Authorities Seize Hundreds of Electric Vehicles Amid Suspicions of Pre-Budget Tax Info Leak
KATHMANDU — The Armed Police Force (APF) has seized 776 electric vehicles (EVs) imported from China following intense suspicions that highly sensitive details regarding upcoming tax hikes were leaked to automobile traders prior to the unveiling of the national budget for the fiscal year 2026-27.
The vehicles—774 of which cleared customs through the remote Korala border point in Upper Mustang and two through the Rasuwagadhi checkpoint—were intercepted during massive overnight security operations spanning the Mustang-Kaski road corridor.
The Pre-Budget Rush
According to Mustang Customs Office Chief Bidur Chudal, a staggering volume of electric vehicles began arriving at the border around May 23. In an unprecedented logistical sprint just 48 hours before Finance Minister Swarnim Wagle presented the national budget on May 28 (Jestha 15), customs officials cleared 649 EV units in a single two-day window on May 26 and May 27.
“The importer brought in around 50 to 60 drivers at once by bus just to rapidly clear and collect the vehicles,” Chudal stated, though he maintained that his office performed the clearances strictly in accordance with existing regulations.
The sudden surge triggered immediate red flags at the central government level, prompting suspicions of collusion among traders, customs agents, and internal officials. Security personnel intercepted the fleet as they were being rushed toward major cities without registration number plates.
EV SEIZURE AT A GLANCE
┌───────────────────────────────┬───────────────────────────────┐
│ Total Intercepted Vehicles │ 776 Units │
├───────────────────────────────┼───────────────────────────────┤
│ Korala Border (Mustang) │ 774 Units │
├───────────────────────────────┼───────────────────────────────┤
│ Rasuwagadhi Border (Rasuwa) │ 2 Units │
├───────────────────────────────┼───────────────────────────────┤
│ Primary Interception Points │ Jomsom, Kusma, and Hemja │
└───────────────────────────────┴───────────────────────────────┘
High-Level Investigation Formed
Following an emergency inter-agency meeting convened by the Ministry of Finance alongside top police and border security officials, a formal on-site monitoring and study committee was established. Led by Department of Customs Director Bhupalraj Shakya, the task force includes investigative representatives from both the Nepal Police and the Armed Police Force.
APF Spokesperson Deputy Inspector General (DIG) Bishnu Prasad Bhatta noted that beyond the suspected tax leak, authorities are also investigating tips that fraudulent or manipulated documentation may have been utilized during the rapid-fire clearance process.
The Financial Motivation: A Drastic Shift in Tax Policy
The rush highlights a recurring pattern in Nepal’s automotive sector, where dealers aggressively adjust import volumes based on anticipated changes in the annual Finance Bill. The fiscal year 2026-27 budget completely restructured how electric vehicles are taxed, transitioning from a motor-capacity system (kilowatts) to an aggressive valuation system based on transaction prices.
The new policy entirely abolishes the previous excise duties but introduces a steep Clean Infrastructure Investment Fee (CIIF) alongside a flat 20% customs duty across all brackets:
-
Under Rs 2 Million: 20% Customs Duty + 2.5% CIIF
-
Rs 2 Million – Rs 3 Million: 20% Customs Duty + 20% CIIF
-
Rs 3 Million – Rs 4 Million: 20% Customs Duty + 35% CIIF
-
Rs 4 Million – Rs 5 Million: 20% Customs Duty + 90% CIIF
-
Above Rs 5 Million: 20% Customs Duty + 130% CIIF
(All brackets remain subject to a 13% Value-Added Tax and a road construction levy).
By clearing 776 vehicles under the older tax regime right before the budget announcement, importers stood to save hundreds of millions of rupees in duties—particularly on high-value models whose retail prices are expected to skyrocket under the new structure.
The high-stakes probe is currently ongoing as the Finance Ministry’s task force examines customs logs, manifestos, and communication data to determine if state secrets were compromised.