HIGHLIGHTS OF BUDGET & KEY TAX PROPOSALS FOR F/Y 2066-67
(only for the reference)
HIGHLIGHTS OF KEY TAX PROPOSALS FOR F/Y 2066-67 The Second Budget of the Federal Democratic Republic of Nepal was presented by Honorable Finance Minister Mr. Surendra Pandey on Ashadh 29, 2066 for the F/Y 2066/67 i.e. 2009/10. The direct tax provisions contained in the Finance Bill shall generally apply to F/Y ending Ashadh 32, 2067 unless specifically stated otherwise. Further, other provisions shall be applicable w.e.f. from Ashadh 29, 2066. The Finance Minister has outlined followings, at the time of budget presentation: Problems and Challenges of the Economy > Lack of improvement in investment climate. > High Inflation > Prioritization in resource utilization > Weak budget implementation and project management > Increasing Unemployment > Weak Performance of Public Enterprises > Energy Crisis > Inadequate Physical and Financial Infrastructure > Climatic Change and Natural Disaster > Poverty, Inequality and Discriminatory Attitude and Practice Basic Thoughts of the Budget > Run on socialism-oriented, people oriented and concepts of public welfare state for the sake of high economic growth and distributive justice. > Structural change in the economy. > Internal source to be increased and external dependency to be reduced for investment sake. > Foreign assistance to be mobilized for large physical and economic infrastructure of national priority, rural infrastructure, agriculture, social sector and inclusive development. > In the long run, to build a self-reliant national economy without the need of foreign assistance. > Mutual economic relationship with the neighboring countries as well as rest of the world. > Macroeconomic stability: the precondition for rapid economic development. Objectives of the Budget: > To facilitate promulgation of the new constitution as per the people’s expectations and bring the peace process to an end. > To create employment by encouraging roles and investments of the cooperative, private and public sectors pursuant to the concept of inclusive development. > To emphasize development of large physical & economic infrastructure for rapid economic growth > To intensify the relief, reconstruction and rehabilitation for the conflict affected, and To provide relief to the people by controlling price and facilitating supply system. Priorities of the Budget > To help draft the constitution by implementing Comprehensive Peace Accord and bringing the peace process to an end. > To maintain law and order by removing impunity. > To increase investment for employment oriented inclusive development. > To implement targeted programs for the uplift and development of the disadvantaged groups, communities and geographical areas
> To emphasize on physical and economic infrastructure development. > To commercialize and modernize agriculture for the transformation of the economy. > To accelerate social development by increasing investment in education, health and drinking water and sanitation sectors. > To improve the power distribution system in order to mitigate the increasing energy crisis by hydroelectricity production and expansion of transmission line. > To mobilize the international assistance for the promotion of national interest. > To let the people feel the existence of a responsible government by improving public administration and service delivery. Major Sectoral Policies and Programs of Budget > > > > > > > > > > > > > > > > > > > > > > > > >
State Restructuring and Institutional Development of Federal Democratic Republic Sustainable Peace, Relief, Rehabilitation and Reconstruction Peace and Security: Expectations of People Poverty Alleviation and Inclusive Programme Women Development and Social Empowerment Youth Mobilization for Nation Building Transformation in Agriculture for Economic Prosperity Irrigation for increased agricultural production Improvement in Land Management Uplift of the Landless Squatters Tourism Development for Wider Economic Growth Private Sector Development and Investment Friendly Environment Labor and Employment Generation Economic Growth and Infrastructure Development Campaign for Employment Energy Development for Economic Prosperity Knowledge, Information and Communication: A Base to Build New Nepal Improvement in Public Distribution System and Price Control Education, the Fundamental Right of People : The base of Progress and Prosperity Primary and Basic Health Service: Fundamental Right of the People. Drinking Water and Sanitation Public Enterprise Reform Public Transport and Management Reform Public Management and Improvement in Service Delivery Mobilization and Utilization of Foreign Assistance in Priority Sectors Increasing Budget Implementation Capacity and Improvement in Project Management
Revenue Policy, Objective and Strategy > To mobilize maximum internal resources through voluntary taxpayer compliance. > To create an investment friendly environment through revenue policy by attracting domestic and foreign capital and gradually eliminating non-tariff barriers. > To adopt investigation process based on scientific information system in order to make revenue leakage control effective. > To develop non tax revenue contribution an important source of total revenue collection. > To regulate and systematize the sales and distribution of items hazardous to human health. > To attract and to give incentive to investment in hydroelectricity and huge infrastructure works. > To lay emphasis on trade facilitation by developing simple and transparent work procedure through the use of information system in customs clearance process.
Growth Rate: > For the Current Fiscal Year, GDP growth rate is likely to register 3.8 % at basic price and 4.7% at produces’ price and Annual Average Inflation is expected to surge by 13%. > From the implementation of the proposed budget, the GDP is estimated to be at 5.5 % at the end of the coming fiscal year. The growth rate in agriculture sector is expected to be at 3.3 % and the non-agriculture sector at 6.6 %. It is estimated that the price level will gradually improve and the inflation rate will be around 7%. Allocation of Budget and Availability of Resources for F/Y 2066/67: Allocation of Budget Total Budget Recurrent Expenditure Capital Expenditure Principal Repayment
Rs. 285 Billion 930.00 Million. Rs. 160 Billion 632.40 Million (56.18%) Rs.106 Billion 284.80 Million (37.17%) Rs. 19 Billion 12.80 Million (6.65%)
Allocation of Budget Total Budget General Administration Expenses Development Related Expenses
Rs. 285 Billion 930.0 Million. Rs. 135 Billion 582.50 Million (47.42%) Rs. 150 Billion 347.50 Million (52.58%)
Estimated Source of Financing: Total Budget Current Source of Revenue Foreign Grants Foreign Loans Deficit
Rs. 285 Billion 930.00 Million. Rs. 161 Billion 73.60 Million Rs. 56 Billion 955.60 Million Rs. 21 Billion 560.60 Million Rs. 46 Billion 340.20 Million
This document is intended for private circulation for the use of our clients only to only provide general outline on the topics covered. Professional Advice to be sought before acting on any information contained herein. G.K. Agrawal & Co. does not assume any responsibility for errors or omissions, if any.
HIGHLIGHTS OF KEY TAX PROPOSALS FOR F/Y 2066-67 ARE GIVEN IN PAGES 5-29
Remark: Amendments for F/Y 2066/67 have been shown in Bold, Italics & Highlighted Fonts.
