Changes in Income Tax and VAT by finance Bill 2075

SECTION -I CHANGES IN INCOME TAX ACT
Contents of Changes
Schedule 1 Section 1(1) Rate of Tax for Resident Individual (Opted as Single)
Schedule 1 Section 1(2) Rate of Tax for Resident Individual (Opted as Couple)
Schedule 1 Section 1(4) Rate of Capital Gain Tax
Schedule 1 Section 1(12) Deduction of Premium paid on Investment Insurance
Schedule 1 Section 1(13) Presumptive Taxation - Vehicles
Schedule 1 Section 1(14) Natural Person (Resident / Non-Resident) involved in Special Industry
Schedule 1 Section 1(15) Natural Person (Resident / Non-Resident) having Export Income
Schedule 1 Section 1(17) Tax based on Transaction
Schedule 1 Section 2(2) Rate of Tax for Entity
Section 4 (4A) Conditions applicable for Tax based on Transaction
Section 11 (3) (a) Exemption for Employment Provider
Old Section 11 (3a) Concession of Dividend Tax = New Section 11 (3L) Concession of Dividend Tax
Section 11 (3c) Concession on Research and Extraction of Petroleum or Natural Gas
Section 11(3m) Conversion of Private Company into Public Company
Section 11(3n) Concession to Tea, Dairy and Garment Industry
Section 11(3o) Concession to Health Organization
Section 11(3p) Concession to Micro Entrepreneurship
Section 21(1)(b) Non-Deductible Expenses
Section 65 (1) Retirement Payment
Section 81(4) Maintenance of Documents
Section 88 (1) (1) Withholding Rate on Approved Retirement Fund
Section 88 (1) (5) Withholding Rate on Rent for Lease of Land and/or Building
Section 88 (1) (8) Withholding Rate on Rent for Transport Service
Section 88 (4) (a1) No Withholding Tax
Section 89 (3) (b) Withholding on Reinsurance Commission
Section 89(3a) Withholding Rate on payment to Consumer Committee
Section 92 (1) (h) Final Withholding Tax
Section 92 (1) (k) Final Withholding Tax
Section 95 (a) (2) Withholding Rates on Capital Gain
Section 95 Ka (7) Withholding Rate at Customs Point
Section 97(1) (d) Persons not Required to File Income Return

Changes in Income Tax and VAT
Section 97(1) (e) Persons not Required to File Income Return
New Section 110 (a) Tax Liability for Joint Venture
Section 117 (d) Interest and Penalty for Tax Exempted Entity
Section 117 (3) Interest and Penalty for Withholding Agent
Section 2 (18) Definition of NBCA
Section 2 (32) Definition of Rent
SECTION -II CHANGES IN VAT ACT
Content of Changes
Section 8 (2) Reverse Charging
Section 10 (2) compulsory Registration
Section 14 (5) Compulsory use of cash machine
Section 14 (A) Electronic invoice
Section 15(3) Collection of tax by unregistered person
Section 18 (1A) Filing of return and payment of tax
Section 25 (C) Refund of Re-export
Section 29 (1C) Penalty on issue of invoice without transferring goods or services
Section 29 (1) (G) (iii) Penalty on electronic invoice
Section 29 (2) Subject to 100% Fine on VAT collected on sale.
Changes in Schedule - I
***Only for Educational Purpose

