chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Value Added Tax Act, 1996

Added by Finance Act, 2076. 10D. Special Provision regarding Updating of Registration Records: (1) Persons registered under this Act shall update registration-related information and records as prescribed by the Department in the biometric registration system of the Department, Deleted by Finance Act, 2078

Amended by Finance Act, 2075. 11. Cancellation of Registration: (1) The Tax Officer shall cancel the registration of a registered person in any of the following circumstances:-

(a) If the entity is an organized body and such organized body is closed, sold, or transferred, or its existence ceases for any other reason,

(b) If the ownership is individual and the person owning it dies,

(c) If the firm is a partnership and such partnership is dissolved or a partner dies,

(d) If the registered person ceases to carry out taxable transactions,

(e) If the taxpayer has submitted nil returns or fails to submit returns for a continuous period of twelve months,

(f) If the taxable transaction of the taxpayer in the last twelve months is less than fifty lakh rupees for goods, and less than Amended by Finance Act, 2081. thirty lakh rupees for services or mixed transactions of goods and services,

(g) If registered by mistake.

(2) Notwithstanding anything written in clause (f) of subsection (1), if a taxpayer voluntarily registered under Section 9 wishes to maintain his/her registration, the registration of such taxpayer shall remain valid upon submission of an application in the prescribed format along with the last return of the preceding twelve months.

(3) Within fifteen days of the submission of the tax return for cancellation of registration, the taxpayer shall submit documents for tax audit, and the Tax Officer shall audit such taxpayer and cancel the registration within three months, or if the registration is not to be cancelled, inform the taxpayer accordingly. If the Tax Officer does not cancel the registration or does not decide that the registration shall be cancelled within that period, the taxpayer shall not be required to submit tax returns after that period.

(4) The stock of capital goods, among goods for which input tax credit was previously taken, remaining at the time of cancellation of registration, shall be deemed supplied at market price and tax shall be assessed and collected.
Value Added Tax Act, 1996

Explanation: For the purpose of this subsection, "capital goods" means any asset or any part of an asset and assets used in taxable transactions.

(5) If any act or omission during a taxable transaction of goods or services leaves any act or liability to be performed or borne under this Act, the cancellation of the taxpayer's registration shall not absolve such taxpayer from such liability.

(6) Other procedures relating to cancellation of registration shall be as prescribed. 12. Taxable Value: (1) Save as otherwise provided in this Act, where the consideration is solely in cash, the price charged by the supplier from the recipient shall be the taxable value.

(2) The taxable value shall include Added by Finance Act, 2075. the following amounts as well:-

(a) Transportation and distribution related expenses borne by the supplier in the course of the transaction and profit margin,

Amended by Finance Act, 2075. (b) Excise duty, royalty, and other taxes, excluding the tax under this Act. Explanation: For the purpose of this clause, "other taxes" means fees, charges, or other levies applicable as per the annual Finance Act.

(3) Discount, commission, or other similar trade discount given in the price when supplying goods or services shall not be included in the taxable value.

(4) The taxable value of goods or services exchanged under barter shall be equal to the market price of the goods or services so exchanged.

(5) Save as otherwise provided in this Act, while determining the taxable value of imported goods, the taxable value shall be determined by adding the import price including transportation, insurance, commission of agents and other persons, etc., import duty, equalization duty, and any other tax leviable on import, excluding value added tax.

(6) If the price of any goods or services is significantly lower than the prevailing market price, the taxable value of such goods or services shall be equal to the market price.

(7) The taxable value of goods or services supplied for partial consideration shall be equal to the market price.

(8) Any deposit amount kept for any goods or services shall not be considered taxable value until it is adjusted as consideration for such goods or services as prescribed by the supplier. 12A.
Value Added Tax Act, 1996

12A. Tax on Timber Transaction: (1) Tax shall be levied and collected on timber of national forests at the time which is earliest among the time of auction, issuance of clearance certificate, or sawing order, on the royalty amount or auction amount, whichever is higher.

(2) If timber from private homestead, private forest, or community forest is sold for commercial purposes, tax shall be levied as in the case of timber from national forests as provided in subsection (1), even if no royalty is leviable. 13. Market Price: Amended by First Amendment. (1) The market price of goods or services supplied on any day shall be determined taking into account the consideration receivable for similar goods or services supplied freely between unrelated persons.

(2) For the purpose of this section, the procedure for determining market price shall be as prescribed.

(3) If the market price of any goods or services cannot be determined under subsections (1) and (2), the market price of such goods and services shall be determined according to the procedure prescribed by the Director General. 14. Obligation to Issue Invoice: (1) Every registered person shall, except in circumstances as prescribed, issue an invoice to the recipient when supplying any goods or services.

(2) The format of the invoice shall be as prescribed.

(3) It shall be the duty of the recipient to obtain an invoice. Added by Finance Act, 2075. (4) A person transporting taxable goods exceeding ten thousand rupees outside the area prescribed by the Department shall carry the tax invoice with him/her.

(5) The Department may, by publishing a notice or issuing a written order, designate any person to make public the retail sale price of any prescribed goods for the period specified in that notice or order. After receiving such notice or order, no goods shall be sold or transferred without making the retail sale price public.