(only for the reference)
A. DIRECT TAXATION: Rate of Taxation: Tax Rate for Individuals: Particulars Individuals: Resident Individuals - Remuneration Income: -Married (including widow & widower): Up to Rs. 200,000 -Unmarried : Up to Rs. 160,000 On next Rs. 100,000 On Balance Resident Individuals - Proprietorship Firm: -Married (including widow & widower): Up to Rs. 200,000 -Unmarried : Up to Rs. 160,000 On next Rs. 100,000 On Balance On Balance (for Export Income) On balance (for Income from Special Industry) Resident Individuals-Presumptive Tax: Having only Business Income with Annual Turnover up to Rs 20 Lacs and Annual Income up to Rs. 2 Lacs: -In the Metropolitan or Sub Metropolitan Cities -In the Municipalities - In the rest of Nepal Non Resident Individuals: On any amount
Tax Rate
1% 1% 15% 25% Nil Nil 15% 25% 20% 20%
Rs. 5000 Rs. 2500 Rs. 1500 25%
Notes: 1. Resident Disabled Individual shall get an additional 50% of Exemption Limit (i.e. 50% of Rs. 200,000 in case of couple & Rs. 160,000 in case of single). 2. Resident Woman, having only Remuneration Income, shall be entitled to a Tax Rebate of 10%. 3. Individual having Life Insurance Policy shall get an additional exemption from hid Taxable Income to the extent of Rs. 20,000 or Premium Amount, whichever is lower. 4. Husband and Wife, having separate income source, are given option either to get assessed separately or jointly as family. 5. Annual Remote Area Allowance up to Rs. 30,000 is exempted from tax. 6. Employees working in Nepalese Mission abroad are allowed 75% exemption on Foreign Allowances. 7. There is no levy of any Additional Income Tax.
Tax Rates for Entities: Particulars Tax Rate 30% Bank, Finance Company, General Insurance Company, Petroleum Entities; Cigarette, Tobacco, Beer and Alcohol Company Special Industries & IT Industries 20% 20% Entities engaged in construction & operation of Road, Bridge, Tunnel, Ropeway, Trolley Bus and Tram. 20% Co-operative Institution registered under Co-operative Act, 2048 (other than cooperatives dealing in except dealers in Exempted Transaction) 20% Entity wholly engaged in the (BOOT) projects conducted so as to build public infrastructure, own, operate and transfer it to the HMG & in power generation, transmission, or distribution 5% Non-resident person Providing Shipping, Air Transport or Telecommunications Services in Nepal Private Limited Co., Limited Co., Partnership Firm not specifically mentioned above 25%. Airline Services having office in and business in Nepal but not operating flights to and within Nepal All Export Entities Repatriation of income of a Foreign Permanent Establishment of a Non-Resident situated in Nepal. Notes: 1. There is no levy of any Additional Income Tax.
2% 20% 5%
Tax Concession and Rebates: > 10 Years Tax Holiday from date of operation and 50% Tax Rebate thereafter to industries established in Special Economic Zone (SEZ) of Himalayan Districts and other prescribed Hilly District. > 5 Years Tax Holiday from date of operation and 50% Tax Rebate thereafter to industries established in other Special Economic Zone (SEZ). > 100% Rebate for first 5 Years from date of operation and then 50% Rebate for next 3 Years on dividend distributed by industries established in Special Economic Zone (SEZ). > 50% Rebate on Income Tax on income from Foreign Technology or Management Consultancy or Royalty earned by foreign investors of industry established in SEZ. > 10 Years Tax Holiday from date of operation to industries established in remote areas. > 25% Tax Rebate to IT Industries established in prescribed Information Technology Park. > Entities having license for Electricity generation, transmission & distribution, if commences generation / generation & transmission / generation & distribution / generation, transmission & distribution of Hydro-electricity commercial manner by Chaitra end, 2075; such entities shall have Tax Holiday for a period of first 7 Years and 50% Tax Rebate thereafter for 3 Years, from date of such commencement of generation, transmission & distribution. Such facilities shall also be applicable for Electricity generated from Solar/Wind/Organic Materials. However, entities already having started commercial production of electricity before Shrawan 01, 2066 shall be eligible for facility as prevalent at the time of obtaining license.
> 50%, 30% & 25% Rebate on Income Tax for 10 Years including the year of operation to Special Industries operating in Highly Undeveloped, Undeveloped & Under-developed areas respectively. > 10 % Rebate on Income Tax to Special Industries and IT Industries which provide direct employment to 300 Nepalese nationals throughout the year. [Earlier, it was 500 Nepalese]. > 20 % Rebate on Income Tax to Special Industries which provide direct employment to 1200 Nepalese nationals throughout the year. > 20 % Rebate on Income Tax to Special Industries which provide direct employment to 100 Nepalese nationals including 33 percent women, dalits (the downtrodden) or the handicapped, throughout the year.
TDS (Tax Deduction at Source): >
Payments that attract TDS: TDS on following payments needs to be deducted at below given rates: Particulars TDS Rate Remarks F/Y 2066/67 Earlier
Remuneration (Sec.87)
Investment Returns & Service Fees (Sec.88): -Natural Resource Payment -Rent to Individuals -Rent to Others -Royalty -Gain from Investment (Life) Insurance -Gains from Unapproved Retirement Interests -Service Fees -Service Fees paid to Service Oriented Resident registered under VAT -Meeting Allowances -Commission -Commission paid by Resident Companies to Non Residents -Bonus on Sales -Aircraft Lease Payment -Lump Sum Retirement Payment from Approved Fund & Nepal Government under Sec 65(1b) Teaching on Period Basis Dividends: -Distributed by Resident Companies to Residents -Distributed by Resident Companies to Non Residents Interest: -On Deposits / Debentures from Resident Bank, Finance Companies or listed companies and on Govt. Bonds to Individuals not related to business.
Normal Rate of Individual (deductible on monthly basis)
Normal Rate of Individual (deductible on monthly basis)
15% 10% * 10% 15% 5% * 5% * 15% 1.50%
15% 10% * 10% 15% 5% * 5% * 15% 1.50%
15% * 15% 5%
15% * 15% 5%
15% 10% 5% *
15% 10% 5% *
15% *
15% *
5% * 5% *
5% * 5% *
5% *
5% *
Particulars -To Others (not stated above) Contract # Payments above Rs. 50,000 Contract # Payments to Non- Residents: - Contracts related to Service - Contracts related to Air Craft Repair - Other Contracts -General Insurance Premium paid to Non-Resident Co. -General Insurance Premium paid to Resident Co.
-Payment to non-resident person under a contract Others Wind Fall Gain (Prizes, lotteries, or any other casual income either in cash or in kind)
TDS Rate
Remarks
F/Y 2066/67 15% 1.50%
Earlier
10% 5% 5% 1.50% Rate as prescribed by IRD (otherwise, as per above) *
10% 5% 1.50% Rate as prescribed by IRD (otherwise, as per above) *
25%*
25%
15% 1.50%
Gain from Commodities Future Market Transactions Gain from Disposal of Listed Securities (to be deducted by Nepal Stock Exchange)
10%
-To Resident Individuals -To Others (not applicable to Resident entity established under prevalent laws for dealing in purchase/sale of securities) Gain from Disposal of Non- Listed Securities (to be deducted by respective companies)
10% 15%
15% 15%
Decreased
-To Resident Individuals -To Others (not applicable to Resident entity established under prevalent laws for dealing in purchase/sale of securities) Capital Gain from Disposal of Building and/or Land exceeding Rs. 5 Million (to be deducted by respective Malpot Office at the time of Registration) in case of Natural Persons: - Owned for a period up to 5 Years - Owned for more than 5 Yrs (In case of Building, if the building is owned for more than 10 Years and occupied by the owner for more than 10 Years, then the Capital Gain Tax shall not be applicable)
10% 15%
15% 15%
Decreased
5%
-
Newly Defined
10% --
Newly Defined
Newly Defined Newly Defined
* Denotes Final Tax Payment.