SECTION -I CHANGES IN INCOME TAX ACT
Reference FY 2074/75 FY 2075/76
Schedule 1 Tax shall be imposed at the following rates on the taxable income Tax shall be imposed at the following rates on the taxable income of
Section 1(1) of a Resident Natural Person in an Income Year: a Resident Natural Person in an Income Year:
Taxable Income Slab Tax Rates Taxable Income Slab Tax Rates
(Opted as Single) Up to 3,50,000 1% SST Up to 3,50,000 1% SST
Next 1,00,000 15% Next 1,00,000 10%
Next 20,50,000 25% Next 200,000 20%
Balance (25% + 40% of 25%) = 35% Next 13,50,000 30%
Balance (30% + 20% of 30%) = 36%
*1% SST shall be levied only on Income from Employment. It is not
applicable for income from pension, income from proprietorship *1% SST shall be levied only on Income from Employment. It is not
and income from investment. applicable for income from pension, income from proprietorship and
income from investment and natural person who contributes to a
contributory pension fund.
Schedule 1 Tax shall be imposed at the following rates on the taxable income Tax shall be imposed at the following rates on the taxable income of
Section 1(2) of a Resident Natural Person in an Income Year: a Resident Natural Person in an Income Year:
Taxable Income Slab Tax Rates Taxable Income Slab Tax Rates
(Opted as Up to 4,00,000 1% SST Up to 4,00,000 1% SST
Couple) Next 1,00,000 15% Next 1,00,000 10%
Next 20,00,000 25% Next 200,000 20%
Balance (25% + 40% of 25%) = 35% Next 13,00,000 30%
Balance (30% + 20% of 30%) = 36%
*1% SST shall be levied only on Income from Employment. It is not
applicable for income from pension, income from proprietorship *1% SST shall be levied only on Income from Employment. It is not
and income from investment. applicable for income from pension, income from proprietorship and
income from investment and natural person who contributes to a
contributory pension fund.
Schedule 1 Tax shall be imposed as follows on the following person subject to
Section 1(4) Rate section 1(3) of this Schedule.
of Capital Gain (a) Tax shall be imposed at the rate mentioned in sub-section (1)
Tax or (2) of this schedule on the higher of the following amounts
by treating the Natural person or Couple as having only such
taxable income:
Tax shall be imposed as follows on the following person subject to
section 1(3) of this Schedule.
(a) Tax shall be imposed at the rate mentioned in sub-section
(1) or (2) of this schedule on the higher of the following
amounts by treating the Natural person or Couple as having
only such taxable income:

i. The total of individual or couple’s taxable income less
the gains; or
ii. Rs. 3,50,000 in case of an individual or 4,00,000 in case
of couple.
(b) The balance of the taxable income is taxed at the rate of 10%,
however
i. If the ownership of NBCA (land or land and building) is
5 years or more, tax shall be levied at 2.5%,
ii. If the ownership of NBCA (land or land and building) is
less than 5 years, tax shall be levied at 5%,
iii. On the gain on disposal of an interest with any entity
(Share) listed in Securities Exchange Board of Nepal,
tax shall be levied at 5%
Schedule 1 Notwithstanding anything contained elsewhere in this section, if a
Section 1(12) Resident Natural Person has investment insurance. Premium paid
Deduction of against such investment insurance or Rs.20,000 whichever is lower
Premium paid on shall be reduced from the taxable income.
Investment
Insurance
Schedule 1 Notwithstanding anything contained elsewhere in this section, the
Section 1(13) following tax shall be collected from the owner of the rented
Presumptive vehicle. If the owner is individual, such tax be final.
Taxation - Vehicles Tax
Vehicles Minibus, Mini-truck, Truck and Bus Rs. 3,000
Car, Jeep, Van, Microbus Rs. 2,400
Three-Wheeler, Auto Rickshaw, Tempo Rs. 1,550
Tractor and Power Tiller Rs. 1,000
i. The total of individual or couple’s taxable income less
the gains; or
ii. Rs. 3,50,000 in case of an individual or 4,00,000 in case
of couple.
(b) The balance of the taxable income is taxed at the rate of
10%, however
i. If the ownership of NBCA (land or land and building) is
5 years or more, tax shall be levied at 2.5%,
iii. If the ownership of NBCA (land or land and building) is
less than 5 years, tax shall be levied at 5%,
ii. On the gain on disposal of an interest with any entity
(Share) listed in Securities Exchange Board of Nepal, tax
shall be levied at 7.5%.
Notwithstanding anything contained elsewhere in this section, if a
Resident Natural Person has investment insurance, Premium paid
against such investment insurance or Rs.25,000 whichever is lower
shall be reduced from the taxable income.
Notwithstanding anything contained elsewhere in this section, the
following tax shall be collected from the owner of the rented vehicle
through Transportation Management Office at the time of
registration or renewal of vehicle. If the owner is individual, such tax
be final.
Vehicles Tax
Car, Jeep, Van, Microbus
a. Up to 1,300 cc Rs. 4,000
b. 1,301 to 2,000 cc Rs. 4,500
c. 2,001 to 2,900 cc Rs. 5,000
d. 2,901 to 4,000 cc Rs. 6,000
e. More than 4,000 cc Rs. 7,000
Minibus, Mini-truck, Water Tanker Rs. 6,000
Mini-Tripper Rs. 7,000
Truck, Bus Rs. 8,000
Machinery apparatus like dozer, excavator, Rs. 12,000
loader, roller, crane

