UP NEPAL bUDGET

NEPAL BUDGET
2078-79 (2021-22)
HIGHLIGHTS FROM TAX PERSPECTIVE
www.nbsm.com.np
TABLE OF CONTENTS
03-05 BUDGET OBJECTIVES
06-07 BUDGET SUMMARY
08-09 TAXATION GENERAL
10-13 TAX AMNESTY SCHEME
14-35 INCOME TAX
36-43 VALUE ADDED TAX
44-58 EXCISE DUTY
59-68 CUSTOMS DUTY

GOVERNMENT'S LONG TERM OBJECTIVE
PROSPEROUS NEPAL, HAPPY NEPALESE

;Da[4 g]kfn, ;'vL g]kfnL
OBJECTIVES OF BUDGET
1
Protecting the Life of Citizens from the COVID –
19 Pandemic
Optimum utilization of resources, opportunity

2 and capacity for the rapid Economic
development and upliftment.
Strengthen the Public Welfare Role of

3 Government, providing Social Security and
achieving the prosperity with Social Justice.
Development of Production oriented Economy by

4
mobilizing the resources and means of Public,
Private and Cooperative Sector.
PRIORITIES OF BUDGET 2078/79
1 3 5 7 9
Extension of testing, Assurance of job Agricultural Construction of Ending all types

provision for treatment,
and employment Production and infrastructure of discrimination
supply of health equipment Productivity having strategic and inequality,
and materials, assurance to the entrants in
of free vaccination, labor market and enhancement and importance which equitable
development of health laborer’s who lost Assurance of Food helps in rapid development and
infrastructure and effective the Jobs Security industrialization justified access on
mobilization of health and provides the returns of
workers to prevent, control
earlier returns development
and cure of COVID-19
2 4 6 8 10
Uplifting the Social security Investment in Balanced Provision of
economic activities and protection Infrastructure or development responsible
through relief based on life the Skillful and through governance,
packages to cycle to all Practical coordination assurance of
affected families Nepalese Citizens Education and peace and
from COVID-19 cooperation security,
and providing between corruption
incentive, subsidies Federal, control,
and reviving Provincial and effectiveness
packages to Local level on
private sectors structure governance
and services
SUMMARY OF BUDGET Allocation of Budget Source of Revenue
# Amount in Billions
Current Expenditure 678.62 41.2% Tax Revenue 1024.90
Capital Expenditure 374.26 22.7% Foreign Grant 63.37
Financial Management 207.97 12.6% Foreign Debt 309.29

Transfer to Province & Local 386.72 23.5% Internal Debt 250.00
Level
Total Budget Allocated 1647.57
Current Expenditure 250.00

386.72 Tax Revenue
CapitalExpenditure 678.62 Foreign Grant

309.29
Financial Management 207.97 Foreign Debt
1024.90
63.37 Internal Debt
Transfer t o Province and 374.26
Local Level
Total Budget (in Billions NPR) Economic Growth & Inflation

1,647.57
1,532.97
1,474.64
6.50%
1,278.99 1,315.16 8.00%
7.40% 7.50% 7.00%
6.50% 6.90% 6.50% 6.50%
6.00%
1,048.92
4.00% 4.50% 4.01%
3.80% 3.50%
819.46 3.04%
2.00%
0.00%
2072-73 2073-74 2074-75 2075-76 2076-77 2077-78 2078-79
-2.00% -2.12%
-4.00%
Growth Rate Inflation Rate *2077-78 Estimate **2078-79 Projection
2072-73 2073-74 2074-75 2075-76 2076-77 2077-78 2078-79