Notes: >
>
Rs. 50,000 referred to in Sec. 89 shall be determined by aggregating a payment under a contract with any other payment made by the person or an associate of the person during the previous 10 days under the same contract to the same payee or an associate of the payee. Contract has been defined as agreement entered into for supply of goods or labour or construction/erection/establishment of tangible assets or structure or any work prescribed as contract by the Inland Revenue Department.
Payments that do not attract TDS: > > > > > > > >
Payment of remuneration to the writer of the articles published in Newspaper & Magazines. Payment of remuneration for preparation of question paper or checking of answer sheet Interregional interchange charges paid to a bank issuing Credit Cards. Payment by individual other than payment in course of business and payment of house rent. Interest or fee paid by Nepal Govt, under an agreement, to Foreign Govt. or an international organization (to which Nepal is a party). Payment of interest to a resident bank or other resident financial institution. Payments to Tax-exempted entities. Payment of Annual interest up to Rs. 10000 in the amount deposited to the Micro Credit Institutions, Rural Development Banks, Postal Saving Bank, and Co-operatives in the rural area (Previously, there was no such provision).
Income Source Not To Be Sought For: > Income Source shall not be sought for manufacturing industries (other than cigarette, liquor & beer industries) using more than 50% indigenous raw materials, employing more than 300 national workers or those of national importance such as hydro electricity projects, international airports, tunnel ways, road ways or railways until Chaitra end, 2075.
PAN No. Compulsory: > All income earners and advance tax payers (TDS payers) will have to get PAN Numbers compulsorily. [As per Budget Speech]
Advance Income Tax: >
Income Tax for F/Y should be paid in 3 installments as follows:
Instalment First Second Third
Time Period Up to Mid-January (Poush end) Up to Mid- April (Chaitra end) Up to Mid-July (Ashadh end)
Amount 40% 70% 100%
Where an instalment of tax paid by a person is less than 80% of Tax Payable, interest shall be levied @ 10% for each month and part of month from the date of first installment on the amount to the excess of 80% of the instalment that would have paid over the installment paid. The presumptive tax-payers need not require paying any advance tax as above. Further if the Tax Amount for the F/Y is less than Rs 5000, installment is not required to be paid.
Deduction for General Insurance Business: >
Following Expenses continues to be allowable as deductible expenses for General Insurance Business: i. 50 % of Net Insurance Premium provided for Unexpired Risk & ii. 115 % of outstanding claim at year end as per Insurance Act/Rules.
General Rate of Interest levied by IRD: > General Rate of Interest levied by the IRD to the assessee continues to be 10%. Carry Forward of Loss: > Carry Forward of Loss from Business and Investment can be made up to 7 years. > Carry Forward of Loss can be made up to 12 years in case of Projects building, operating & transferring public infrastructure to the Nepal Government, Projects building Electricity Production House, generating & transmitting electricity and entities dealing in petroleum products under Nepal Petroleum Act, 2040. > Loss incurred in business or investment where assessee enjoys full / partial tax exemption cannot be carried forward.
Penalty for Non-Filing of Income Tax Return on Time: > Non-Filing of Estimated Income Tax Return Income u/s 95 within due date shall attract penalty of Rs. 2000 per Return. > Non-Filing of Income Tax Return Income u/s 96 within due date shall attract penalty of @ 0.10% of Annual Turnover or Rs. 100 per month whichever is higher.
Sundries: > Compensation received by a resident natural person on account of physical injuries due to personal accident shall not be included in his income; likewise, medical expenses incurred in the treatment for such accident cannot be claimed for Tax Adjustment. > Annual Vehicle Tax for person running vehicle on rent is as follows. In case of individuals, the below given tax shall be final: Vehicles Mini Truck / Mini Bus / Truck / Bus Car, Jeep, Van, Micro Bus Auto, 3 Wheeler, Tempo Tractor, Power Tiller
Tax 1,500 1,200 850 750
Special Provision relating to Delay in Filing of Income Tax Return for F/Y 2062/63 -For assesses who have not submitted Self Assessment Tax Return for F/Y 2062/63 u/s 96 of Income Tax Act, 2058 or not deposited fees on account of delay in submission of such Return, following fee shall be charged if the Return is submitted or below given fee is deposited by Poush end 2066: For Assesses who have paid Pre-Assumptive Income Tax: Rs. 100 per month of delay. For other Assesses: Rs. 100 per Month or 0.10% per year of Gross Total Income whichever is higher. Rebate shall be given for balance fee payable under the existing law.
Special Provision relating to Income Tax, Charges & Interest of Co-operative Agencies/Associations Co-operative Agencies/Associations (other than Tax-Exempted Co-operatives) can deposit Tax Return along with Tax amount for Income Year 2063/064 and 2064/065 by the end of Poush, 2066 which shall result in waiver of other fee & interest.
Special Provision relating to waiver of Fee, Interest & Penalt For cases under hearing at Inland Revenue Department/Revenue Tribunal/Court regarding assessment of Income Tax/VAT/Excise Duty up to F/Y 2060/61, if cases are withdrawn and assessed Income Tax/VAT/Excise Duty is deposited by Poush end, 2066; Fee, Additional Charges, Interest & Penalty shall be waived.
Special Provision relating to Tax for Private Educational Institutions Income earners involved in different employments, occupations or investments without PAN numbers, who have not paid or only partially paid taxes (people like consultants, brokers, doctors, engineers, lawyers, auditors, artists, commission agents, employees, professors etc.), if they get PAN numbers within the Magh End, 2066 and submit the tax returns for the F/Y 2064/65 & 2065/66 and pay the tax, shall be exempt from submitting the tax returns of the previous years and enjoy exemption on payment of tax, charge, interest and penalty on it. Those who do not file tax returns and pay tax within this exemption period shall be subject to the payment of all taxes, charges, interest & penalty from the time they were involved in income generation.
Casual (Windfall) Income Introduced As Additional Head of Income Casual (Windfall) Income has been introduced As Additional Head of Income. Casual (Windfall) Income has been brought under Income Tax Act. Earlier, it was under Casual (Windfall) Gain Tax.
B. INDIRECT TAXATION: B.1 Value Added Tax (VAT): Rate of VAT: > Rate of VAT continues to be 13%. Inclusion in the List of VAT Exemption Goods/Services: > Bath Concentrate (Solid or Liquid) used for Dialysis. > Scooter used by handicapped people. > Machinery, tools and spare parts (not manufactured in Nepal) to be imported by Hydropower Projects, on recommendation of Alternative Energy Promotion Centre / Electricity Development Department. Continuity to VAT Exemption availed by Finance Act, 2065 on following Goods/Services: > Soyabean Masyaura. > Raw Material for Feed Supplement under H.C. 23, 28 & 29. > Limestone Powder under H.C. 25. > Raw Materials & Packing Materials for manufacture of IOL (Intra Ocular Lens) > Gear Box of aero plane and helicopter. > All Hydro Power Projects. > Prescribed Goods to be imported in the name of Head Office of Nepal Army, Armed Police Force and Janpath Police under recommendation of respective ministries. Exclusion from the List of VAT Exemption Goods/Services: > Kerosene Oil. > Chyawanprash. > Garlic. > Business/Professional Training & Refreshment Training Courses provided by entities other than Nepal Government Continuity to Exclusion of VAT Exemption availed by Finance Act, 2065 on following Goods/Services: > Certified Orthodox Tea from Organic Fertilizer. > Batteries for Battery-operated-tempo. > Solar Photo-voltic Flat Plate used for Bio-gas, solar power and > Duty free sale of cigarettes and liquor. (However, facilities to be purchased from the authorized bonded ware houses continue to be provided to the persons having diplomatic and exemption status.)