Oil tanker, gas bullet, tripper Rs. 12,000
Tractor Rs. 2,000
Power tiller Rs. 1,500
Three-Wheeler, Auto Rickshaw, Tempo Rs. 2,000
Schedule 1 Notwithstanding anything contained elsewhere in this section, if a
Section 1(14) natural person is engaged in the operation of a special industry
Natural Person mentioned in section 11 of the act throughout the year, tax shall
(Resident / Non- be levied by 20% in place of 25% of the taxable income.
Resident)
involved in
Special Industry
Schedule 1 Tax shall be levied by 15% in place of 25% of the taxable income
Section 1(15) earned by any Natural Person from exports in an Income Year.
Natural Person
(Resident / Non-
Resident) having
Export Income
Schedule 1 The taxable income of a bank, financial institution or general
Section 2(2) Rate insurance business or of an entity carrying on the transaction of
of Tax for Entity cigarette, bidi, cigar, chewing tobacco, khaini, gutka, pan masala,
liquor, beer or of an entity dealing in petroleum business as per
Nepal Petroleum Act, 2040 for an income year shall be taxed at
the rate of 30 %.
Notwithstanding anything contained elsewhere in this section, if a
natural person is engaged in the operation of a special industry
mentioned in section 11 of the act throughout the year, tax shall be
levied by 20% in place of 30% of the taxable income.
If the taxable income earned is from the exports of a natural person
in an income year then tax shall be levied as;
· a concession of 25 % shall be provided on the income that is
otherwise subject to the rate of 20 % (i.e. 15% in place of
20%); and
· a concession of 50% shall be provided on the income that is
otherwise subject to the rate of 30 % (i.e. 15% in place of
30%)
The taxable income of a bank, financial institution or general
insurance business or of an entity carrying on the transaction of
telecommunication, internet service, money transfer, capital
market business, securities business, merchant banking business,
commodity future market, securities and commodity brokerage
business, cigarette, bidi, cigar, chewing tobacco, khaini, gutka, pan
masala, liquor, beer or of an entity dealing in petroleum business as
per Nepal Petroleum Act, 2040 for an income year shall be taxed at
the rate of 30%.
Section 4(4A) The income tax payable by a resident Natural Person under The income tax payable by a resident Natural Person under section
Conditions section 3(a) on the basis of turnover in any income year is equal to 3(a) on the basis of turnover in any income year is equal to the
applicable for the amount provided in section 1(17) of Schedule 1 who meets amount provided in section 1(17) of Schedule 1 who meets any of
any of the following conditions: the following conditions:

