Nepalese Authorities Prosecute E-cigarette Smuggling Ring: Over 310,000 Devices Involved, Facing Fines Exceeding $100 Million

Key Points:

• Case Overview: 12 individuals have been charged with large-scale e-cigarette smuggling, including Ramesh Sherpa, chairman of Silk Group. The case has been submitted to the Lalitpur District Court.
• Scale of the Case: More than 316,000 e-cigarettes were smuggled, causing a tax loss of NPR 873 million (about USD 10.02 million). Authorities are demanding nearly NPR 17.5 billion (about USD 100 million) in fines and prison sentences.
• Smuggling Method: The group disguised the activity as legitimate trade, used nearly 100 containers for transport, bypassed restrictions via the Tatopani customs point, and falsified records to evade VAT.
• Current Progress: Ramesh Sherpa, the main suspect, is currently missing. Some of the seized e-cigarettes remain stored at customs warehouses, and the investigation is ongoing.

According to the Kathmandu Post on August 16, Nepal’s Department of Revenue Investigation (DRI) has filed charges against 12 individuals, including Ramesh Sherpa, chairman of the Silk Group, accusing them of engaging in large-scale illegal e-cigarette trade.

The case was filed at the Lalitpur District Court on August 14, demanding prison sentences and fines totaling nearly NPR 17.5 billion (about USD 100 million).

Authorities said the smuggling network disguised its operations as legitimate trade, using nearly 100 containers to transport goods.

The investigation accelerated after a raid on January 7, when 86,400 e-cigarettes were seized from the Silk Group warehouse in Mahalaxmi municipality.

The following day, additional documents and computer equipment were confiscated from company premises in Balkumari and Naxal. According to the DRI, the evidence directly implicated Ramesh Sherpa and his brother-in-law, Silk Group employee Vijay Sherpa.

Although the government has banned the import of e-cigarettes, authorities discovered that such products were still being openly sold in major cities such as Kathmandu. Investigators accused Ramesh Sherpa of bypassing Ministry of Health restrictions by smuggling the devices through the Tatopani customs point. He has since disappeared.

According to DRI spokesperson Krishna Kumari Shrestha, the case also named warehouse operator Mahesh Prasad Pathak and Silk Group employee Santosh Parajuli as co-conspirators. The DRI has requested that these two receive half the prison sentence of the principal offenders.

Evidence showed that Silk Group and its affiliates sold nearly 39,000 e-cigarettes without invoices, falsified purchase records, and created multiple layers of fake transactions to evade VAT.

Investigators stated that the group smuggled more than 316,000 e-cigarettes in total, resulting in NPR 873 million (about USD 10.02 million) in tax losses.

Court documents demand recovery of this amount and impose an equivalent fine, requiring the defendants to pay more than NPR 1.74 billion (about USD 12.48 million). The DRI has also requested maximum prison sentences for Ramesh, Vijay, and the other 10 defendants, while recommending lighter sentences for Pathak and Parajuli due to their secondary roles.

Officials said the investigation is still ongoing, with some of the confiscated e-cigarettes remaining in storage at the Tatopani customs warehouse.

2Firsts notes that the Nepalese High Court had previously issued an order ruling that the government could not restrict the import and sale of e-cigarettes, directing relevant agencies to lift the ban.