Per capita Income: US $1,191. It was $1,126 for 2067/77
BUDGET SUMMARY Major Highlights of Budget 2078/79
• Budget has prioritized Education Sector in a big way. • NPR 10.03 billions has been allocated for Railways.
Highest Amount of Budget NPR 180.04 billion has been
allocated to Education Sector. • The government will contribute the amount to be paid by
organizations and workers to the Social Security Fund for the
• Health Sector has received the highest so far amount of months of mid- May to mid-June (Jestha) and mid- June to mid-
Budget. NPR 122.77 billion has been allocated for July (Ashad).
Health Sector.
• To encourage entrepreneurship, the government has announced
• Allocated the budget of NPR 12.46 Billion for health a 100 per cent rebate on income tax for start-ups for up to five
infrastructure development and NPR 14.27 Billion to build years from the date of commencement of operation, a one-stop
new hospitals. Ministry of Health & Population budget system to facilitate the establishment and operation of such
increased to NPR 90.69 Billion. start-ups, among other provisions. NPR 2.5 million loan without
collateral to start ups with only 1 percent interest rate. NPR 2.5
• Government has increased social security allowance by million loan keeping Certificate as the collateral.
33 per cent and raised the monthly old-age allowance
for senior citizens by Rs 1,000 to Rs 4,000. • Government to initiate Made in Nepal and Make in Nepal
Program/Movement.
• The government has announced 100 per cent waiver for
consumers consuming only 20 units of electricity per month • To encourage the use of electric vehicles, the government has
during the lockdown/prohibitory period and 100 per decided to waive the renewal fee and road tax on EVs for the
cent waiver on the drinking water bill for consumers next five years, while also setting the target to replace light
consuming only 20,000 liters per month during the same vehicles running on fossil fuel by EVs by 2088.. Excise Duty
period. removed on purchase of EVs and Customs reduced.
• License and renewal fee waiver for sectors such as films, • Government Employee's Salary increased by NPR 2,000, 10
handicraft, aviation, media, advertising, health clubs, days paid holidays given to Govt. Employees.
among others.
NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 7

TAXES - GENERAL Health Risk Tax Education Service Fees
25 Paisa per While
Bidi
Stick
exchanging
Cigarette & 50 Paisa per
2%
foreign currency
Cigar Stick
by the students
Khaini, Surti, going abroad
40 Rupee Per
Pan Masala, for studies.
KG
Gutkha
*Same as Previous Year
Infrastructure Development Tax
Import of Petrol
and Diesel at
NPR 10
customs point Per Liter
Casino Royalty
To General Casino 40 Million Per annum

To Casino using Modern Machine Equipment 10 Million Per annum
50% of the Additional fee and annual additional fee of the FY

2076/77 shall be waived to a person or organization licensed to
operate a casino, if it pays the remaining 100% royalty and 50%
additional fee as well as annual additional fee for the FY 2076/77
and 100% royalty, additional fee and annual additional fee for
the year 2076/77 within the end of Chatira, 2078.
TAXATION - GENERAL Major Highlights of Budget 2078/79
• Road Maintenance and Improvement Fee shall be • Telephone Ownership Fee of NPR 500 will be charged
levied at the customs point for road maintenance and from every customer for every telephone connection. In case
improvement at the rate of NPR 4 per Litre for Petrol of change of ownership of telephone, the same fee will be
and NPR 2 per Litre for diesel imported respectively. charged from the person claiming ownership of telephone.
However, in the case of mobile telephones, Telephone
• Pollution Control Fee will be levied at the rate of NPR Ownership Fee will be charged at the rate of 2% of each
1.50 per Liter for the purchase and distribution of petrol SIM card and recharge fee.
and diesel in Nepal.
• The government has abolished the 15% Forest Production
• Cinema Development Fee shall be charged to cinema Fee levied on sale of Sal and Khayar Timber to person
houses and halls as follows: other than to Timber Consumer Groups from the date of
budget. In order to protect the Domestic Furniture Industry,
• 15% on entry fee for all categories of foreign excise duty has been imposed on the import of all types of
films furniture.
• 20% on entry fee for all categories of foreign
films shown from cabins.
• The cinema house and halls have to issue tickets

through electronic system (e-ticket system) and
connect with the Central Cinema Management
System by the end of Poush, 2077.
• Telecommunication Service Charge to be levied at 13%

which will be imposed by telecom industries on the
telecommunication charges made to the customer.

Special provision for Waiver of Dues
TAX AMNESTY SCHEME
1. Waiver of Dues under old tax laws.
Ø If any tax dues under Excise Act, 2015, Income Tax Act, 2031 and
taxes replaced by Value Added Tax Act, 2052 such as Hotel Tax,
Entertainment Tax, Contract Tax, Sales Tax which is unpaid till the
date
Ø and is discharged up to 75% of such tax or duty by Poush end,
2078.
Ø then balance 25% of such tax or duty, fees, penalty and interest
shall be waived off.
2. Waiver of Dues under Assessment or Re-assessment.