Tax based on (a) Taxable income of natural person should be only from
Transaction business having source in Nepal
(b) Medical tax credit under section 51 not claimed as
deduction.
(c) Advance income tax under section 93 is not claimed.
(d) Annual turnover of business shall be above Rs. 20 lacs but
exceeding Rs. 50 lacs.
(e) Business shall not be registered in VAT.
(f) There is no Income from professional service provided by
Doctor, Engineer, Auditor, Legal Practitioner, Sportsman,
Artist, Consultant.
Section 11 (3) (a) Income derived during an income year by a person from a special
Exemption for industry and information technology industry is taxed as follows:
Employment · Special industry and information technology industry that
Provider provides direct employment throughout the year to 300 or
more Nepalese citizens, at 90 percent of tax applicable to
the income of that year;
· Special industry that provides direct employment
throughout the year to 1,200 or more Nepalese citizens, at
80 percent of tax applicable to the income of that year;
· Special industry that provides direct employment
throughout the year to more than 100 Nepalese citizens
including at least 33 percent for women, dalit or disabled,
at 80 percent of tax applicable to the income of that year.
(a) Taxable income of natural person should be only from
business having source in Nepal.
(b) Annual turnover of business shall be above Rs. 20 lacs but
exceeding Rs. 50 lacs.
(c) Business shall not be registered in VAT.
(d) There is no Income from professional service provided by
Doctor, Engineer, Auditor, Legal Practitioner, Sportsman,
Artist, Consultant.
(e) Medical tax credit under section 51 not claimed as
deduction.
(f) Advance income tax under section 93 is not claimed.
Income derived during an income year by a person from a special
industry and information technology industry is taxed as follows:
· If direct employment is provided throughout the year to
100 or more Nepalese citizens, at 90 percent of tax
applicable to the income of that year;
1,000 or more Nepalese citizens, at 70 percent of tax
Provided that, if direct employment is provided throughout the
year to more than 100 Nepalese citizens including at least 33 % for
women, dalit or disabled, additional concession of 10 % on the
payable tax shall be provided.
Section 11 (3) Special industry, agriculture-based industry and tourism industry Special industry, agriculture-based industry and tourism industry
(a1) Exemption that provide direct employment throughout the year to 100 that provide direct employment throughout the year to 100
for Employment Nepalese citizens only, at 70 percent of tax applicable to the Nepalese citizens only, at 70 percent of tax applicable to the
Provider income of that year. income of that year.
Old Section 11 Concession of 100 % of applicable dividend tax on capitalization of Concession of 100 % of applicable dividend tax on capitalization of
(3a) Concession accumulated profit through bonus share by special industry, accumulated profit through bonus share by special industry,
of Dividend Tax agriculture-based industry and tourism industry for expansion of agriculture-based industry and tourism industry for expansion of the
= the capacity of the industry. capacity of the industry.

New Section 11
(3l) Concession
of Dividend Tax
Section 11 (3c) In a case, Entity involving research and extraction of petroleum or
Concession on natural gas starts commercial production up to Chaitra end 2075,
Research and such entity shall exempt from tax for first 7-years and 50% of the
Extraction of applicable tax rate in subsequent 3 years.
Petroleum or
Natural Gas
In a case, Entity involving research and extraction of petroleum or
natural gas starts commercial production up to Chaitra end 2080,
such entity shall exempt from tax for first 7-years and 50% of the
applicable tax rate in subsequent 3 years.
Section 11(3m) No provision. If a company having paid up capital of 50 crore or more which has
Conversion of been operated as a private company is operated after being
Private Company converted into a public company, a concession of 10 % of applicable
into Public tax shall be provided for 3 years form the date of such conversion
Company into the public company.
Provided that, no company which is required to be incorporated as
a public company under Section 12 of Companies Act, 2063 shall
avail the concession under this Sub-section.
Section 11(3n) No provision. Concession of 50% on applicable tax shall be provided to an
Concession to industry producing and processing domestic tea, a dairy industry
Tea, Dairy and transacting dairy products and an industry producing garment on
Garment their income derived from selling their products.
Industry
Section 11(3o) No provision. Concession of 20 % on the applicable tax shall be provided for the
Concession to taxable income of health organization operated by community
Health organization.
Organization
Section 11(3p) No provision. Concession of 100% on the applicable tax shall be provided to a
Concession to micro entrepreneurship for 5 years from the date of
Micro commencement of business or transaction.
Entrepreneurship If such micro entrepreneurship is operated by women, a full tax
exemption shall be provided for additional 2 years.
Section 21(1)(b) Tax to be paid under, and fines and similar other amounts paid to
Non-Deductible government any country or local body thereof for having violated
Expenses any law or any rule or bye-rule framed under that law.
Tax to be paid under, and fines and similar other amounts paid
to government any country or local body thereof for having
violated any law or any rule or bye-rule framed under that law.
Provided that tax paid to provincial government and local bodies
shall be allowed to be deducted as expense.