(6) Amended by Finance Act, 2076. A person designated under subsection (5) shall, when selling such goods to an unregistered person, issue an invoice in the prescribed format at the made-public price and make arrangement to collect tax at the consumer level as well. Provided that Amended by Finance Act, 2076. any person not designated under subsection (5) may also voluntarily issue an invoice under this subsection. 14A.
Value Added Tax Act, 1996

Provided that Amended by Finance Act, 2076. any person not designated under subsection (5) may also voluntarily issue an invoice under this subsection. 14A. Electronic Invoice: (1) A taxpayer may issue an electronic invoice with prior approval of the Department.

(2) Notwithstanding anything written in subsection (1), the Department may, by publishing a notice, order taxpayers specified in such notice to mandatorily issue invoices through electronic means and to link such electronic means to the Central Invoice Monitoring System (CIMS) of the Department.

(3) The Department shall establish and implement procedures regarding the security and reliability of the software or equipment for issuing invoices through electronic means. Such procedures shall be followed by the concerned producers, distributors, and users. 15. Unregistered Person Not to Collect Tax: (1) An unregistered person shall not issue any invoice or document indicating collection of tax, nor collect tax.

(2) If any unregistered person collects tax, the tax so collected shall be assessed and recovered from him/her.

(3) Notwithstanding anything written in subsection (1) or (2), the Government of Nepal, a Provincial Government, a Local Level, or an international organization, institution or mission in Nepal, or a public entity transacting goods not subject to value added tax shall collect tax when selling goods or services subject to value added tax. 16. Maintenance of Accounts of Transactions: (1) A taxpayer shall maintain up-to-date accounts of his/her transactions for the tax period under Section 18, and shall make such accounts available to the Tax Officer wherever they are, if the Tax Officer requests to inspect them.

(1A) The Department may have continuous access to the computer database of the taxpayer.

(2) The accounts kept by the taxpayer shall include the following matters:-

(a) Date of transaction,

(b) Value of each transaction,

(c) Registration number of the other party to the transaction, if registered, and

(d) Other matters as prescribed relating to the transaction.

(3) Amended by Finance Act, 2078. A registered person shall use a purchase and sales account ledger certified by the concerned Tax Officer for the purpose of maintaining accounts.

(3A) Deleted by Finance Act, 2078.

(4) A taxpayer shall keep the accounts of transactions safe for the prescribed period.

(5) Added by First Amendment. Accounts maintained by a taxpayer upon completing the procedure prescribed by this Act or the rules made under this Act shall be accepted as valid until proven otherwise. 16A.
Value Added Tax Act, 1996

Accounts maintained by a taxpayer upon completing the procedure prescribed by this Act or the rules made under this Act shall be accepted as valid until proven otherwise. 16A. Computer Processed Records Admissible as Evidence: (1) Notwithstanding anything written in the prevailing law, records processed by computers available at the Department or its subordinate offices relating to the taxpayer shall, for tax purposes, be admissible as evidence unless proven otherwise.

(2) The Department may, by publishing a notice, make necessary arrangements regarding issuing invoices through electronic means, maintaining accounts, submitting tax returns, and making payments. 16B. Deduction of Tax Paid on Lost Goods: Value added tax paid on goods lost or damaged due to fire, theft, accident, breakage, or destructive activities, Added by Finance Act, 2078. or whose useful life has expired, may be deducted as prescribed. 17. Input Tax Credit: (1) A registered person may deduct the amount of tax paid or payable when importing or receiving goods or services related to his/her taxable transaction from the tax amount collected by him/her. Amended by Finance Act, 2075. (2) Notwithstanding anything written in subsection (1), in the case of prescribed goods that may be used for commercial or personal purposes, provision may be made for not allowing input tax credit or allowing it only partially.

(3) If the full portion of goods or services transacted in any month is not used in taxable transactions, input tax credit for tax previously paid on such goods or services shall be allowed only to the extent used in taxable transactions, as prescribed.

(4) If goods or services for which input tax credit is allowed under this section cease to be used in taxable transactions before the expiry of the prescribed useful life period, tax shall be assessed and collected as if such goods or services were immediately sold at market price, as prescribed.

(5) Notwithstanding anything written in subsection (1), the input tax credit available to a registered person dealing in used goods shall be as prescribed. Amended by Finance Act, 2075. (5A) Subject to subsection (2), a taxpayer may deduct tax paid on capital goods imported or purchased under a loan agreement under financial lease.
Value Added Tax Act, 1996

Amended by Finance Act, 2075. (5A) Subject to subsection (2), a taxpayer may deduct tax paid on capital goods imported or purchased under a loan agreement under financial lease. Added by Finance Act, 2075. (5B) Tax paid under subsection (2) Added by Finance Act, 2080. and (2A) of Section 8, Section 12A., and subsection (3) of Section 15 shall be allowed as input tax credit to the concerned taxpayer.

(6) Input tax credit under this Act shall be allowed only after the claim is substantiated by documents as prescribed.