Ø Where any tax dues in relation to Assessment or Re-assessment
made upto Ashadh end, 2076 under the Income Tax Act, 2058,
Value Added Tax Act, 2052 and Excise Act, 2058 is remain unpaid
Ø and an application is filled for opting this amnesty/relief by the
Poush end, 2078 by fully discharging the100% applicable tax dues
and interest calculated up-to the date of such application
Ø then any fees, additional fee and penalty shall be waived off.
Ø However, cases relating to false and fake invoices are not allowed
for such amnesty/relief.
3. Waiver of Dues to Non-Profit Community Hospital or Health

Institutions and Passenger Transportation Service Providers
providing services through Electronic Network.
Ø Where any tax dues in relation to Assessment or Re-assessment
made up to Jestha 15, 2078 under the Income Tax Act, 2058, Value
Added Tax Act, 2052 is unpaid and such Assessment or Re-
assessment has not gone for appeal,
Ø and an application for waiver of such dues by the Poush end, 2078
Ø then all dues shall be waived off.
TAX AMNESTY SCHEME Major Highlights of Budget 2078/79
Withdrawal of Cases • Special relief in case of fees related Trekking and Tour Package
Ø Persons involved in the business of Travelling and Trekking Agency
• Withdrawal of cases pending under Administrative Review at who have treated the sales as exempt sales and have not collected
Inland Revenue Department or appeal under consideration at and deposited VAT amount or where IRD has assessed VAT payable
Revenue Tribunal or Courts on such sales or where appeal has been filed for review against the
assessment order at revenue tribunal or revenue department
Ø Where the assessment or re-assessment made upto Ashadh Ø and such person self declares the transactions upto Jestha 14, 2078
end, 2077 under the Income Tax Act, 2058, Value Added and deposit VAT on such transactions or as per assessment within
Tax Act, 2052 and Excise Act, 2058 is withdrawn Poush end, 2078 and withdraws the appeal if filed as mentioned
Ø and an application is filed for opting such amnesty/relief by above,
Mangsir end, 2078 by fully discharging the 100% applicable Ø then any interest, penalty and additional fee on such amount shall be
taxes, duties and 50% of interest calculated up-to the date of waived off.
such application,
Ø then any fees, additional fees, penalty and balance 50% • Special relief in case of Health Service Providers
interest shall be waived off. Ø Where the Health Service Provider Organizations have balance input
VAT after adjusting with output VAT,
Ø However, cases relating to false and fake invoices are not Ø and deposits the balance payable after debit adjustment of such
allowed for such amnesty/relief. Input VAT on account of the health service being VAT exempt within
Ashad end, 2079.
Other Relief Ø then any additional fee and interest on such payables shall be
waived.
• Special provision of relief in case of issuance of
certificate of origin • Special provision in case of Transportation of Goods Service
Ø Transportation of Goods Service Providers, who has received the
Ø Where the entity issuing certificate of origin for the
rental income from the natural persons not registered under PAN in
purpose of export the FY 2076/77,
Ø has issued such certificates up to Jestha 14, 2078 Ø withholds and pays the TDS as per proviso 8 of Section 88(1) of
Ø then VAT dues on such issued certificates or VAT payable Income Tax Act, 2058
as assessed by IRO along with interest, penalty and Ø then such expenses shall be deductible while computing taxable
additional fee shall be waived off. income of FY 2076-77, even when no invoice of such transaction is
available.

TAX AMNESTY SCHEME & BENEFITS TO TAX PAYERS Major Highlights of Budget 2078/79
• Special provision related to Renewal of Excise License • Special rebate on rate of taxes for FY 2077/78 to tax payer
Ø Where the license holder under Excise Act, 2058 who has affected by COVID-19
failed to renew its license for one or more financial year
under the prescribed period Annual Transaction
Ø and pays the due license fee of respective financial year for Tax Payer Tax Rebate
Volume (in Rs.)
the swift continuation of its business by the end of Sharwan Up to 20 Lakhs or Income
end, 2078 1. Person paying tax u/s 4(4) 90%
up to Rs 2 Lakhs
Ø then the penalty on late renewal on the license fee shall be 2. Person paying tax u/s More than 20 Lakhs, up
waived. 75%
4(4ka) to 50Lakhs
3. Any Person Up to 1 Crore 50%
Ø However, if the renewal of the excise license is not done within
4. Hotel, Trekking, Travels,
the above mentioned time frame then the registration will be
Cinema Industry, Party
automatically cancelled.
palace, Media House,
Transportation and Air Tax Rate Applicable 1%
• Special provision related to Renewal of GSM Mobile Service
Transport Service having
Ø Where Nepal Telecommunication Company Limited pays the
transaction More than 1
Second Renewal of GSM Mobile Service from FY 2070/71 to
Crore
FY 2075/76 in five installments starting from FY 2075-76,
Ø such payments made on installments shall be allowed to be
claimed as expenses while computing the total taxable income
in the year of payment i.e. on cash basis. • Further loss of FY 2076-77 and FY 2077-78 can be carried forward
for 3 additional years for the business mentioned in point 4 above
Ø Payment of Second Renewal of GSM Mobile Service from FY
2070/71 to FY 2075/76 in five installments starting from FY
2075-76, mentioned above, shall be included in the taxable • Donation Expenses allowed as deduction:
income of Nepal Telecommunication Authority. Ø Donation to Corona Infection Relief, Control and Treatment Fund in
FY 2077/78 established by Central, State or Local Government
of Nepal will be allowed for deduction for the computation of
total taxable income.