Section 65 (1) For the purposes of calculating retirement payment income of an For the purposes of calculating retirement payment income of an
Retirement individual from an interest in an approved retirement fund or from individual from a contributory based interest in an approved
Payment retirement payment made by the Government of Nepal, the retirement fund or from retirement payment made by the
following provisions shall apply: Government of Nepal, the following provisions shall apply:
Section 81(4) The department may allow a Person to keep its record under sub- The department may, after prescribing standards and procedures,
Maintenance of section (1) in electronic medium. permit a person to issue invoice through electronic medium
Documents and keep its record under sub-section (1) in electronic medium.
Section 88 (1) In the case of the retirement payment made by the Government
(1) Withholding of Nepal or an approved retirement fund, at the rate of 5 % on the
Rate on gain calculated under Section 65(1)(b).
Approved
Retirement
Fund
Section 88 (1) Payment of rent having a source in Nepal by a resident person, at
(5) Withholding the rate of 10 percent;
Rate on Rent for Provided that, tax shall be withheld at the rate of 1.5 percent on
Lease of Land payment made to a person carrying out the business of renting
and/or Building motor vehicle and registered in VAT in respect of rent of such
motor vehicle.
In the case of the retirement payment made by the Government of
Nepal or contributory based retirement payment made by
an approved retirement fund, at the rate of 5 % on the gain
calculated under Section 65(1)(b).
Payment of rent having a source in Nepal by a resident person, at
the rate of 10 percent;
Provided that,
(a) Tax shall be withheld at the rate of 1.5 percent on payment made
to a person carrying out the business of renting motor vehicle and
registered in VAT in respect of rent of such motor vehicle.
(b) No tax is required to be withheld on the amount derived by
natural person in respect of house rent.
Section 88 (1) No Provision. Payment of rent in respect of transport service, at the rate of 2.5%.
(8) Withholding
Rate on Rent for
Transport
Service
Section 88 (4) Payment in respect of an article published in a newspaper and Payment in respect of an article published in a newspaper and
(a1) No payment in respect of setting question papers or checking answer payment in respect of setting question papers or checking answer
Withholding Tax books books.
Section 89 (3) During payment of premium to non-resident insurance company, During payment of premium to non-resident insurance company or
(b) Withholding at the rate 1.5 % commission (paid out of premium) to be received from non-resident
on Reinsurance insurance company in respect of insurance, at the rate of 1.5 %.
Commission

Section 89(3a) No Provision. During payment of amount exceeding Rs. 50 Lakh made for
Withholding carrying out work through consumer committee, at the rate 1.5 %.
Rate on
payment to
Consumer
Committee
Section 92 (1) Meeting allowance, payment in respect of part-time teaching Meeting allowance of up to Rs. 20,000 per meeting, payment in
(h) Final respect of part-time teaching, payment in respect of setting
Withholding Tax question paper or checking answer books.
Section 92 (1) No Provision. Payment in respect of motor vehicle or transport service of a
(k) Final natural person other than proprietorship firm.
Withholding Tax
Section 95 (a) Applicable withholding tax rate for gain on Securities: Applicable withholding tax rate for gain on Securities:
(2) Withholding Gain on Share of; Resident Others Gain on Share Resident Resident Entity Others
Rates on Capital Listed Resident Entity 5% 10% of; Natural Person
Gain Unlisted Resident Entity 10% 15% Listed Shares 7.5% 10% 25%
Unlisted Shares 10% 15% 25%
Section 95 Ka (7) No Provision. Advance tax at the rate of 5 % on the value determined for the
Withholding purpose of customs duty shall be collected at the customs point on
Rate at Customs the following goods imported for business purpose:
Point · S/he buffalo, he goat, sheep, mountain goat falling under
Chapter 1 of customs code
· Live, fresh and frozen fish under Chapter 3 of customs code
· Fresh flower falling under Chapter 6 of customs code
· Fresh vegetable, potato, onion under Chapter 7 of customs
code and
· Fresh fruit under Chapter 8 of customs code
Section 97(1) (d) An individual who is an owner of vehicle and is liable to pay tax An individual natural person other than proprietorship firm, who is
Persons not under section 1 (13) 0f schedule 1. an owner of vehicle and is liable to pay tax under section 1 (13) 0f
Required to File schedule 1.
Income Return