Abolishment of VAT Refund Facility on Certain Goods: > 50% Vat Refund Facility upon sale of Mustard Oil by domestic Mustard Oil Industry has been abolished. > 50% of Vat Refund Facility upon sale of its product by domestic Vanaspati Ghee Industry and Other Refined Edible Oil Industry, has been abolished > 50% of Vat Refund Facility upon sale of Sugar by domestic Sugar Industry.
VAT Refund Facility Reduced on Certain Goods: > Vat Refund Facility has been reduced to 25% {i.e. 25% of (VAT collected on Sales less Vat paid on Purchase)} to Maida Industry on sale of Maida. (Earlier, 50% Vat Refund was allowed).
VAT Refund Facility Increased on Certain Goods: > Vat Refund has been increased to 60% of VAT paid on purchase of Raw Materials of Cellular Mobile or Finished Goods continues to be refundable to Domestic Manufacturer or importer of Cellular Mobile, upon submission of evidence of sale of such items. (Earlier, 50% Vat Refund was allowed).
VAT Refund Facility continued on Certain Goods: > Vat Refund Facility (VAT collected on Sales less Vat paid on Purchase) continues to be availed to Textile, Wooden Match and Tyre-Tube Industries.
VAT Refund for Scooter imported/purchased by Handicapped Person: > Arrangement has been made for refund of VAT paid by the importer on the scooter used by handicapped person at the time of the registration of such vehicle in his name at Transport Management Office on the recommendation of the Ministry of Women, Child & Social Welfare or Chief District Officer.
Limit of Monthly Export Reduced for VAT Refund: > Person / Entity exporting more than 40 % of their monthly sale Export shall be availed Lump sum VAT Refund within 30 days from application date. (Earlier, minimum 50% export of monthly sale was required) Time Bar for VAT Refund: > Application for VAT Refund u/s 24 should be made within 3 Years from the date of end of Tax Period in which the VAT was refundable; otherwise, the same shall not be refunded.
Compulsory Collection of VAT on Construction for Commercial Purposes exceeding Rs. 5 Million: > Compulsory collection of VAT on the construction of buildings, apartments or shopping complexes (or such structures, as prescribed by the IRD) for commercial purposes exceeding the value of Rs. 5 million, from the owners (though such construction be done by Non-registered person).
VAT Collection by Local Authority or International Agencies in Nepal: > VAT to be collected by Local Authority or International Agencies in Nepal, on sale of Taxable Goods and Services VAT Collection on Services Acquired from Person Outside Nepal Not Registered in Nepal: > In case of acquiring services from person outside Nepal not registered in Nepal , VAT on such services shall be determined and collected by the acquires (whether registered in VAT or not).
Bank Guarantee: > Industries having an export over 60% of Total Sales during last 12 months, may import Raw Material to the extent of manufacture of export quantity against Bank Guarantee of VAT Amount at related custom point. > 10% Value Addition in Raw Materials continues to be required on such exports. > Likewise, import for Duty Free Shops through Bonded Warehouse can be done against Bank Guarantee of VAT Amount at related custom point. > Such Bank Guarantee shall be released from the related custom point. VAT Refund Facility for Manufacturers (not having Bonded Warehouse or Pass Book facility): > Manufacturers (not having Bonded Warehouse or Pass Book facility) shall continue to get refund of VAT at Flat Rate at custom point against export of finished goods; 10% Value Addition in Raw Materials continues to be required on such exports. Mandatory VAT Registration for Operation of Business of Certain Goods in Stipulated Area: > Taxpayers operating Motor-parts Business in Metropolitan, Sub-Metropolitan, Municipality, or area stipulated by the IRD have to be registered under VAT within 30 days from operation of such business. > Likewise, Hardware, Sanitary Fittings, Furniture, Fixtures, Furnishing, Automobiles, Electronics, Marbles, Colour-Lab Business operating in above mentioned area continue to be under Mandatory VAT Registration. Mandatory VAT Registration for Taxable Imports above Rs. 10,000 at a time: > Arrangement for compulsory VAT registration has been made for a person importing taxable items exceeding the value of Rs 10,000 at a time for commercial purpose. > Turnover in excess of 20 Lacs (dealing in goods) during preceeding last 12 months. > Turnover in excess of 10 Lacs (dealing in Services) during preceeding last 12 months. > Turnover in excess of 10 Lacs (dealing in goods as well as Services) during preceeding last 12 months.
Time Bar for Tax Assessment: > Tax Assessment may be done within 4 Years from the date of submission of VAT Return; otherwise, the returned submitted shall be deemed as assessed. > However, in case of tax evasion be means of false records, invoices or documents or other fraud, the department may order for Re-assessment at any point of time; no time bar shall be applicable in the case.
Temporary VAT Registration: > Temporary VAT Registration needs to be obtained by the organizer of Temporary Exhibition, fare etc. and traders (not registered under VAT) transacting in taxable goods and services in such exhibitions. Within 7 days from the date of end of such exhibition, return needs to be filed tax needs to be paid.
Self Attested Purchase & Sales Register for Non-Vat Registered Parties: > Non-Vat Registered persons dealing in Taxable goods and services should maintain Purchase and Sales Register duly self-attested.
Sale to Industries Operating In SEZ: > Sale of Raw Materials and Finished Goods to industries operating in SEZ, established under prevalent law, shall be taxed at Zero (0) %.
Sundries: > Zero Rate Facility shall be provided to machinery, tools, equipment and spare parts, manufactured in Nepal, to be sold to Hydropower Projects, on recommendation of Alternative Energy Promotion Centre / Electricity Development Department. > Rate of Interest continues to be 15% for delay in payment of VAT. > The practice of Advance Ruling is available for clarification of any VAT matters.
Special Provision relating to Voluntary VAT Registration for Health Institutions Health institutions liable to collect and pay Health Service Tax may opt to collect and pay value added tax instead by voluntarily registering with the Value Added Tax. Such institutions shall not collect Health Service Tax. Such institutions shall collect VAT for 5 Years from the date of Registration.
B.2 Excise Duty: Levy of Excise Duty: > For goods under Physical Control System: At the time of removal of goods for sale. > For goods/services under Self Removal System: At the time of sale. > For goods imported: At the time of import. > For service imported: As prescribed by the IRD. ________________________________________ > Import of Vehicles: At the time of import. (Two-tier Levy of Excise on imported vehicles has been abolished i.e. Excise Duty shall not be levied on Local Sale of imported Vehicles). Time of Payment of Excise Duty: > For goods under Physical Control System: At the time of removal of goods for sale. > For goods/services under Self Removal System: within 25 Days from the month-end in which the invoices have been issued. > For goods imported: At the time of import. > For service imported: As prescribed by the IRD. Onus of Payment of Excise Duty: > For goods under Physical Control System: Manufacturer. > For goods/services under Self Removal System: Manufacturer of goods/services. > For goods imported: Importer. > For service imported: Importer.
