestha 2081 B.S. (Mid-July 2024 to Mid-June 2025), a total of 48 revenue fraud cases have been filed, targeting 160 individuals. The department has demanded recovery of over NPR 5.25 billion, with prison sentences sought for all involved.

The DRI has also sought NPR 1.16 billion in bail from various firms and companies, of which NPR 551.8 million has already been forwarded to the Inland Revenue Department and Customs Department for collection.

Forex Misuse Cases Also on the Rise

In foreign currency-related offenses, the department has filed 161 cases across several district courts. In 117 of these, claims and penalties amount to more than NPR 5 billion.

One of the largest forex seizures occurred in early Chaitra 2080 B.S. (Mid-March 2024) from Tokha, Kathmandu, involving EUR and USD equivalent to NPR 251.9 million. The vehicle driver involved is in custody, while the primary suspect Narayan Paudel of Sindhupalchok remains at large.

Additionally, NPR 42.4 million in revenue was recovered as penalties through the Vehicle and Consignment Tracking System (VCTS), used during goods transportation inspections.

DG Ghimire Calls for Online Trade Surveillance

Director General Ghimire, who is set to retire after 40 years and 2 months of civil service, warned that the current governmental and technical framework is not enough to prevent evolving forms of revenue leakage. He stressed that online business transactions pose the greatest challenge ahead and emphasized the need for comprehensive government surveillance over international trade conducted via digital platforms.

During his 10-month tenure since October 2024, Ghimire concluded several long-pending cases despite immense pressure and confirmed that no unnecessary raids were conducted on businesses without sufficient evidence.