TAX AMNESTY SCHEME & BENEFITS TO TAX PAYERS Major Highlights of Budget 2078/79
• CSR Expenses used in Medical Sector allowed as deduction:

Ø CSR Expenses allocated for the construction of special Covid-
19 hospital as prescribed by Ministry of Health and
Population, Nepal Government and expenses incurred on
purchase of health equipment and materials related to
treatment of Covid-19 will be allowed as deduction in the FY
2077/78.
• Special provision related to transfer of contribution to the

Social Security Fund (SSF):
Ø If any participants or interested participants of the Social
Security Fund (SSF) under contribution based Social Security
Act, 2074 transfer their fund deposited under any approved
retirement fund to the SSF within Chaitra end, 2078
Ø then the TDS applicable on such transfer as per Section 88 of
the Income Tax Act, 2058 shall not be collected.
• Special Reliefs on renewal of Private firms and Companies:

Ø If the Private Firms established under Private Firm Registration
Act, 2014 or Company registered under Companies Act,
2063
Ø that have not submitted the annual returns and/or not
renewed its registration up to FY 2076-77
Ø submits up to date annual returns and fees & penalty of 10%
Ø then the remaining penalty shall be waived.

INCOME TAX General Tax Relief
CORONA 90% Tax Relief to the

Taxpayer falling u/s 4(4)
RELIEF 75% Tax Relief for the Tax
payer Falling u/s 4(4ka)
Presumptive Taxation
50% Tax exemption in income

tax to any Person having
transaction up to NPR 1 Crore
50% Tax exemption in income

tax to any Person having
transaction up to NPR 1 Crore
1% Income Tax Rate to Hotel,
Travel, Trekking, Film Business
(Production, Distribution &
Show), Media House,
Transportation or Airlines
having transaction more than
10 Million & Carry Forward
loss further 3 Years.
SLAB RATE NO CHANGE
GENERAL TAX
RATE - ENTITY 25%
Amendment in Some Definition & it’s Impact
Definition of Non-Business Chargeable Assets:
Non-Business Chargeable Assets means land, building, interest in

any entity, or securities other than the following Assets:
1
2. Private Building of a natural person in the following conditions:

Existing a) Continueous Ownership for 10 years or more; and
Provision: b) Resided therein for 10 years or more continuously or
intermittently by the person.
Clarification: For the purpose of this clause, ‘private building’

means house and the land occupied by the house or 1 Ropani
(5476 sq. ft) land whichever is lower.
2
Definition of Non-Business Chargeable Assets:
Non-Business Chargeable Assets means land, building, interest in any

4
entity, or securities other than the following Assets:
2. Private Building of a natural person in the following conditions:

New Provision: a) Continueous Ownership for 10 years or more; and
b) Resided therein for 10 years or more continuously or
3 intermittently by the person.
Clarification: For the purpose of this clause, ‘private building’ means

house and the land occupied by the house and extra land equivalent
to the land occupied by such house or 1 Ropani (5476 sq. ft) land
whichever is lower.
Some relief on taxpayer against paying the Capital Gain tax on the
Impact:
resident building along with the land attached thereto.
Amendment in Some Definition & it’s Impact
Definition of Service Fee

1
“Service Fee” means any fee paid to a
Existing person according to market value for
Provision: the services provided by him; the term
includes commissions, meeting
allowances, management fee or
technical service fee.
Definition of Service Fee

4
“Service Fee” means any fee paid to a
New Provision: person according to market value for
the services provided by him; the term
includes commissions, meeting
allowances, management fee or
3
technical service fee.
Service Fee & Commission Distinguished.