(7) Provision regarding deduction of tax paid or payable on goods in stock at the time of registration, intended for use in taxable transactions, shall be as prescribed. Added by Finance Act, 2075. (8) Notwithstanding anything written elsewhere in this section, a taxpayer who fails to submit tax returns for a continuous period of six months may be publicly named, and if there is a balance amount of input tax credit to be allowed, such credit may be frozen and his/her registration may also be suspended. 18. Submission of Tax Return: (1) A taxpayer shall self-assess the tax amount payable by him/her for each month and submit a tax return to the Tax Officer Added by Finance Act, 2075. or by registered post or through electronic means as prescribed, within twenty-five days of the expiry of that month. Such return shall be submitted whether or not any taxable transactions were carried out in that month. Added by Finance Act, 2075. (1A) Notwithstanding anything written in subsection (1), a taxpayer from a district where there is no Inland Revenue Office or Taxpayer Service Office may submit the tax amount payable and the tax return to the concerned District Treasury and Accounts Controller Office within the fifteenth day of the month following the month for which the return is due. The Treasury and Accounts Controller Office shall forward the tax return and tax payment details received in this manner to the concerned Inland Revenue Office or Taxpayer Service Office within seven days. Amended by Finance Act, 2079. (1B) The procedure for submitting and forwarding returns under Section 10B1., subsection (1) and subsection (1A) shall be as determined by the Department.

(2) Notwithstanding anything written in subsection (1), a taxpayer may submit a tax return for a period of less or more than one month as prescribed. Added by Finance Act, 2081. (3) If a taxpayer required to submit a tax return under this section fails to do so within four months after the expiry of the due date for submission, the Tax Officer may detain the import or export of such taxpayer. 19.
Value Added Tax Act, 1996

Added by Finance Act, 2081. (3) If a taxpayer required to submit a tax return under this section fails to do so within four months after the expiry of the due date for submission, the Tax Officer may detain the import or export of such taxpayer. 19. Payment of Tax: (1) A taxpayer shall pay the tax for each tax period within twenty-five days from the date of expiry of that period. Amended by First Amendment. Added by Finance Act, 2075. (2) If a taxpayer fails to pay the tax payable within the time limit mentioned in subsection (1), an additional charge at the rate of ten percent per annum shall be levied on the outstanding tax amount.

(3) Deleted by Finance Act, 2075.

(4) If a taxpayer submits an application for waiver of the additional charge Amended by Finance Act, 2075. leviable under subsection (2) showing that he/she could not pay the tax amount within the time limit due to circumstances beyond his/her control, and if the reason appears reasonable, the Director General may waive such charge. Amended by Finance Act, 2080.

(5) Amended by Finance Act, 2075. While calculating the additional charge under subsection (2) Amended by Finance Act, 2080. and the interest under Section 26, the calculation shall be made from the date the time limit for paying the tax of the same tax period Amended by Finance Act, 2075. from which the liability to pay the tax amount originated expires. Added by First Amendment. (6) If, while assessing the tax of a taxpayer under Section 20, it is found that the tax refundable to him/her exceeds the tax recoverable from him/her for that tax period, no additional charge and interest shall be collected while assessing his/her tax for that tax period. Amended by Finance Act, 2075. (7) Payment of tax within the time limit mentioned in subsection (1) may also be made through electronic means or by a bank guaranteed cheque (good for payment cheque). If payment is made through electronic means, the date of payment order shall be deemed the date of payment, and if payment is made by a bank guaranteed cheque (good for payment cheque), the date of receipt by the office shall be deemed the date of payment. Added by Finance Act, 2076. (7A) Notwithstanding anything written in subsection (7), when paying tax exceeding ten lakh rupees, payment shall be made by cheque, draft, or electronic means. Added by Finance Act, 2079. (7B) Notwithstanding anything written in this section, the tax payment procedure for a person registered under Section 10B1. shall be as determined by the Department. Added by Finance Act, 2080.
Value Added Tax Act, 1996

Added by Finance Act, 2079. (7B) Notwithstanding anything written in this section, the tax payment procedure for a person registered under Section 10B1. shall be as determined by the Department. Added by Finance Act, 2080. Added by First Amendment. (8) Interest shall not be collected on interest, additional charge, and penalty. 20. Tax Officer May Assess Tax: (1) The Tax Officer may assess tax in any of the following circumstances:-

(a) If a tax return is not submitted within the time limit,

(b) If an incomplete or incorrect tax return is submitted,

(c) If a false tax return is submitted,

(d) If the Tax Officer has reason to believe that the tax amount has been understated or is incorrect,

(e) (Added by First Amendment) If the Tax Officer has reason to believe that there has been under-invoicing of the supply value,

(f) If supply is made to a group company by under-invoicing,

(g) If a person liable to register transacts without registering,

(h) If sales are made without issuing an invoice,

(i) If an unregistered person collects tax,

(j) If tax is not deposited under subsection (2), (2A) or (3) of Section 8, Amended by Finance Act, 2081.

(k) If the condition under subsection (4) of Section 17 exists.

