Bullionnaire Gupta
Narendra Kumar Gupta, 40, believes that any small businessman with a shop in New Road or Asan can develop his own business empire. "You just have to read the mind of customers who come to your shop and change the style of your business to suit your customer's feedback," he says. He himself is an example of how this mantra is an effective one. After he joined his father's export-import business, he says, he followed his instinct and changed the business altogether to focus on the bullion trade.
Paradigm shift
Gupta started bullion trade in 1994 and he wound up the export-import business in 1997, the year in which he set up Shree Ridhi Sidhi Jewellers to focus on bullion. Soon the firm acquired ISO 9001:2000 certification, becoming, as he claims, the first jewellery firm of Nepal to get this distinction. Though other jewelers too got this certificate in the following years, Gupta claims, he alone has been able to maintain it.
Another distinction of Ridhi Sidhi, according to Gupta, is that it has the largest paid up capital among proprietorship firms of the country. Though he does not reveal the actual ount of the capital, he also claims proudly that it is the largest seller of jewelleries in the country and there has been a robust 100 per cent growth in his firm's sales over the last one year.
Meanwhile, he has become active also in the recently established commodities exchange. In fact, he is one of the promoters of the Commodities and Metal Exchange Nepal (COMEN) Ltd. and an active trader in the exchange. He owns the first clearing agency appointed by COMEN and is creating a network across the country for different commodities to be traded in COMEN. Since the concept of commodities exchange is new and most Nepalis are unfamiliar with the way to participate in it, Gupta has started activities to educate people. Recently, he started publicity on forward trading with a message that one can book gold with him to buy it three months later at today's price. He is also preparing the groundwork to import gold.
Advocating Tax Reduction
Politically conscious Gupta likes to spend his leisure discussing the latest political developments with his friends who belong to what he calls informally as a "close circuit club". He is a workaholic who can be found in his office from 9 AM to 9 PM on weekdays. In business forums, he is a very strong advocate for tax reduction. "Smuggling and corruption would be discouraged, and tax collection of the government would increase and the goods would be available at a cheaper price for consumers in case of tax reduction," he says. Citing example of the frequent news of high value electronic goods being smuggled in, he says "Under the present system, it is very much attractive for the trader to hand the merchandise over to those who carry it illegally through customs and deliver them at the importer's Nepal shop." His calculation is simple: If a cell phone set is purchased by an importer for Rs. 1,000 in China , he has to pay Rs. 200 at the Nepal Customs. A mark up of 10 per cent (or Rs. 120) for profit will bring the cost up to Rs. 1,320 on which 13 per cent VAT is applicable. Thus the selling price of the set comes to Rs. 1490.60. But if the same set is handed over to a smuggler, he charges Rs. 50 per set to get it through the Customs. The same mark up of Rs. 120 for profit will make the selling price Rs. 1,170 only. Since the article is smuggled, there will be no bill issued and no VAT. Thus the consumers naturally prefer to buy from a smuggler. In this case, the government doesn't get any income tax.
Whereas if the customs duty is reduced to 1 per cent, there will be no incentive for smuggling goods. Why pay Rs. 50 to a smuggler if you can legally import it by paying only Rs. 10 as customs duty? And the government will get not only the customs duty but also the VAT and income tax. In this case, the landed cost of the material will be Rs. 1,010 which comes to Rs. 1,130 with the same Rs 120 profit margin. The VAT will be Rs. 146.90 and the selling price Rs. 1,276.90. And there will be only duty-paid articles available in the market which will help to make the society less corrupt. "But it has been very hard to convince the authorities about this fact. However, we now hope that the coming budget will take this into consideration," he says.
Let's pray that his hope doesn't merely remain so.