Section 97(1) (e) No Provision. A natural person having income in respect of disposal of NBCA only
Persons not who does not want to file a return of income.
Required to File
Income Return
New Section No Provision. The coventurer shall be jointly or severally responsible for the
110 (a) Tax purpose of tax payment of the Joint Venture.
Liability for Joint
Venture
Section 117 (d) If tax exempted entity fails to file annual financial statement If tax exempted entity fails to file annual financial statement within
Interest and within Ashoj end of the Fiscal Year, 0.1% p.a. of the annual income Ashoj end of the Fiscal Year, 0.1% p.a. of the annual income
Penalty for Tax without any deduction shall be charged. without any deduction shall be charged.
Exempted Entity
Section 117 (3) Withholding agent who fails to file a statement u/s 90 (1), 1.5%
Interest and p.a. of the tax required to be withheld for every month of delay
Penalty for treating a part of every month as one month.
Withholding
Agent
Section 2 (18) Non-business chargeable asset (NBCA) means land, building and
Definition of interest or security in an entity, other than the following assets:
NBCA (1) Business assets, depreciable assets or trading stock
(2) A private building of a natural person that has been
(a) Owned continuously for 10 years or more
(b) Lived in continuously or intermittently for a total
period of 10 years or more
(3) An interest of a beneficiary in a retirement fund
(4) Land, land and building, and private building of a natural
person that is disposed of for less than Rs. 30 Lakh
(5) An asset that is disposed within three generation
otherwise than sales and purchase
Explanation: For the purpose of this clause, “private building”
means building and land equal to the area covered by the building
or 1 ropani land, which is lower.
Section 2 (32) Rent means all payments including premium in consideration of
Definition of the lease of a tangible property, including house rent.
Rent Provided, the term shall not include payments for natural
resource.
Withholding agent who fails to file a statement u/s 90 (1), 2.5% p.a.
of the tax required to be withheld for every month of delay treating
a part of every month as one month.
Non-business chargeable asset (NBCA) means land, building and
interest or security in an entity, other than the following assets:
(1) Business assets, depreciable assets or trading stock
(2) A private building of a natural person that has been
(a) Owned continuously for 10 years or more
(b) Lived in continuously or intermittently for a total
period of 10 years or more
(3) An interest of a beneficiary in a retirement fund
(4) Land, land and building, and private building of a natural
person that is disposed of for less than Rs. 30 Lakh
(5) An asset that is disposed within three generation otherwise
than sales and purchase
Explanation: For the purpose of this clause, “private building” means
building and land equal to the area covered by the building or 1
ropani land, which is lower.
Rent means all payments including premium in consideration of the
lease of a tangible property, including house rent.
Provided, the term shall not include payments for natural resource
or an amount derived in respect of house rent by a natural person
other than a proprietorship firm.

SECTION -II CHANGES IN VAT ACT
Section 8 (2) The recipient whether registered or not, services in Nepal, from a
Reverse Charging person who is not registered and is outside of Nepal shall have to
assess and collect the tax at the time of payment on the taxable
value in accordance with this Act and Rules framed thereunder
Section 10 (2) If a person dealing with the good and services become taxable, an
compulsory application shall be made to the tax officer, in prescribed format,
Registration for registration within 30 days of becoming taxable
The recipient whether registered or not, services in Nepal, from a
person who is not registered and is outside of Nepal shall have to
assess and collect the tax at the time of payment or at the time of
receipt of service, on the taxable value in accordance with this Act
and Rules framed thereunder.
If a person dealing with the good and services become taxable or
following transactions has been carried on, an application shall be
made to the tax officer, in prescribed format, for registration within
30 days of becoming taxable or commencement of transaction:
· Production and transaction of bricks, operation of business
relating to liquor distributor, wine shop, software, trekking,
rafting, ultra-light flight, paragliding, tourist motorcade
crusher, sand mine, slate and stone
Business of sanitary, furniture, fixture, furnishing, automobiles,
motor parts, electronics, marble, educational consultancy, disco
theque, health club, massage therapy, beauty parlor, catering
service, party palace business, parking service, drycleaners with
machinery and apparatus, restaurant with bar, ice cream industry,
color lab, boutique, tailoring business with materials of suiting and
shirting, supply of uniform to educational organization or health
organization or other entity.
Section 14 (5) The department may order taxpayers to give invoice by using a The department may order taxpayers to give invoice by using a
Compulsory use cash machine or computer. Other procedures on so giving invoice cash machine or computer. Other procedures on so giving invoice
of cash machine by using cash machine or computer shall be as prescribed by the by using cash machine or computer shall be as prescribed by the
department. department.
Section 14 (a) No provision. 1. A taxpayer may issue electronic invoice with the prior approval
Electronic of the department
invoice 2. Notwithstanding subsection (1), the department may by
publishing a notice, order the taxpayers to compulsorily issue
invoice through electronic medium and to link such electronic

