Arabica Coffee
Arabica Coffee was struggling with three interconnected problems: complex agricultural tax regulations that the founder did not understand, export documentation that frequently fai…
Key Result
Export Growth
About the Client
Arabica Coffee is an Ilam-based specialty coffee producer cultivating high-altitude arabica beans at elevations above 1,200 meters. Founded by Kumar Lama, the company is one of Nepal's pioneer specialty coffee exporters, shipping premium washed and natural process coffees to specialty roasters in Europe and North America. The unique terroir of Ilam's eastern highlands produces a distinctly floral cup profile that commands premium prices in international specialty markets.
The Challenge
Arabica Coffee was struggling with three interconnected problems: complex agricultural tax regulations that the founder did not understand, export documentation that frequently failed to meet international buyer requirements, and no system for tracking the true cost of production per lot — making it impossible to price exports profitably.
An initial IRD audit in 2020 had flagged irregularities in how agricultural income and business income were being reported, resulting in a penalty notice that had not been resolved.
Our Approach
Resolved the outstanding IRD penalty notice through proper representation and submission of corrected filings
Structured the business to properly separate agricultural income from processing and export income for optimal tax treatment
Worked with the Department of Customs to correct HS code classifications for specialty coffee exports
Designed a lot-based cost tracking system to capture all input costs — from farming through processing to export
Created export documentation templates meeting international buyer requirements including cup score certificates and traceability documents
Established quarterly financial reviews to track export profitability by buyer and by coffee lot
Our Solution
CCBC resolved the outstanding IRD penalty notice through formal representation and resubmission of corrected tax filings. We restructured the business to properly separate agricultural income from coffee processing and export income, unlocking favorable tax treatment under Nepal's agricultural income provisions. A lot-based cost accounting system was built to track all input costs from cultivation through milling and export, giving the founder accurate per-kilogram profitability data for each buyer. Export documentation templates were standardized to meet international specialty coffee buyer requirements, including traceability records and processing method certificates.
Services Delivered
Results That Speak for Themselves
"CCBC understands the unique challenges of agricultural exports in Nepal. They resolved our IRD issues, helped us price our coffees correctly, and gave us the financial clarity to pursue premium international buyers with confidence."
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