(2) While assessing tax under subsection (1), the assessment may be made on any or all of the following bases:-

(a) Evidence of transactions,

(b) Tax audit report submitted by the concerned Tax Officer regarding the transactions,

(c) Tax submitted by other persons engaged in similar types of transactions.

(3) Notwithstanding anything written in subsection (2), while assessing tax as above, the burden of proof shall lie on the concerned Tax Officer. Amended by Finance Act, 2075. (4) While assessing tax under subsection (1), the assessment shall be completed within four years from the date of submission of the tax return. If the assessment cannot be made within that period, the return submitted shall be deemed automatically accepted.

(4A) Notwithstanding anything written in subsection (4), if any person has evaded tax by preparing false accounts, invoices, or other documents, or by fraud, the Department may at any time order a reassessment

Added by the Finance Act, 2075.23gh.
Value Added Tax Act, 1996

Power to detain, seize, or require deposit: (1) Where any person, firm, company or organization has engaged in tax evasion transactions and, if immediate action is not taken, there is a likelihood that the accused may abscond or evidence of the offense may disappear, the Tax Officer may, with the approval of the Director General, perform or cause to perform the following acts:-

(a) to seal the business premises,

(b) to seize electronic equipment and its records,

(c) to prepare a slip and demand cash deposit or bail guarantee for an amount equal to the evaded tax from the person believed to have committed the offense,

(d) to freeze the bank account held in the name of the taxpayer for up to three months,

Provided that, where the tax assessment process has not been completed, the bank account may be frozen for an additional three months with the approval of the Director General.

(e) if cash deposit is not made or bail guarantee is not provided pursuant to clause (c), to detain for a maximum of forty-five days, not exceeding fifteen days at one time.

(2) The Tax Officer shall have the same powers as a police officer under the law in relation to the investigation and inquiry of offenses under this Act. 24. Where deductible amount exceeds: (1) If, in any month, the amount of tax deductible under Section 17 by a registered person exceeds the amount of tax collected in that month, such excess amount may be adjusted against any amount payable up to that month under this Act.

(2) The amount remaining after adjustment under sub-section (1) may be adjusted by the registered person against the tax payable in the following month.

(3) The registered person may submit an application to the concerned Tax Officer as prescribed to obtain a refund of the amount remaining after adjustment in accordance with this section for a continuous period of Amended by the Finance Act, 2076.4 months. Amended by the Finance Act, 2075.(4) Notwithstanding anything contained in sub-section (2) or (3), if a registered person who sells more than forty percent of the total monthly sales through Amended by the Finance Act, 2081.exports submits an application for a refund of the amount deductible as tax under Section 17, following the procedure specified in this section, such amount shall be adjusted against any outstanding amount payable, and the remaining amount may be applied for refund in a lump sum.
Value Added Tax Act, 1996

Amended by the Finance Act, 2075.(5) If any application is made under sub-section (3) or (4), the Tax Officer shall refund the amount determined to be refundable, and if the refund is not made within sixty days from the date of application under sub-section (3) or within thirty days under sub-section (4), the Government of Nepal shall also pay interest on such amount as prescribed.

(6) Once a registered person has claimed a refund of the amount remaining after adjustment under sub-sections (3) and (4), such amount shall not be adjusted against the tax collected in the following month. 25. Tax may be refunded: (1) A refund of the tax amount as follows shall be made if an application is received within three years from the date of the related transaction:-

Amended by the Finance Act, 2075.(a) Tax paid in Nepal by a diplomat of a state, regional or international mission or organization accredited to Nepal, to the extent of their consumption, where the foreign state, regional or international mission or organization, as recognized by the Ministry of Foreign Affairs of the Government of Nepal, provides tax exemption facilities to Nepali diplomats on a reciprocal basis;

Added by the Finance Act, 2076.(a1) Tax paid by a diplomatic mission enjoying diplomatic facilities, upon the recommendation of the Ministry of Foreign Affairs of the Government of Nepal, on the purchase of taxable goods or services in Nepal;

Added by the Finance Act, 2077.(a2) Tax paid by the United Nations, its member organizations and specialized agencies, in the course of carrying out their objectives, on the purchase of taxable goods or services in Nepal;

(b) Tax paid by an international organization or such organization for which tax exemption facilities have been granted by the Ministry of Finance of the Government of Nepal;

(c) Tax paid in the course of operating a project in Nepal Omitted by the Republic Strengthening and Some Nepal Laws Amendment Act, 2066 pursuant to bilateral or multilateral agreements for which tax exemption consent has been obtained from the Ministry of Finance of the Government of Nepal;

(d) Tax collected erroneously. Added by the Finance Act, 2075.(1a) Notwithstanding anything contained in sub-section (1), tax paid by a diplomatic mission or diplomat on the purchase of taxable goods or services shall not be refunded for a single purchase of less than Amended by the Finance Act, 2076.ten thousand rupees.
Value Added Tax Act, 1996

Added by the Finance Act, 2075.(1a) Notwithstanding anything contained in sub-section (1), tax paid by a diplomatic mission or diplomat on the purchase of taxable goods or services shall not be refunded for a single purchase of less than Amended by the Finance Act, 2076.ten thousand rupees. Added by the Finance Act, 2076.(1b) If any Amended by the Finance Act, 2080.consumer makes payment for the purchase of goods and services determined by the Department through publication of a notice, using electronic means in accordance with prevailing law, ten percent of the tax paid on such purchase shall be refunded to the consumer's bank account as a cash incentive, following the procedure prescribed by the Department.