medium with the central billing monitoring system of the
department.
The Department shall prepare and implement work method
regarding the security and reliability of software or apparatus from
which invoice is issued through electronic medium. Concerned
producer, distributor and user shall comply with such work order
Section 15 (3) Notwithstanding sub section (1), local government or Nepal Notwithstanding sub section (1), local government, Government of
Collection of tax government are shall collect vat on sale of vat attractive goods Nepal or Provincial government shall collect vat on sale of vat
by unregistered and services. attractive goods and services.
person
Section 18 (1A) Notwithstanding sub-section (1), a taxpayer in a district where
filing of return there is no IRD may Furnish the amount of tax and tax return to be
and payment of paid and submitted by him with the officer of Treasury and
tax Account Controller of the same district within fifteen day of month
in which he has to submit the tax return. And Such Treasury and
Account Controller shall forward the detail of tax return and tax
payment so received to the IRD Office within 7 days.
Section 25 (c) If any goods are re-exported and payment is received in advance
Refund of Re- in Foreign currency, the amount paid for VAT by concerned person
export on purchase shall be refunded to him
Provided that no facility of tax refund under this section shall be
provided in exporting or re exporting any goods on which facility
of tax refund under schedule 1 has been claimed.
Notwithstanding subsection (1), a taxpayer in a district where there
is no IRD or Taxpayers Service Office may Furnish the amount of tax
and tax return to be paid and submitted by him with the officer of
Treasury and Account Controller of the same district within fifteen
day of month in which he has to submit the tax return. And Such
Treasury and Account Controller shall forward the detail of tax
return and tax payment so received to the IRD Office or Taxpayers
Service Office within 7 days.
If any goods are re-exported and payment is received in advance in
Foreign currency, the amount paid for VAT by concerned person on
purchase shall be refunded to him.
Provided that no facility of tax refund under this section shall be
provided in exporting or re exporting any goods on which facility of
tax refund under schedule 1 has been claimed
Section 29 (1C) No provision. A seller issues invoice without transferring goods or services, 50%
Penalty on issue of issued invoice value.
of invoice
without
transferring
goods or services
Section 29 (1) (G) No provision. If a person producing, installing or operating software or apparatus
(iii) Penalty on for issuing electronic invoice does not comply with the work
Electronic method issued by the Department under Section 14KA, shall liable
Invoice for Rs. 5,00,000.
Section 29 (2) If any person commits any of the following offences, tax officer If any person commits any of the following offences, tax officer may
Subject to 100% may impose a fine of 100% of the amount of tax or an impose a fine of 100% of the amount of tax or an imprisonment for
imprisonment for up to 6 month or both punishments: up to 6 month or both punishments:

Fine on VAT a) Preparing false account or invoice or other document:
collected on Sale b) Evasion of Tax by fraud
c) If unregistered person collect vat
d)Violating section 23 (c)
e) Carrying out transaction by Violating section 30
a) Preparing false account or invoice or other document:
b)Evasion of Tax by fraud
c) If unregistered person collect vat
d) If sale is made after under invoicing.
e) Carrying out transaction by Violating section 30
f) Violating section 23 (c)
Changes in Schedule - I
Where a community school imports a vehicle with 30 or more seating capacity to carry students on recommendation of Education, Science and
Technology Ministry, VAT applicable to the extent of one such bus is exempted.
A Taxpayer who have not submitted VAT details since a long period are desirous to participate and submit VAT return regularly, no penalty shall
be levied on their payment.
Vat Refund procedure to the domestic industries producing sugar, cellular mobile phone set, domestic clothes, milk, utensil & circles made from
copper & brass, tea, wheat flour, mustard oil, matches have been withdrawn.
No VAT shall be charged on Health Services provided by Private Hospitals.

Changes in Income Tax and VAT by finance Bill 2075

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