Time of Submission of Return: > Time for submission of Monthly Excise Return continues to be 25 th of next month. Exemption of Excise Duty: > Excisable goods/services exported out of Nepal or sold through Bonded Warehouse or Duty Free Shop continues to be exempted from excise duty (except liquor & cigarettes). > Provision for Cash Deposit / Bank Guarantee before export or sale through Bonded warehouse or Duty Free Shop has been abolished
Duty Free Sale of Cigarettes & Liquor: > Duty free sale of cigarettes and liquor continues to be prohibited. However, exemption of excise continues for purchase of cigarettes and liquor from the authorized bonded warehouses by the persons/entities having diplomatic and exemption status.
Maintenance of Records: > Purchase, Production, Removal, Sales and Stock Register, duly attested by the Excise Officer needs to be maintained. > Excise Records need to be safely kept for 6 Years.
Time Bar for Excise Assessment: > Tax Assessment shall be done within 4 Years from the date of submission of Excise Return; otherwise, the returned submitted shall be deemed as assessed. > However, in case of evasion of excise by means of false return or other fraud, the department may order for Re-assessment at any point of time; no time bar shall be applicable in the case.
Excise Exemption to Industries using Domestic Scraps: > Industries, manufacturing goods by using 90% or more than 90% domestic scraps, shall be exempted from Excise Duty.
Abolishment of Excise License: > Excise License for the production, import, export, storage, sale and distribution of all other excisable items under Self-Removal System have been abolished [except for Brick Industry, Stone Crusher and Tobacco Products Manufacturer (Pan Masala, Chewing Tobacco, Gutka & Khaini), Khandsari Industry, import of Khudo & Jaggery]. > Likewise, Excise License for import of Excisable Goods under Diplomatic Facility recommended by the Foreign Ministry, has been ablosihed.
Domestic Production of Marble: > Excise Duty continues to be exempted on domestic production of Marbles.
Introduction of Excise in Following New Products: Products Plastic Sheet (H.C. 3920, 3921) Kattha Juice
Excise Rate F/Y 2066/67 Earlier 5% 1 | Rs.25 / Kg
Remarks
Excise Rate F/Y 2066/67 Earlier Rs.150 / Litre Rs.140 / Litre
Remarks Increased
Rs.65 / Litre Rs.5 / Pc Rs.230 / Kg Rs.2.50 / Litre Rs.324 / Litre Rs. 210 / M Rs. 445 / M Rs. 570 / M Rs. 730 / M Rs. 950 / M 50%
Increased Increased Increased Increased Increased Increased Increased Increased Increased Increased Increased
New New
Increase in Excise Tariff for F/Y 2066/67:
Drinks other than Beer/Wine with alcohol above 12% (Import) Beer Cigar Pan Masala (containing Lime) Soft Drinks (Alcohol free) Liquor (30UP) Cigarette 70 MM without Filter Cigarette 70 MM with Filter Cigarette (over 70 – up to 75 MM) with Filter Cigarette (over 75 – up to 85 MM) with Filter Cigarette (over 85 MM) with Filter Car, Jeep & Van (Custom Code 8702 & 8703)
Rs.60 / Litre Rs.4 / Pc Rs.230 / Kg Rs.2.50 / Litre Rs.302 / Litre Rs. 195 / M Rs. 415 / M Rs. 530 / M Rs. 690 / M Rs. 915 / M 45%
Excise Rate F/Y 2066/67 Earlier Micro Bus 11‐14 Seater (Custom Code 8702) Double Cab Pick Up (Custom Code 8704) Three Wheeler (Auto Rickshaw) (Custom Code 8703) Single Cab Pick Up (Custom Code 8704) Mini Bus 15‐25 Seater (Custom Code 8702.10.20) Mini Bus 15‐25 Seater (Custom Code 8702.90.20) 15‐25 Seater Vehicle (Custom Code 8702 ) Motorcycle (Custom Code 8711)
>
50% 50%
35% 35%
50% 45%
35% 30%
30%
25%
30% 30%
20% 20%
30%
15%
Remarks Increased Increased Increased Increased Increased Increased Increased Increased
There has been slight increase in excise duty of various liquor items.
Decrease in Excise Tariff for F/Y 2066/67: Products Denatured Spirit (80‐99 % Alcohol)
Excise Rate Earlier F/Y 2066/67 Rs.33 / Litre Rs.10 / Litre
Remarks
Excise Rate F/Y 2066/67 Earlier
Remarks
Reduced
No Changes in Excise Tariff for F/Y 2066/67: Products
5% Bus & Truck (H.C. 8702 & 8704) 10% Equipment with at least 2 functions out of Printer, Copier & Fax 5% Microphone 5% Smart Card 5% Television Camera, Digital Camera & Video Camera Recorder 10% Plates, Cylinders & Equipment for Printing Press (H.C. 84.43) 5% Microphone, Loud Speaker (H.C. 85.18) 5% Television ,Video, digital camera‐ 85.25) 15% Television Receiver (H.C. 83.29) 10% Optical Fibre Cables (H.C. 85.44.70) 15% Insulated Wire, Cables, Conductors Rs. 40 / Qtl Molasses Kattha Rs.115 / Kg 5% Plastic Packing Goods (H.C. 3926) 5% Plastic Other Goods (H.C. 3926. 90.90) Liquor (50UP) Rs.57/ Litre Liquor (70UP) Rs.15 / Litre Pipe Tobacco Rs.575 / Kg Rs. 170 /M.T Cement 15% Parts of Colour Television Rs7.50 / Kg Junk Food (Kurkure, Kurmure, Cheese Ball, Lays, Pastry etc. under H.C. 2106.90.10) Noodles, Macroni & Pasta Rs7.50 / Kg 25% Delivery Van (H.C. 8704)
5% 10% 5% 5% 5% 10% 5% 5% 15% 10% 15% Rs. 40 / Qtl
Rs.115 / Kg 5% 5%
Rs.57/ Litre Rs.15 / Litre Rs.575 / Kg Rs. 170 /M.T 15%
Rs7.50 / Kg Rs7.50 / Kg 25%
Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo Status Quo
Sundries: > Following Vehicles are exempted from Excise Duty: Ambulance, Dead-Body Carrying Vehicle, and Chassis of Battery Operated Tempo. > Collection of Excise Duty on Vehicles’ Stocks purchased up to F/Y 2065-66 shall be as per Finance Act, 2065 (i.e. Excise @ 15% shall be levied). > Excise Duty shall be levied @ 15% on domestic production of Motorcycles. > Electrical Vehicles are exempted from Excise Duty. > MS Wire Rod in Coil (H.C. 7213.91.10) imported as raw material by industries shall be subject to Excise Duty Exemption on the recommendation of Department of Industries.