(2) When refunding tax under clause (d) of sub-section (1), the refund shall be made only to the person bearing the actual burden of the tax. Added by the Finance Act, 2075.25a. Refund of tax paid on purchases by foreign tourists: If a foreign tourist visiting Nepal and departing by air purchases taxable goods worth more than twenty-five thousand rupees and takes them with them, the tax paid on such goods shall be refunded according to the procedure prescribed by the Department. Three percent of such refundable amount shall be deducted as service charge. 25b. Refund of tax at the customs point upon re-export: If any goods are re-exported, the amount of the deposit paid as value added tax at the customs office, based on the proof of re-export of such goods, shall be refunded to the concerned person by the concerned customs office. 25c. Refund of tax upon re-export: If any goods are re-exported and payment is received in advance in convertible currency, the amount paid as value added tax by the concerned person on the purchase shall be refunded to them. Added by the Finance Act, 2075.25gha1.
Value Added Tax Act, 1996

25c. Refund of tax upon re-export: If any goods are re-exported and payment is received in advance in convertible currency, the amount paid as value added tax by the concerned person on the purchase shall be refunded to them. Added by the Finance Act, 2075.25gha1. Refund of tax overpaid under contract or agreement: (1) Where a public entity under prevailing public procurement law or an organization wholly or partly owned by the Government of Nepal pays the amount for goods or services supplied under a contract or agreement, the tax deposited in the name of the concerned contractor or supplier may be adjusted against the tax payable by such contractor or supplier.

(2) If, after adjustment for a continuous period of four months under sub-section (1), such excess deposited amount cannot be adjusted and the concerned contractor or supplier wishes to obtain a refund, they shall submit an application to the Tax Officer.

(3) If an application is made by any person under sub-section (2), the Tax Officer shall refund the amount determined to be refundable within sixty days from the date of application.

(4) Once the concerned contractor or supplier has claimed a refund of the amount remaining after adjustment under sub-section (2), such amount shall not be adjusted against the tax collected in the following month. Added by the Finance Act, 2075.25ga2. Refund of tax paid on purchases by pharmaceutical industry: (1) If a pharmaceutical industry purchases raw materials, auxiliary raw materials, and packaging materials required for the production of medicines from domestic industries, they may submit an application to the Tax Officer for a quarterly refund of the tax paid on such purchases.

(2) If an application is made by any person under sub-section (1), the Tax Officer shall refund the amount determined to be refundable within sixty days from the date of application. 25gh. Tax not refundable: Notwithstanding anything contained elsewhere in this Act, any amount required to be refunded under this Act shall not be refunded if no application for refund is made within three years from the date of expiry of the tax period. 26. Interest: (1) If any amount payable under this Act is not deposited within the due date, interest shall be charged on the outstanding amount from the date of default. Such interest shall also be calculated in cases where an application for administrative review under Section 31a or for appeal under Section 32 is filed.

(2) For the purpose of sub-section (1), the rate of interest shall be fifteen percent per annum. 27. Treated as tax: Fees, interest, and penalties leviable under this Act shall be treated as tax leviable under this Act. 28.
Value Added Tax Act, 1996

27. Treated as tax: Fees, interest, and penalties leviable under this Act shall be treated as tax leviable under this Act. 28. Provisions relating to import: (1) Except as otherwise specified by the Ministry of Finance of the Government of Nepal, the Customs Officer shall collect the tax under this Act on imported goods. Amended by the Finance Act, 2081.(1a) If goods produced or manufactured in Nepal, after completion of Amended by the Finance Act, 2081.export procedures from the customs office or after reaching abroad, are re-imported due to refusal by the concerned party or other reasons, and if such goods are Amended by the Finance Act, 2081.to be exported again within three months of such importation, the value added tax applicable at the time of such return may be released upon keeping a deposit, and such deposit shall be refunded after the goods are Amended by the Finance Act, 2081.re-exported. The concerned customs office shall provide details of the amount so deposited and refunded to Omitted by the Finance Act, 2080. the Department.

(2) For the purpose of collecting and recovering tax on imported goods, the Customs Officer may exercise the powers under this Act and the prevailing Customs Act. 29.
Value Added Tax Act, 1996

Added by the Finance Act, 2077.(1d) If a person liable for registration transacts without registering, the Tax Officer may impose a penalty amounting to fifty percent of the tax evaded on such person. Added by the Finance Act, 2080.(1e) If a person is found to have obtained a refund automatically through electronic means under clauses (a), (a1), and (a2) of sub-section (1) of Section 25 without being entitled to such refund, the Tax Officer may impose a penalty of twenty-five percent of the tax evaded. Amended by the Finance Act, 2075.(2) If any person commits any of the following offenses, the Tax Officer may impose a penalty of one hundred percent of the tax evaded or imprisonment for up to six months or both on such person:-

(a) Preparing false accounts, invoices, or other documents;

(b) Evading tax through fraud;

(c) An unregistered person acting as a registered person;

(d) Selling by under-invoicing;

(e) Conducting transactions in violation of Section 30.

