https://www.youtube.com/watch?v=iJiC7GXRCkI

This is how the web of corruption is crippling any chance at a better system. There is a top down system of profit sharing while passing down the burden upon the consumers. Notice how the businessman does not want to reveal the name of the wholesale distributor. Even if he does and the wholesaler is apprehended, then his profit margin will suffer.

Thanks for sharing Lurey_Bos

So you want government to determine Profit margin then? I don't see what' the problem here. Even if they buy goods in Penny then can price it 1 million. It's consumer's duty to determine whether or not they should buy that product. If you think the product is expensive then don't buy it. Isn't that so simple?
You can see price variance all the time in US too. Those government official were lucky that they didn't get hurt physically.

it is not as black and white as you think.

In us it is called price fixing or carteling. In every country there is a rule that how much profit one can make. I developed countries it is usually determined by the supply and demand, quality etc.

But sometime Big companies practice price fixing,in that case price is not controlled by supply and demand but manipulated by big companies for profit, artificially elevating price or artificially lowering the price to give a hard time to the competitor.
In US, generally, the antitrust laws require that each company establish prices and other terms on its own, without agreeing with a competitor. When consumers make choices about what products and services to buy, they expect that the price has been determined freely on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. Accordingly, price fixing is a major concern of government antitrust enforcement.

so similar type of fixing has have happened in above case. they all agree to sell the items on elevated price.

In Nepal such type of cartelling/syndicate is everywhere. In transportation, in vegetable market and in real estate. Also in construction projects. If government wants to construct a building all big construction company agree with each other that they wont bid the project lower than certain amount. Say double the cost and they distribute the profit among each other. This type of companies wont allow new company to emerge, they kill start ups.

The situation is such that the ration for the police etc is also elevated and government pays almost 50% more than the market price.

Above Video indicates two possibilities.

1. This my be a general case of price fixing or
2. As that Rajbhandari guy indicated in the video tax evasion by wholesaler in such case what happens is

The wholesaler imports goods worth say 10 billion on that say government levies tax 10% so tax is 1 billion.
But if you declare that you have imported the goods worth only 5 billion then the tax is only 500 million, in this case you already made profit of 500 million.

But if you sell that goods to the retailer charging full price then government will catch you how ?


because you declared good is worth 5 billion but you but charged as if it was worth 10 billion.

so for the retailer the receipt as if the good was worth 5 billion but take cash as if it was 10 billion . So 50% of the money goes out of tax system.In this case the wholesaler or importer is evading the tax system.

Both cases is against the rule of civilized world. US fines different companis millions of dollars every year.


An agreement to restrict production, sales, or output is just as illegal as direct price fixing, because reducing the supply of a product or service drives up its price.

FYI

5 SEPTEMBER 2014
Samsung Electronics must pay a 46.5 billion won (US$45.4 million) fine in Europe for price fixing.

According to the AFP on Sept. 3, the E.U. levied fines worth €138 million (US$178 million) on companies involved in fixing the price of chips in smartphones and bank cards. Those companies include Philips with €20.1 million (US$26.0 million), Samsung with €35.1 million (US$45.4 million), and Infineon Technologies with the largest fine of €82.8 million (US$107 million).

It was ruled that these three firms exchanged information related to chip prices and discussed prices from Sept. 2003 to Sept. 2005.

In a statement, the European Commission said, "These companies fixed the price through bilateral contacts." Renesas Electronics, which also participated in price-fixing, was exempt from paying fines by exposing the collusion. Samsung cooperated with the E.U. in the investigation, and its fines were reduced by 30 percent as a result.

- See more at: http://www.businesskorea.co.kr/article/6243/penalty-bombing-eu-fines-samsung-47-billion-won-price-fixing#sthash.hKXlXViA.dpuf


Price fixing is a crime.

