The Armed Police Force (APF) has seized 774 suspicious BYD electric vehicles (EVs) imported by Cimex Inc., the authorized distributor for the Chinese automaker in Nepal. The vehicles were intercepted amid allegations that they were cleared through customs on paper before physically reaching the checkpoint to evade incoming tax hikes. The APF took control of the large convoy after it entered Nepal through the Korala border point in Mustang.

According to authorities, the vehicles were detained based on intelligence indicating they were imported using fraudulent documents. Customs officials are currently conducting a detailed examination of the vehicles and their paperwork.

The vehicles, transported by Cimex from the Mustang Customs office toward various destinations, were intercepted and seized by the police immediately upon their arrival at different locations on Wednesday night.

Cimex Inc., the authorised distributor of BYD vehicles in Nepal, appeared to have received advance information about upcoming tax increases before the national budget was announced.

According to customs data, Cimex cleared 1,396 BYD electric vehicles through customs in the month before the budget announcement. As a result, the government is estimated to have lost Rs 1.027 billion in potential tax revenue that would have been collected under the new tax regime introduced in the budget.

In May alone, Cimex imported 1,396 electric vehicles through the Mustang and Rasuwagadhi border points, the highest monthly volume since the company began selling BYD vehicles in Nepal. The imports consisted of 840 BYD Atto-2 units,  409 BYD Atto-1 units,  145 BYD Sealion-7 units, and  2 BYD Atto-3 units.

Under the previous fiscal year's budget, taxes on electric vehicles (EVs) were determined based on motor peak power. However, the new budget presented by Finance Minister Swarnim Wagle on May 29 shifted the taxation system to a value-based structure.

The government abolished excise duty on EVs and introduced the following taxes and charges:

20 percent customs duty on all EVs
A Clean Infrastructure Investment Fee based on vehicle value
A road maintenance charge
13 percent VAT

There are growing concerns that Cimex Inc. may have received prior information from the Finance Administration regarding the planned tax increase. Based on this information, the company appears to have accelerated the customs clearance process for a large number of electric vehicles before the budget announcement.

Reports suggest that more than 150 vehicles were released through Rasuwa Customs based solely on paperwork, even before the vehicles had physically arrived at the customs checkpoint. This raises serious questions about possible coordination between the company and customs authorities to avoid higher taxes after the budget announcement.

Cimex imported 3,220 vehicles during the 12 months of 2025. Even assuming annual sales growth of 20 percent, the company would likely sell around 4,000 vehicles in 2026. In that context, importing nearly one-third of the projected annual sales volume within a single month appears unusual and suggests an attempt to avoid the impending tax increase.

Monthly import data from January to April 2026 further strengthens these concerns. During this period, Cimex had 1,117 BYD vehicles inspected in January, none in February, 304 in March, and 150 in April. However, in May 2026 — just before the new budget took effect — the company reportedly had 1,396 BYD vehicles inspected and cleared through customs.

The sudden spike in customs clearances in the month immediately preceding the budget announcement stands in sharp contrast to previous months. No earlier monthly data indicates imports at such a large scale, leading to speculation that Cimex may have had advance knowledge of the tax changes announced in the budget.