(3) An abettor who knowingly or negligently helps, assists, incites, or advises a person committing any offense under this Act shall be liable to a penalty of fifty percent of the tax underpaid by such person. 29a. Department may order to deposit penalty amount: (1) Notwithstanding anything contained elsewhere in this Act, if a person voluntarily admits in writing, before the initiation of proceedings, to having committed one or more offenses under sub-section (2) of Section 29, the Department may order such person to deposit a penalty amount not exceeding the penalty leviable for such offense.

(2) When issuing an order under sub-section (1), the Department shall specify in such order the details of the offense, the amount of penalty to be paid, and the date by which the penalty amount must be paid.

(3) An order issued by the Department under this section shall be final. Added by the Finance Act, 2075.29b.
Value Added Tax Act, 1996

Added by the Finance Act, 2075.29b. Concerned officer to be liable: (1) If any entity fails to comply with any matter required to be complied with under this Act, every employee serving as an officer of such entity at that time shall be liable for such act.

(2) If any entity does not pay tax by the date on which the tax must be paid, every officer currently serving or who served up to six months prior in such entity shall be deemed liable, jointly or severally, for the payment of such tax.

(3) Notwithstanding anything contained in sub-sections (1) and (2), those sub-sections shall not apply in the following circumstances:-

(a) Where the entity committed such offense without the knowledge or consent of that person; and

(b) Where such person had taken or used such care, diligence, and skill as would normally be adopted by a person exercising ordinary human prudence to prevent such offense.

(4) If any person pays tax under sub-section (2), such person may do the following:-

(a) Recover the amount so deposited from that entity;

(b) For the purpose of clause (a), take possession of the property of that entity in or coming into their custody, to the extent not exceeding the amount so deposited.

(5) If any person takes possession of any property under clause (b) of sub-section (4), no claim shall be made against such person by that entity or any other person. Explanation: For the purpose of this section, "concerned officer" shall be understood to mean the manager of such entity or a person acting in that capacity. 30. Suspension of business: If a registered person commits any offense mentioned in Section 29 two or more times, the Director General may, for each such offense, order the Tax Officer to suspend the business premises of such person from carrying out transactions for up to a maximum of seven days. Amended by the Finance Act, 2075.30a. Power to order re-assessment: (1) If, from information received by the Director General, it appears that before the completion of a tax assessment, any proceeding related to such assessment is or has become irregular, the Director General may, after recording reasons in writing, order the concerned Tax Officer or any other Tax Officer to reassess the tax.

(2) If it appears that a Tax Officer has assessed tax negligently or mala fide, resulting in a reduction of tax liability, the Director General may order the amendment of such assessment order within four years from the date of the original assessment. 31.
Value Added Tax Act, 1996

31. Powers equivalent to a court: For the purposes of this Act, the Tax Officer shall have the same powers as a court concerning summoning the concerned person, taking statements, examining evidence, and requiring the production of documents. Amended by the Finance Act, 2075.31a. Application for administrative review: (1) Any person aggrieved by a tax assessment decision made by a Tax Officer may file an application with the Director General against such decision within thirty days from the date of receipt of notice of such decision.

(2) If the time limit for filing an application under sub-section (1) has expired, an application may be filed with the Director General for extension of time within seven days from the date of expiry, stating the reason for the expiry, and if the reason mentioned in such application appears reasonable, the Director General may extend the time limit by up to thirty days from the date of expiry.

(3) If, upon investigation of an application filed by a taxpayer under sub-section (1), the taxpayer's claim appears to be true, the Director General may, after recording reasons in writing, set aside such assessment order and order the concerned Tax Officer or any other Tax Officer to reassess the tax.

(4) The Director General shall render a decision on an application filed under sub-section (1) within sixty days from the date of such application.

(5) If the Director General fails to render a decision within the time limit under sub-section (4), the concerned person may file an appeal to the Revenue Tribunal under Section 32.

(6) A taxpayer filing an application under sub-section (1) shall pay the undisputed tax amount out of the assessed tax and deposit Amended by the Finance Act, 2077.one-fourth of the disputed tax amount.

(7) Amended by the Finance Act, 2076.If the deposit required under sub-section (6) has already been deposited in excess before filing the application, only the remaining amount after deducting the amount covered by such excess deposit shall be deposited.

(8) The amount deposited under this section shall not be refunded until the final settlement of the case. Amended by the Finance Act, 2075.32. Appeal to Revenue Tribunal: (1) Any person aggrieved by an order of suspension made by the Director General under Section 30 or a decision made by the Director General under sub-section (4) of Section 31a may file an appeal to the Revenue Tribunal.

(2) A person filing an appeal under sub-section (1) shall, within fifteen days from the date of filing the appeal, provide written notice to the Department attaching a copy of the appeal petition. Added by the Finance Act, 2075.32a.
Value Added Tax Act, 1996

Added by the Finance Act, 2075.32a. Advance ruling: (1) If any person submits a written application to the Department for the resolution of any doubt regarding the application of this Act, the Department may, after notifying such person in writing, issue its view by an advance ruling as prescribed.