म त नेपाल फर्किए अब अनि कपडा पसल खोल्नु पर्यो. १९९ को सामान लाई १९९९ रे. बबाल नाफा हुने रहेछ

This is a complete violation of someone's business privacy. Would you want the govt to come to your business and make all of your business secrets open for all ? Would sajha.com want the govt to come and publish how much it is charging each and every client ? Its like asking Apple to publish all the intricate details of the cost of Iphone vs the actual price in the market.
Regardless of how much they paid for those goods it is their right to sell it for whatever the price they want. Whether people will buy them is another question. After watching about 3 mins of this episode, I found nothing but self serving & rating points for this so called investigative TV reporter. Good Headline though ... lol !!

It is ridiculous why the 'VAT Department' is not involved in this case, and only the 'Department of Commerce and Supply Management' is involved. The retailers are openly saying they paid more than Rs.2000 but the wholesaler gave them the receipt of only Rs.500, reason of which is clear - to evade the sales/VA Tax.


If what retailers are saying (that they paid more to wholesalers than indicated in the receipt) is not true, then it is clearly a violation of 'Kalobajari Aain' - "Black-marketing and Some other Social Offenses and Punishment Act, 2032 (1975)".


To those who are saying businesses can freely set their sales prices, all i can say is: it seems they are talking about Perfectly Competitive Market, but they don't care if the market we are talking has fulfilled basic assumptions of perfectly competitive market. Provision of regulating bodies (नियमक निकाय ) arises when those assumptions are not fulfilled. Someone can oppose the 1975 Act, but the act was/is totally necessary given the very spirit of all modern time constitutions in Nepal, the preamble of which starts with "लोक कल्याणकारी राज्य कायम गर्न ......" |

I was of the impression that the anugaman was from the counterpart of the IRS in Nepal. If IRS investigates your business then you have to give all the information.

If the wholesalers were putting low sale price but selling to the businessmen at a much higher price then that is a clear case of tax evasion since they show very low revenue to the Revenue Department.

As far as maximum 20% profit law, that is utterly unheard of and it is not something they should be going after. Even a peg of whiskey costs 300-400 Rs so a bar makes over 100% profit on alcohol (in Nepal). Nepali laws need to have same standards for all business.

From consumer point of view, I suppose it's a good move so that the consumers are not screwed too much by businessmen. But from businessmen's point of view it definitely restricts their growth.

when you open the bottle of whiskey in a bar or restaurant that will be under service industry. Value added is everywhere high in service sector. The case is clearly different in wholesale/retail business. There can be debate on 'isn't 20% too low?". But some form of government intervention/regulations on profit is desirable, especially in 'markets' like ours unless you are philosophically opposed to the role of government in everyday life.

Agree with __________, ne0 and cybernepali.

The bigger issue is that the businessmen and even the chief rep of the association was not allowing government official to conduct their business. This should be completely unacceptable if we want law and order in the country. If you have a problem with a law, threatening a government official and/or using force is not the way to fix the problem. What worries me is if they don't get the way they want, they just stop everything and start a fresh protest.

20% profit????lol.

Kiddo, but is it OK for government officials to intervene their regular business during business hours? There are other ways to investigate too like investigate in non-business hours. I support law and order in the country but not by shutting down businesses. Of course I will get offended if someone comes to my business and disturb my business during peak hours.

Can't they come during after business hour and ask for daily receipts? They are not fixing any problem but aggravating the problem.

Again I believe in open market. Government should not dictate how much a business can make a profit. It's consumer's job not the government.

sajhamitra ji, when you say 'open market' i presume you mean 'perfectly competitive market'. I don't think it is that hard to see that businesses in Nepal are not functioning in that type of 'market', at least at द moment. So, some form of government intervention is perfectly normal.

ani who is shutting down the businesses? govt officials or Byapari themselves who want to hide the paperworks? it is clearly a case of sales/VA tax evasion and black मार्केटिंग, so perfectly normal to raid during business hours. यो त १०-१२ वर्ष पहिले सुर्यनाथले घर घर मा गएर राती raid गर्दा "कस्तो अमानबिय व्यवहार गरेको , आफ्नो परिवार संग बसेको बेलामा रेड गर्यो " भनेर मान्छेहरुले गुनासो गरे जस्तै भयो नि होइन ?