B.3 Custom Duty: Custom Service Charges: > Custom Service Charges on import/export of goods continues to be as follows:
Charges per Pragyapan Patra On Exports On Imports
Charges Rs. 600 Rs. 500
LDT (Local Development Tax): > Local Development Tax (LDT) has been annulled. Partial Exemption of Import Duty-Major Items: Particulars Generator above 10 KW Capacities. Aircraft, Helicopter, their Gear Box, Engine, Tyre, Battery, Nut, Bolt, Rivet & Parts. Seed of Tori, Rayo, Sarsyo and Canola (Rapeseed) Machine, Equipment, Parts imported by industries (other than H.C. 90.27 goods having Zero Custom Duty) Diamond under Heading 71.02 Natural, Precious & Semi-Precious Stones under Heading 71.03, 71.04 & 71.05 Raw Materials & Auxiliary Raw Materials for Tyre Manufacturing Industries. Vacuum Ironing Table and Steam Iron for Readymade Garments Exporting Industries.
CFL Bulbs (Energy Saver) under Custom Code: 85.39 Generating Parts imported by Generator Manufacturing Industries having VAT Registration. Man Made Staple Fibers under Chapter 55 imported by Carpet Industries Mill Machinery & Equipment (excepting parts) other than House-hold Equipment Under Custom Code 84 having Custom Duty Rate of 5% Air condition having capacity above 4 Ton (under chapter 84) imported by the industries for their industrial purpose. Tanker (under 87) for transportation of Milk imported by the Dairy Industry. Cotton Yarn under heading of custom code 52.05 and 52.07 LP Gas (Earlier 4%) Import of Polyester Film, BOPC film, Extracted Poly-film under heading of 39.19, 39.20 and 39.21 by industries registered in VAT and producing Poly-coating Paper and Printed Lamination Film. Filler Master Batch under Custom Code 39.20. Sari, Lungi, Cotton Towel and Cotton Dhoti under Custom Code 62.11. Gold under H.C. 71.08 Silver under H.C. 71.06 Gold Ornaments under H.C. 71.13
Custom Duty Rate 1% Custom Duty 1% Custom Duty 1% Custom Duty 1% Custom Duty 1% Custom Duty 1% Custom Duty [Earlier 2%] 1% Custom Duty 1% Custom Duty 1% Custom Duty 1% Custom Duty 50% Rebate 4% Custom Duty [Earlier 2.50%] 5% Custom Duty 50% Rebate 80% Rebate 5% Custom Duty 5% Custom Duty
10% Custom Duty 5% Custom Duty Rs. 130 / 10 Grams Rs. 3 / 10 Grams 10% Custom Duty
Particulars Vehicles under Heading 87 operated on Electricity / Battery Tallow Oil (H.C. 15.03), Sodium Silicate (H.C. 2839) & Palm Acid Oil, Palm Fatty Acid & Acid Oil (H.C. 3823) imported by Industries manufacturing Distilled Fatty Acid/ Steric Acid / Glycerin / Soap having Splitting & Distillation Plant. Vehicles under Custom Code 87.04 installed with full refrigeration system for purpose of transport of goods in refrigerated condition Tanker under Custom Code 87.04 for purpose of transport of Milk imported by Dairy Industry UPVC Corrugated Roofing Sheet (Tiles) under Custom Code 3918 Sunflower Seeds and Soybean Seeds imported for manufacture of Soybean Oil and Sunflower Oil
Custom Duty Rate 50% Rebate 50% Rebate
Machinery, Equipment and its parts used for production of organic fuel
1% Custom Duty 50% Rebate 2.50% Custom Duty 1% Custom Duty
Tin box (under 80.07) with its printed name imported by the Dairy Industry. Tractor for Agriculture Purpose Raw Material, Auxiliary Materials, Chemicals & Packing Materials of Pharmaceutical Industry on recommendation of DDA Iron Pipe (for production of leg-guard) imported by Leg-guard Manufacturing Industry on recommendation of Department of Industries. Cable, Battery & Telecommunication Equipment (other than Tower Structure & Shelter) imported for establishment of Exchange and network expansion in rural areas by government / private sector telecommunication operator upon recommendation of Information & Communication Ministry, having Custom Duty more than 5%
10% Custom Duty 80% Rebate 15% Custom Duty 80% Rebate
10% Custom Duty 7% Custom Duty
Changes in Import Duty-Major Items: Custom Code
Description
Custom Duty Rate F/Y 2066/67 Earlier Year 5% 1% 15% 25% 15% 25% 25% 20% 25% 20% 25% 20%
1511.10.00 1701.11.10 1701.12.00 1704.10.00 1704.90.00 1806.10.00 / 1806.20.00 / 1806.31.00 / 1806.32.00 / 1806.90.00
Crude Palm Oil & Crude Palmoline Sugar Chukandar Sugar Chewing Gum, whether or not sugar coated Other Sugar Confectionery Chocolate & other food preparation containing cocoa
1902.11.00 / 1902.19.00 / 1902.20.00 / 1902.30.00 / 1902.40.00
Uncooked Pasta,not stuffed or otherwise prepared
30%
40%
Potato Chips Preserved Potatoes Other vegetables or mixture of vegetables
20% 20% 20%
15% 15%
1905.90.20 2004.10.00 2004.90.00
Custom Code
Description
2005.10.00 2005.20.10 2005.20.90 2106.90.20 2201.10.00 2201.90.00 2202.10.00
Homogenised Potatoes Frozen French Fry Other Preserved Vegetables Pan Masala Mineral Water and Aerated Water Other Waters including mineral waters and aerated water, containing added sugar or other sweetening matter or flavoured
2206.00.10 2402.10.00 2402.20.00 2402.90.00 2515.11.00 2516.11.00 2523.10.00
Country Beer Cigars, cheroots, cigarillos & cigarettes containing tobacco Cigarettes containing tobacco Other Marble & travertine - Crude or roughly trimmed Granite - Crude or roughly trimmed Cement Clinkers
2523.21.00
Portland Cement - White cement, whether or not artificially coloured
2523.29.00
Portland Cement – Other
3918.10.10 / 3918.10.90 3918.90.10/ 3918.90.90 3919.10.00
3919.90.00 39.22 3923.10.90 / 3923.21.00 3923.29.00 / 3923.90.00 3925.30.00 57 72.13 73.04
Custom Duty Rate F/Y 2066/67 Earlier Year 20% 15% 20% 15% 20% 15% 30% 40% 30% 40% 30% 40% 30% 40%
30% Per Thousand sticks Rs 1500
40% Per Thousand sticks Rs 1000
10% 10% Per M.T Rs 1600
15% 15% Per M.T Rs 1400
30%
40%
Per M.T Rs 2800
Per M.T Rs 2500
Floor Coverings of Plastic, whether or not self-adhesive
30%
25%
Self Adhesive Plates, Sheets, Film, Foil, Tape, Strip-in Roll with 20 cm Width
30%
40%
Self Adhesive Plates, Sheets, Film, Foil, Tape, Strip – Others Bath, Shower Baths, Sinks, Wash Basins and similar sanitary ware of Plastic
30%
25%
30%
25%
Articles ofor the Conveyance or packing of goods of plastics; stoppers, lids & other closure of plastics
30%
25%
Shutters, Blinds Carpets & other Textiles Floor Coverings Bars & Rods, Hot-Rolled, in irregular wound coils, of iron or non-alloy steel
30% 30% 30%
25% 25% 15%
Tubes, Pipes & Hollow Profiles, seamless, of iron (other than cast iron) or steel.