(2) Notwithstanding anything contained in sub-section (1), the Department shall not issue an advance ruling under sub-section (1) on a matter concerning a doubt arising in the implementation of this Act if such matter is sub judice in a court or has already been decided by a court. Added by the Finance Act, 2075.32b. Public circular: (1) To bring uniformity in the implementation of this Act, simplify tax administration, and provide guidance to officers of the Department or subordinate offices, as well as persons affected by this Act, the Department may issue written public circulars including interpretations of the provisions contained in this Act.

(2) Circulars issued under sub-section (1) may be published on the Department's own website or through Amended by the Finance Act, 2078.national level newspapers or other electronic means for public information.

(3) Unless a circular issued under sub-section (1) is revoked, the Department shall be bound to act in accordance with such circular. Amended by the Finance Act, 2078.33. Deposit required: (1) When filing an appeal to the Revenue Tribunal under this Act, the undisputed tax amount out of the assessed tax must be paid, and fifty percent of the disputed tax amount and penalty must be deposited or a bank guarantee for such amount must be provided.

(2) When calculating the deposit or bank guarantee amount under sub-section (1), Omitted by the Finance Act, 2079 the twenty-five percent tax amount deposited for administrative review in the Department shall also be calculated. Added by the Finance Act, 2079.(3) A bank voucher deposited in the deposit account at the Office of the Comptroller and Auditor General in the name of the concerned office, or a bank guarantee equal to such amount, under sub-section (1), must be submitted along with the appeal petition. 34. Delegation of powers: (1) Except for the power to assess tax and impose penalties, the Tax Officer may delegate any or all of the powers conferred on them under this Act to subordinates.

(2) The powers specifically designated to be exercised by the Director General under this Act shall not be delegated. Added by the Finance Act, 2075.34a. May engage expert services: The Government of Nepal or the Department may engage the services of relevant experts for tax audit, investigation, or management related work, and the provisions regarding official secrecy mentioned in Section 37 shall apply to such experts. 35.
Value Added Tax Act, 1996

Added by the Finance Act, 2075.34a. May engage expert services: The Government of Nepal or the Department may engage the services of relevant experts for tax audit, investigation, or management related work, and the provisions regarding official secrecy mentioned in Section 37 shall apply to such experts. 35. Identity card of Tax Officer: Every Tax Officer shall carry an identity card as prescribed and shall Amended by the First Amendment.show the identity card to the concerned person in the course of performing their duties. 36. Service of notice: A notice, order, or document issued by the Director General or any Tax Officer shall be deemed to have been served after the procedure prescribed is completed. 37. Secrecy: Documents or other information relating to tax obtained from any person shall not be disclosed or published in any circumstances except the following:-

(a) To inform revenue collection authorities for the purpose of protecting the revenue of the Government of Nepal;

(b) To present as evidence in a court pursuant to revenue-related law for the purpose of proving a taxpayer's liability;

(c) To keep as part of public records in the course of proceedings of the Revenue Tribunal or any court. 38. Punishment to Tax Officer: If the Director General determines that any tax assessment has been made mala fide or negligently, resulting in an increase or decrease in tax liability, the Director General shall initiate departmental proceedings against the Tax Officer making such assessment in accordance with the law relating to their terms of service. Provided that, while initiating such proceedings, the Tax Officer shall be given a reasonable opportunity to present their defense. 39. Not liable for acts done in good faith: Notwithstanding anything contained elsewhere in this Act, no Tax Officer shall be personally liable for any act done in good faith in the performance of their duties. Amended by the Finance Act, 2075.40.
Value Added Tax Act, 1996

39. Not liable for acts done in good faith: Notwithstanding anything contained elsewhere in this Act, no Tax Officer shall be personally liable for any act done in good faith in the performance of their duties. Amended by the Finance Act, 2075.40. Reward and informer fee: (1) A person providing information with evidence that a taxpayer has evaded or attempted to evade all or part of their tax liability may be awarded, by decision of the Director General, an amount equal to twenty percent of the tax amount determined on the basis of the evidence provided by them out of the tax recovered on the basis of such information.

(2) If there is more than one person entitled to the reward, the reward amount shall be distributed proportionately.

(3) Notwithstanding anything contained in sub-section (1), a person providing information on revenue leakage may be given an immediate informer fee of up to ten thousand rupees, based on the veracity of the information, in accordance with the procedure determined by the Department.

(4) The name, surname, and address of the person providing information under sub-sections (1) and (3) shall be kept confidential. 41. Power to make rules: The Government of Nepal may make necessary rules to implement the objectives of this Act. 42. Amendment to Schedule: The Government of Nepal may, by publishing a notice in the Nepal Gazette, make necessary additions, deletions, or changes to the Schedule. 43. Other matters to be governed by prevailing law: Matters written in this Act and the rules made under this Act shall be governed accordingly, and other matters shall be governed by prevailing law. 44. Repeal and savings: (1) The following Acts are hereby repealed:-

(a) Sales Tax Act, 2023.