TDS on Service is 1.5% if VAT registered
Impact: otherwise 15%.
In Commission it is 15%.
RELIEFS
Relief of Tax Payers on Litigation in Revenue Tribunal:
A person who makes an appeal pursuant to sub-section (1) No Income Tax for Mutual Fund
of section 116, total amount of undisputed tax and 50
percent of disputed tax amount, fee and penalty, out of the Section 10 has been amended and made Exemption from
assessed tax amount to be paid as a deposit or bank Income tax of the Earning of the Mutual Fund Licensed
guarantee. from SEBON.
In calculating deposit or bank guarantee pursuant to

subsection (5) of section 116, twenty five percent tax amount
filed with the Inland Revenue Department for administrative
review shall also be included. Significant Tax Rebate on rate of taxes for FY 2077/78 to
tax
2 payer affected by COVID-19
Transfer of fund to Social Security Fund:
• Small Businesses
If any contributor transfer his contribution from approved • Any Business having turnover upto 10 Million NPR
retirement fund to social security fund established under • Travel
4 Contribution Based Social Security Fund Act, 2074 within • Party Palace
Chaitra End, 2078 then no TDS shall be applicable under • Media House
section 88 on such amount. (Section 32 of Finance • Hotel
Ordinance 2078). • Transportation
• Film Industry
• Airlinces
Reduction of Tax Rates to Institutional Agricultural
Firms/Companies:
The Tax Rate for Institutional Agricultural Farm will be 50%

of the Applicable Tax Rate.
INCOME TAX SLAB RATE
For Resident Person

FY 2078/79 FY 2077/78
Particulars
Rs. Tax Rate Rs. Tax Rate
Assessed as Individual
First Tax slab 4,00,000 1% First Tax Slab 4,00,000 1%
Next 1,00,000 10% Next 1,00,000 10%
Next 2,00,000 20% Next 2,00,000 20%
Next 13,00,000 30% Next 13,00,000 30%
Balance Exceeding 20,00,000 36% Balance Exceeding 20,00,000 36%
Assessed as Couple
First Tax Slab 4,50,000 1% First Tax Slab 4,50,000 1%
Next 1,00,000 10% Next 1,00,000 10%
Next 2,00,000 20% Next 2,00,000 20%
Next 12,50,000 30% Next 12,50,000 30%
Balance Exceeding 20,00,000 36% Balance Exceeding 20,00,000 36%
For Non-Resident Person
S. N. Nature of transaction FY 2077/78 FY 2076/77
1. Income earned from normal transactions. 25% flat rate 25% flat rate
a. Income earned from providing shipping, air transport or telecommunication 5% 5%
services, postage, satellite, optical fiber project.
b. Income earned providing shipping, air transport of telecommunication 2% 2%
services through the territory of Nepal.
c. Repatriation by Foreign Permanent Establishment. 5% 5%

INCOME TAX NOTES – TAX RATES
1. Natural person working at remote areas are entitled to get deduction from taxable income to a maximum of Rs. 50000.
2. Social Security Tax shall not be applicable for natural person having pension income.
3. Incapacitated natural person shall be entitled to get deduction from taxable income an additional 50% of amount prescribed under first
tax slab.
4. A Resident natural person who has procured life insurance and paid premium amount thereon shall be entitled to a deduction of actual
annual insurance premium or Rs. 25000 whichever is less from gross taxable income.
5. A Resident natural person who has procured Health Insurance and paid premium amount thereon shall be entitled to a deduction of
actual annual insurance premium or Rs. 20000 whichever is less from gross taxable income.
6. A Resident natural person who has procured Insurance Policy for his house and premium thereon shall be entitle to a deduction
of actual annual insurance premium of NPR 5000 whichever is lower from his gross taxable income.
7. In case of the employee employed at the foreign diplomatic mission of Nepal only 25% of the foreign allowances are to be included in
the income from salary.
8. In case of the employee posted outside Nepal is getting foreign allowance will get 75% rebate of such allowance.
9. In case of the female employee whose taxable income is only from employment than 10% rebate is allowed on tax liability.
10. Any resident natural person having pension income will get additional deduction from taxable income of the amount equivalent to 25% of
the amount of first slab from the taxable income.
(Reintroduced from Finance Ordinance, 2078)
11. In case of gain on disposal of listed securities owned by resident natural person, the concerned stock exchange at the time of settlement of
transaction shall levy tax at the rate of:
- 5% of profit if held for more than 365 days and
- 7.5% of profit if held for a period of 365 days
(Till Last FY, it was 5% for irrespective of holding period of securities)

INCOME TAX The major changes brought forward by finance bill 2078/79 relating to Income Tax
Section Amended Provision Existing Provision