20%
15%
Import Duty on Vehicles: > > > > > >
Motor Cycles : 30 % [Earlier 40%] Tractor (H.C. 87.01) : 5% [Earlier 10% & 15%] Bus / Mini Bus (H.C. 87.02) : 30% [Earlier 25, 30% & 40%] Car / Jeep / Van (H.C. 87.02) 80% [No change] There is no change in duty rate of vehicles having Custom Duty @ 80% in earlier year Vehicles having Custom Duty @ 40% in earlier year has been reduced to 30%
Increment in Import Duty - Few Major Items: > Crude Palm & Palmoline Oil, Alcohol, Cigarette, Portland Cement etc. > New Vehicles or any Mode of Transportation can be imported from the Manufacturer Company or Authorized Agent situated at manufacturing company’s country only. Non compliance of this provision may lead to confiscation of such imported vehicles.
Decrement in Import Duty: >
The prevailing rate of customs duty of 40 % has been reduced to 30 % in all cases.
Full Exemption of Import Duty-Major Items: > Pet Chips (Custom Code: 3907.60.00) by POY Manufacturing Industries (within limit prescribed by the Department of Industries). > Fertilizer under chapter 31. > Raw Jute under Chapter 53 to be imported by Jute Industries. > POY & Human made Staple Fibers under Chapter 54 & 55 imported by VAT registered Yarn Industries. > Chassis, Engine, Motor & Battery Charger imported by Manufacturing Industry of Electricity/Solar/Battery operated 3-Wheeler or 4-Wheeler Vehicles. > Various Goods (viz. White Cane, Brale Printer etc.) used by blind people. > Various Goods (viz. Wheel Chair, Tricycle, Artificial Organs, Hearing Aid, Shoes etc.) used by handicapped people. _______________________________________________________________ > Spare Parts imported by Jute Industries for operation of industry under recommendation of Department of Industries. > Bath Concentrate (Solid or Liquid) used for Dialysis under H C 38.24 for Kidney Patients. > Machinery, tools and spare parts (not manufactured in Nepal) and raw material (Steel Sheet required to manufacture such equipment to be imported for generation / transmission / distribution / operation / maintenance by Hydro-power, on recommendation of Electricity Development Department. ^ Zatropa (Sajiwan) grain and seed for manufacture of Organic Fuel.
Continuity to Abolishment of Import Duty - Few Major Items: >
Cellular Mobile Phone, Smart Cards, Television/ Digital Camera & Video Camera Recorder, Plates, Cylinders and other Equipment used by Printing Press (Custom Code 84.43), Computer Hard Disk, Parts of Television Receiver etc.
Sundries: > The rate of custom duty on import shall be levied as per Annex 1 of the Finance Act, 2066. > Rebate in Custom duty on goods of Indian Origin imported from India (other than the goods on which custom duty is levied on quantitative rate) continues to be as follows: For goods falling under Duty Rate up to 25% : 7% Rebate For goods falling under Duty Rate Above 25% : 5% Rebate > Rebate in Custom duty on goods of Chinese Origin imported from China through Letter of Credit (other than the goods on which custom duty is levied on quantitative rate) continues 4%. > Concessional Custom duty on goods imported from SAARC Countries other than goods listed under Section 20 of Annex 1 of the Finance Act, 2066 through Letter of Credit has further been reduced: Custom Duty Rate as on Poush 17, 2062
New Custom Duty Rate Applicable
Existing Custom Duty Rate
5%
5%
5%
10%
8%
9%
15%
12%
13%
25%
18%
21%
36%
24%
27%
40%
24%
27%
80%
24%
27%
(Note: In case the Custom Duty Rate above is higher than the rate prescribed under Annex 1 of the Finance Act, 2066; the lower rate shall be applicable.) > Raw Materials and Auxiliary Materials (including Packing Materials not manufactured in Nepal) can be imported by industries not having facility of Bonded Warehouse upon deposit of custom duty and LDT (on Dharauti), for manufacture of its finished products for the purpose of exported through L/C or Banking Channels or Local Sale in Convertible Foreign Currency within 12 months from the date of import. At least 10% Value Addition is required for the same. However, in case of strike, natural disaster or circumstances beyond control, extension up to 3 months may be given by the Customs Chief, if applied for. Likewise, 10% penalty shall be imposed if such finished products are not exported / sold in convertible foreign currency within the stipulated period i.e. 12 months. However, such imports have to be made from one custom point only. > Arrangement has been made for refunding the customs duty paid by the importer on the scooter used by handicapped people at the time of the registration of such vehicle in his name at transport management office on the recommendation of the concerned agency.
Export Duty: > Export Duty has been abolished on certain live stocks and certain agriculture products. > Export Duty of certain items have been revised as given below: Sub Heading 1404.90.20 2505.10.00 2505.90.00 2516.20.10 2517.10.10 2517.20.10 2516.20.20 2517.10.20 2517.20.20 2516.20.30 2517.10.30 2517.49.10 2517.49.90 3203.00.10 3203.00.90
Item Rudraksha Seed Silica Sand and Quartz Sand Other Sand Gravel, Broken or Crushed Stone, Concrete, Pebbles up to 2.5 inch
Export Duty Rate F/Y 2066/67 Earlier Year Rs. 2/kg Rs. 400/m3 Rs. 400/m3 Rs. 200/m3
New Rs. 150/m3 Rs. 150/m3 Rs. 90/m3
Gravel, Broken or Crushed Stone, Concrete, Rs. 400/m3 Pebbles above 2.5 inch
Rs. 350/m3
Broken or Crushed Stone and Mixture of Rs. 400/m3 Sand and Crushed Stone Dust of Stone produced in Crusher Industry Rs. 200/m3 Other produced in Crusher Industry Rs. 200/m3 Khayar Kutchh Rs. 3/kg Other Rs. 3/kg
Rs. 150/m3 Rs. 150/m3 Rs. 150/m3 Rs. 10/kg Rs. 10/kg
C. Miscellaneous: Formation of Due Settlement Commission For the recovery/settlement/recommendation for settlement of due taxes (Custom Duty, Income Tax, VAT, Excise Duty, Entertainment Tax, Contract Tax, Sales Tax, Air Flight Tax, Hotel Tax) and non-tax amount; a ‘Due Settlement Commission’ shall be formed. Special Provision relating to Education Service Tax -1 % Education Service Tax shall be collected on the Admission Fee and Monthly Fees charged by Private Sector Academic Institutes in Kathmandu valley, Metropolitan city, Sub-metropolitan cities, and district headquarters. -Such Service Tax should be collected by raising Invoices. -Education Service Tax, so collected, and 4-Monthly Return for the same needs to be deposited at the IRO within 25 days from the end of the 4-Month period. -Fine Rs. 1000 per Return shall be levied upon Non submission of Return. -Interest @ 15% p.a. shall be levied in case of non-deposit of Service Tax on time. The Tax Officer may order the closure of such institution upon non-deposit of due Service Tax for a period of 3 months, -1 % Education Service Tax shall be collected from students pursuing abroad for studies, out of foreign exchange allowed. The onus to deduct such Tax and to deposit the same within 15 days from the month end at the Inland Revenue Office shall be on banks providing foreign exchange. -Likewise, arrangement has been made for academic institutes having not paid Education Service Tax to get exemption on payment of charge and penalty, if they pay the Education Service Tax of F/Y 2065/66 within Ashwin end, 2066 through self-declaration.