(b) Hotel Tax Act, 2018.

(c) Contract Tax Act, 2023.

(d) Entertainment Tax Act, 2017.

(2) All acts and proceedings done under the Acts repealed under sub-section (1) shall be deemed to have been done under this Act. Schedule-1

(Relating to sub-section (3) of Section 5)

Goods and Services Exempted from Tax



 06.01 Group 1: Basic Agricultural ProductsBulbs, tubers, tuberous roots, corms, crowns, and rhizomes, dormant, in growth or in flower; chicory plants and roots other than roots of heading 12.12. 0601.10.00 -Dormant bulbs, tubers, tuberous roots, corms, crowns and rhizomes
 0601.20.00 -Bulbs, tubers, tuberous roots, corms, crowns and rhizomes, in growth or in flower; chicory plants and roots
 06.02 Other live plants (including their roots), cuttings, mushroom spawn. 0602.10.00 -Unrooted cuttings and slips
 0602.20.00 -Trees, shrubs and bushes, grafted or not, of kinds which bear edible fruit or nuts
 0602.30.00 -Rhododendrons and azaleas, grafted or not
 0602.40.00 -Roses, grafted or not
 0602.90.00 -Other
 07.01 Potatoes, fresh or chilled.
Value Added Tax Act, 1996

0714.10.00 -Manioc (cassava)
 0714.20.00 -Sweet potatoes
 0714.30.00 -Yams (Dioscorea spp.)
 0714.40.00 -Taro (Colocasia spp.)
 0714.50.00 -Yautia (Xanthosoma spp.)
 0714.90.00 -Other (omitted in customs tariff)

 23.06 Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable or microbial fats or oils, other than those of heading 23.04 or 23.05.

 -Of oil seeds (rape or colza seeds):
 2306.41.00 --Of low erucic acid rape or colza seeds
 2306.90.00 -Other
 23.09 2309.90.00 Preparations of a kind used in animal feeding.
 -Other
 43.01 Raw or processed, but not cut, flax (linen or similar bast); flax tow and waste (including yarn waste and garnetted stock). 4301.10.00 -Flax, raw or retted
 -Flax, broken, scutched, hackled or otherwise processed, but not cut:
 4301.21.00 --Broken or scutched
 4301.29.00 --Other
 4301.30.00 -Flax tow and waste
 43.03 Raw or processed, but not cut, jute and other bast fibres (excluding flax, true hemp and ramie); tow and waste of these fibres (including yarn waste and garnetted stock). 4303.10.00 -Raw or retted jute and other bast fibres

Notes:-
1. Unprocessed tobacco sold by farmers. 2. Goods falling under the aforementioned customs headings 06.01 to 08.10 shall not be exempt from value added tax on supplies made by hotels, restaurants, bars, guest houses, cafeterias or similar establishments. Group 2: Goods of Basic Necessity

 25.01 Salt (including table salt and denatured salt) and pure sodium chloride, whether or not in aqueous solution or containing added anti-caking or free-flowing agents; sea water. 2501.00.10 Salt
 27.16 2716.00.00 Electrical energy. Notes:-
1. Drinking water supplied in bulk from taps and tankers. Group 3: Livestock and Animal Products

 01.02 Live bovine animals.
 -Cattle:
 0102.21.00 --Pure-bred breeding animals
 0102.29.00 --Other
 -Buffaloes:
 0102.31.00 --Pure-bred breeding animals
 0102.39.00 --Other
 0102.90.00 -Other
 01.03 Live swine. 0103.10.00 -Pure-bred breeding animals
 -Other:
 0103.91.00 --Weighing less than 50 kg
 0103.92.00 --Weighing 50 kg or more
 01.04 Live sheep and goats. 0104.10.00 -Sheep
 0104.20.00 -Goats

 01.05 Live poultry, that is, fowls of the species Gallus domesticus, ducks, turkeys and guinea fowls.

 -Weighing not more than 184 g:
 0105.11.00 --Fowls of the species Gallus domesticus
 0105.12.00 --Turkeys
 0105.13.00 --Ducks
 0105.14.00 --Geese
 0105.15.00 --Guinea fowls
 -Other:
 0105.94.00 --Fowls of the species Gallus domesticus
 0105.99.00 --Other
 01.06 Other live animals.
 -Mammals:
 0106.14.00 --Rabbits
 0106.19.00 --Other
 -Birds:
 0106.33.00 --Ostriches; emus (Dromaius novaehollandiae)
 -Insects:
 0106.41.00 --Bees
 0106.90.00 -Other
 02.01 Fresh or chilled meat of bovine animals. 0201.10.00 -Carcasses and half-carcasses
 0201.20.00 -Other cuts with bone in
 0201.30.00 -Boneless
 02.03 Meat of swine, fresh, chilled or frozen.
 -Fresh or chilled:
 0203.11.00 --Carcasses and half-carcasses

 0203.12.00 --Hams, shoulders and cuts thereof, with bone in

 0203.19.00 --Other
 02.04 Fresh, chilled or frozen meat of sheep or goats.