Income Earned By Mutual Fund (Licensed from Securities
Board of Nepal) as per it’s objective will be exempt from
10(Tha) New Provision introduced by finance Ordinance 2078.
the Income Tax
Income Earned by the Education Institute operated as Not

for Profit Earning or Distribution as per the MOU with the
10(Da) New Provision introduced by finance Ordinance 2078.
Governement will be exempt from the Income Tax. Such
Profit should be as per it’s objective.
Agriculture Income by Individual not having any registered
firm shall be exempt from Income Tax.
Agriculture Income by Individual not having any registered firm shall
11(1) However, Agriculature Income Earned by any Registered
be exempt from Income Tax.
Firm, Company, Partnership or Body Corporates (Sangathit
Sanstha) shall be 50% exempt from the Income Tax.
#Registered Firm # Agriculture Business
Income from Export having source in Nepal in any Financial Income from Export having source in Nepal in any Financial Year shall
Year shall be exempt as follows: be exempt as follows:
a) In case of Resident Individual whose income is taxed at a) In case of Resident Individual whose income is taxed at the rate of
the rate of 20%; 25% rebate is available. In case of 20%; 25% rebate is available. In case of Resident Individual
Resident Individual whose income is taxed at the rate whose income is taxed at the rate of 30%; 50% rebate is
of 30%; 50% rebate is available available
11(3Na)
b) In case of Entity, 20% rebate b) In case of Entity, 20% rebate
c) Income from Export of the goods manufactured by the c) Income from Export of the goods manufactured by the
Manufacturing Industries shall be exempt by extra Manufacturing Industries shall be exempt by extra 25% rebate on
35% rebate on tax after making rebate under clause tax after making rebate under clause (a) or (b) as applicable
(a) or (b) as applicable
#Export # Manufacturing Industires

INCOME TAX The major changes brought forward by finance ordinance 2078/79 relating to Income Tax
Tax concession of 50% shall be provided for first 3

Tax concession of 25% shall be provided for first 5 years from start of
years from start of operation and 25% Tax Concession
operation to Special industry established in industrial area or industrial
shall be provided for Subsequent 5 years from start of
11(3Da) village.
operation to Special industry established in industrial area
or industrial village.
Added by finance Act 2077
#Special Industry # Industrial Villiage/Are #Tax Rebate
Tax Concession of 20% will be available on Income

earned by Domestic Manufacturer of Raw Material and
Auxiliary Raw Material who sell their product to the
11(3Dha) Added by Finance Ordinance, 2078 (New Provision)
Special Industry.
#Domestic Manufacturer # Selling to Special Industries
100% Tax Exemption will be available to Start up having

turnover upto 1 Crore and Using New Technology, Skill,
Idea, Knowledge etc for the Period of 5 Years from the
11(3Na) Added by Finance Ordinance, 2078 (New Provision)
Date of Starting Business
#Start up #New Tech/Skill #5 Years

Special Industry operating in Kathmandu Valley and
Shifting outside Kathmandu Valley will get Tax Concession
of 100% for the period of 3 Years from the date of
11(3pa) Operation to New Place and 50% Tax Concession for the Added by Finance Ordinance, 2078 (New Provision)
Next 2 Years
#Special Industry #Shifting outside Ktm Valley


Tax Concession of 50% for the first 3 years and 25% for
the subsequent 2 Years from the date of Operation to the
11(pha) Industries producing New Goods from the Used goods that Added by Finance Ordinance, 2078 (New Provision)
make direct effect to Environment
#Tax Concession #Manufacturer #From used Goods
Seed Capital given to New Start Up:
Seed Capital Given to New Start up being Unrelated
Party shall be given as deduction from the Income.
12 (Ga) The maximum limit is NPR 100,000 per start up and upto Added by finance bill 2077
Maximum 5 Start up.
#Deduction # Seed Capital # Max 100,000 for 5 Start

Ups
Any Person making Contribution in Covid Related Fund
29 of FO, Established by Federal Government, Provincial Govt or
Finance Ordinance, 2078, Continued the Previous Year Provision
2078 Local Government in FY 2077-78 will be allowed to
deduct such Fund