Reduction in Agriculture Reform Fee -Agriculture Reform Fee has been reduced to 5%. (Earlier, it was 8%). -No such fee shall be charged, if custom duty is levied Special Provision relating to Pass Book / Bank Guarantee for Sugar Industries Vegetable Ghee Industry not being able to export their products whose raw materials were imported on payment of 10% of customs duty, are allowed to sell their product in domestic markets by paying 1% customs duty within Ashwin end, 2066. Pass Book Deposit as well as Bank Guarantee for the same shall be released. Special Provision relating to Pass Book / Bank Guarantee Industries having imported raw materials in Pass Book/Bank Guarantee facility and timely exported the finished goods with a value addition of 20% and 10% during F/Y 2064/65 and 2065/66 respectively and having received forex payments but not applied for release of Pass Book / Bank Guarantee, if apply for release within Bhadra 2066; Pass Book/Bank Guarantee shall be released. Special Provision relating to waiver of Fee & Penalty of Khandsari Industries Annual Renewal Fee up to F/Y 2065/66 payable by Khandsari Industries utilizing Vertical Roller & Horizontal Roller (up to 10 HP), if paid as per rate prescribed for F/Y 2066/67; balance late fee and penalty shall be waived.
Special Provision relating to waiver of License fee for Sugar Cane Industries License fee for sugar cane industries producing molasses using power crusher has been reduced to 50 %.
Health Service Charges: > Health Service Charges @ 5% on Health Services provided by entities other than Nepal Government Community Hospital. (Alternately, they may be voluntarily registered with VAT) > Health Service Charges, so collected, and 4-Monthly Return for the same needs to be deposited at the IRO within 25 days from the end of the 4-Month period. > Fine Rs. 1000 per Return shall be levied upon Non submission of Return. > Interest @ 15% p.a. shall be levied in case of non-deposit of Service Tax on time. The Tax Officer may order the closure of such institution upon non-deposit of due Service Charges for of 3 months.
Casino Royalty: > Annual Casino Royalty continues to be Rs. 20 Million ____________________________________ > The royalty has to be paid within 2 months from the start of the Financial Year. System of Payment of monthly royalty on pro-rata basis has been discontinued
Pollution Control Fee: > Pollution Control Fee @ Rs. 0.50/Litre shall be levied on local sale of petrol & diesel within Nepal. (Earlier, the fee was levied on sale within Kathmandu Valley.) > NOC has to deposit the Monthly Fee for the same within 25th of next month.
Road Construction & Improvement Fee: > Road Construction & Improvement Fee, levied at the time of import, continues to be levied as follows: Items
Petrol Diesel
Fee Amount Rs 2 / Litre Re 1 / Litre
Road Construction & Maintenance Fee: >
Road Construction & Maintenance Fee, levied at the time of registration of vehicle, continues to be levied as follows: Items
Car, Jeep, Van, Microbus, Bus & Truck Motorcycle
Fee Amount 3 % of Cost Rs. 5000
> However, the above shall not be applicable to diplomatic mission, person with diplomatic facility, ambulance and Dead-Body Carrying Vehicle.
Tourism Service Fee: > Provision of Tourism Service Fee has been removed from July 16, 2009. > Arrangement shall be made such that Nepal Tourism Board could reach an agreement with airline companies to collect Rs. 1000 per passenger at air ticket itself effective from that date.
Vehicle Tax: >
Vehicle Tax for Private Vehicles continues to be as follows:
Private Vehicles Car, Jeep, Van, Micro Bus: Up to 2000 CC 2001-2900 CC Above 2900 CC Dozer, Excavator, Loader, Roller, Tripper, Crane Auto, 3 Wheeler, Tempo, Tractor, Power Tiller: Auto Rickshaw, 3 Wheeler & Tempo Tractor Power Tiller Mini Truck / Mini Bus Truck / Bus Motor Cycle: Up to 150 CC Above 150 CC
>
Tax 15,000 25,000 40,000 26,000 4,000 2,500 2,100 13,000 20,000 1,800 3,000
Vehicle Tax for Public Vehicles shall be as follows:
Public Vehicles Car, Jeep, Van, Micro Bus Up to 1300 CC 1301-2000 CC 2001-2900 CC 2901-4000 CC Above 4000 CC Dozer, Excavator, Loader, Roller, Tripper, Crane Auto, 3 Wheeler, Tempo, Power Tiller Auto Rickshaw, 3 Wheeler & Tempo Tractor Power Tiller Mini Truck / Mini Bus Truck / Bus
Tax 5,000 6,000 7,500 9,600 11,800 12,500 2,900 1,450 1,150 8,200 10,600
> Government Vehicle shall be subject to 50% Tax Exemption. > Electric Vehicles shall be subject to 100% Tax Exemption. > Vehicles other than Petrol Vehicles shall be subject to 20% Tax Exemption.
Land / Building Registration Fee: > Registration Fee for Flats constructed under Housing Projects continues to be 1.50%. > Registration Fee for Bungalows (house along with land) constructed under Housing Projects continues to be 2 %.
> Registration Fee for Rajinama above Rs. 50,000 shall be levied @ 4% in Municipality and @ 2% in VDC. > 0.50% Additional Registration Fee continues to be charged for buying and selling the land/building within the metropolitan, sub-metropolitan, municipalities of Kathmandu Valley and VDC adjoining these areas. > Registration Fee @ 3% shall be levied @ 3% in designated VDCs of Kathmandu, Lalitpur & Bhaktapur District. > Rebate in Land Registration Fees continues to be 25% if land is transferred in women’s name. > Rebate in Land Registration Fees to be 25% if land is transferred in person above 70 years age.
Service Charges for Mortgage Registration against loan from Financial Institution & Co-operative Society: > Mortgage Registration Fee has been reduced as follows: Loan Amount Up to 1 Lac Above 1 Lac - 5 Lacs Above 5 Lacs - 10 Lacs Above 10 Lacs - 20 Lacs Above 20 Lacs - 50 Lacs Above 50 Lacs - 100 Lacs Above 100 Lacs - 200 Lacs Above 200 Lacs
Fee 300 500 1,000 1,500 2,500 10,000 15,000 30,000
Administrative Review (Appeal at DG) > Provision has been made to file an application in the department for the administrative review in the cases related to Income Tax, Value Added Tax as well as Excise Duty. Cash deposit of 1/3rd of disputed tax and 100% of undisputed tax payable is required. In case of non-decision within 60 days from the date of application, resort may be taken to Revenue Tribunal. Special Provision relating to Insurance Compulsory Insurance by banks and financial institution deposit up to Rs.200,000 in fixed and saving deposit shall be introduced. Compulsory arrangement shall be made to make third party insurance for Rs. 500,000 in case of public and private vehicles to be effective from Bhadra 01, 2066.
D. Following Major Special Provisions related to Finance Act, 2065 has been repealed: > Contribution of 1 Day’s remuneration in Youth Self-Employment Fund. > 50% Exemption in License Fees of Brick Industry having emission below 50% of prescribed standard. > Voluntary Disclosure of Income Scheme (VDIS). > Declaration of House Rent Income.