Applicability
Tax in case of resident natural person fulfilling the following Applicability:
conditions: Tax in case of resident natural person fulfilling the following conditions:
a. The person has income from source in Nepal only a. The person has income from source in Nepal only
b. The person has not opt for tax credit u/s 51 and 93 b. The person has not opt for tax credit u/s 51 and 93
Sec 4(4) & Sec c. The person has profit upto Rs 300 thousands and turnover upto c. The person has profit upto Rs 200 thousands and turnover upto 2 Million
1(7) of Sch 1 3 Million d. The Person has opted to tax under presumptive Basis
d. The Person has opted to tax under presumptive Basis e. The Person is not registered in VAT
For the e. The Person is not registered in VAT
FY 2077-78 Tax Rate
Tax Rate Business Operating at:
Business Operating at: a. Metropolitan or Sub Metropolitan- Rs 7500
a. Metropolitan or Sub Metropolitan- Rs 7500 NPR 750 (90% b. Municipality- Rs 4,000
Rebate) c. Other than a and b- Rs 2,500
b. Municipality- Rs 4,000 NPR 400 (90% Rebate)
c. Other than a and b- Rs 2,500 NPR 250 (90% Rebate)
Applicability Applicability:
Tax in case of resident natural person fulfilling the following Tax in case of resident natural person fulfilling the following conditions:
conditions: a. The person has income from source in Nepal only
a. The person has income from source in Nepal only b. The person has not opt for tax credit u/s 51 and 93
b. The person has not opt for tax credit u/s 51 and 93 c. The person has profit upto Rs 2 Lacs and turnover upto 20Lacs
c. The person has profit upto Rs 300 thousands and turnover upto d. The Person has opted to tax under presumptive Basis
Sec 4(4) & Sec e. The Person is not registered in VAT
3 Million
1(7) of Sch 1
d. The Person has opted to tax under presumptive Basis
e. The Person is not registered in VAT Tax Rate
For the
FY 2078-79 Business Operating at:
Tax Rate a. Metropolitan or Sub Metropolitan- Rs 7500 NPR 750 (90% Rebate)
Business Operating at: b. Municipality- Rs 4,000 NPR 400 (90% Rebate)
a. Metropolitan or Sub Metropolitan- Rs 7500 c. Other than a and b- Rs 2,500 NPR 250 (90% Rebate)
b. Municipality- Rs 4,000
c. Other than a and b- Rs 2,500


Applicability:
Applicability:
Tax in case of resident natural person fulfilling the following conditions:
a. The person has income from source in Nepal only
Sec 4(4ka) & b. The person has turnover more that Rs 20 Lacs but less than Rs 50Lacs
b. The person has turnover more that Rs 20 Lacs but less than Rs 50Lacs
Sec 1(17) of Sch c. The Person is not registered in VAT
c. The Person is not registered in VAT
1 d. The person doesn’t provide consultancy services & Expert services
d. The person doesn’t provide consultancy services & Expert services
For the Tax Rate
Tax Rate (75% Rebate Provided)
FY 2077-78
• Person conducting transaction with up to 3% value addition or
• Person conducting transaction with up to 3% value addition or commission
commission including gas, cigratte---- 0.25% of the turnover 0.0625%
including gas, cigratte---- 0.25% of the turnover
• Person other than specified above----- 0.75% of the turnover 0.1875%
• Person other than specified above----- 0.75% of the turnover
• Service Provider-------------2% 0.5%
• Service Provider-------------2%
Applicability:
b. The person has turnover more that Rs 3 Million but less than Rs 10 Applicability:
Millions and Profit is upto 1 Milion Tax in case of resident natural person fulfilling the following conditions:
c. The Person is not registered in VAT a. The person has income from source in Nepal only
d. The person doesn’t provide consultancy services & Expert services b. The person has turnover more that Rs 20 Lacs but less than Rs 50Lacs
Sec 4(4) & Sec
c. The Person is not registered in VAT
1(7) of Sch 1
Tax Rate d. The person doesn’t provide consultancy services & Expert services
• Person conducting transaction with up to 3% value addition or
For the
commission including gas, cigratte---- Tax Rate (75% Rebate Provided)
FY 2078-79
3 Million to 5 Million---------0.25% of Turnover • Person conducting transaction with up to 3% value addition or commission
5 Million to 10 Million---------0.30% of Turnover including gas, cigratte---- 0.25% of the turnover 0.0625%
• Person other than specified above • Person other than specified above----- 0.75% of the turnover 0.1875%
3 Million to 5 Million---------1% of Turnover • Service Provider-------------2% 0.5%
5 Million to 10 Million---------0.80% of Turnover
• Service Provider (3 Million to 10 Million)------------- 2%

Applicable For Amended Provision

Any person having turnover upto
10 Million NPR
• 50% Tax Rebate on Applicable Tax
Rebate for the FY 2077-78
Hotel, Travel, Trekking, Film

Business (Production, Distribution & • Income Tax Rate will be 1%
Show), Media House, • Applicable for FY 2077-78
Transportation or Airlines having • Loss for the FY 2076-77 & 2077-78 Shall be carried forward for 3 more years if unadjusted
transaction more than 10 Million
INCOME TAX Time Extension to take Merger Benefits for Bank/FI & Insurance Industries
Entity under Same Categories intending to be disposed by An Entity intending to be disposed by merger/acquition pursuant to
47 Ka (6) merger/acquisition pursuant to 47ka(1) need to give LOI 47ka(1) need to give LOI to Inland Revenue Department within Ashad
to Inland Revenue Department within Ashad End 2079. End 2078.
Entity Intending to be disposed by Merger/Acquisition Entity Intending to be disposed by Merger/Acquisition pursuant to

47 Ka (7) pursuant to 47ka(1) shall complete merger/acquisition not 47ka(1) shall complete merger/acquisition not later than Ashad End
later than Ashad End 2080. 2079.

INCOME TAX Existing provisions of Income Tax relevant to business entity not amended by finance ordinance 2078/79
Section Nature of entity Applicable for both FY 2078/79 and 2077/78
Domestic income
Normal Rate (NR) 25%
Other
Providing direct employment to Nepalese citizens by special industries
and information technology industries for whole year:
For 100 or more Nepali National 90% of Normal Rate

11(3) (Ka)
For 100 Nepalese including 33% women, dalit & disabled by Special
Additional 10% rebate
industries.
Special industries operating in highly undeveloped(remote), undeveloped,

shall be eligible for reduced tax rate of 10%, 20%
less developed area starting from the date of commercial production or
11(3)(Kha) and 30% of applicable tax rate respectively for
operation.
ten income years including first income year
#date of commercial production

Special industry and tourism industry (excluding casino) 100% income tax exemption for five years from the date of
11(3)(Ga) established with capital investment exceeding Rs. 1 billion commencement of business and
and providing direct employment to more than 500 50% exemption for three years thereafter.
individuals throughout the year shall be eligible for
Provided that, special and tourism industry (excluding casino)

currently in operation, where such industry increases its
capital investment to at least Rs. 2 billion and provides direct
Proviso to section 100% exempt up to first five years and 50% rebate in
employment to more than 300 individuals throughout the
11(3)(Ga) subsequent years
year along with enhancement in capacity by at least 25%,
there shall be full tax exemption on income generated from
enhanced capacity
Industry established in 'Special Economic Zone' recognized in Up to 10 years 100% exempt and 50% rebate in subsequent
11 (3Ka)
mountain areas or hill areas by the GON years
Industry established in 'Special Economic Zone' other than 100% exempt up to first five years and 50% rebate in
11 (3Ka)
above locations subsequent years
Dividend distributed by the industry established in the Dividend Tax is 100% exempt up to first five years and 50%
11 (3Ka)
special economic zone rebate in subsequent 3 years
Income derived by the foreign investors from investment in

11 (3Ka) 'Special Economic Zone'( source of income use of foreign 50% of applicable tax rate
technology, management service fee and royalty)

11 (3Yna) Income from sale by intellectual asset by a person through transfer 50% of applicable tax rate
Tourism Industry or International Airlines established with more than NPR 2 100% Tax Exemption for first 5 Years and 50%
11 (3Ta)
Billion Tax Exemption for next 3 years
11 (3Tha) Dividend Distribution Tax in case Special Industry, Industry based in 100% exempt of Dividend Tax
Agriculture and Tourism sector capitalizing its profit for the purpose of
expansion of capacity of industry.
11 (3Da) Private Company having Paid up Capital NPR 500 Million or More 10% Rebate in Income Tax for 3 Years
converted into Public Company
11 (3Dha) Domestic Tea Production & Processing Industries, Dairy Industries & Textile
Industries 50% of applicable tax rate
11 (3Ana)
Health Services Provided by the Community 20% Reduction of Income Tax Act
Income generated by micro industries for Seven years from the date of
commencement of business or transaction. Where such industry is owned by
11(3ta) 100% exemption of income tax
woman, there shall be tax exemption for another three years thereafter.
#seven years, three years
Dividend Distribution Tax in case Special Industry, Industry based in

11 (3Tha) Agriculture and Tourism sector capitalizing its profit for the purpose of 100% exempt
expansion of capacity of industry.

Person or entity who has obtained license for commercial production, transmission, -100% of applicable tax for the first 10 years
and distribution of electricity by Chaitra end 2080 shall be eligible for a from the date of commercial production of
concession of electricity
11(3Gha) -50% of the applicable tax for the next 5
years.
Such facility shall also be provided to electricity produced from solar, bio or
wind energy.
ka. Operation of Trolley or Tram - 40 %
concession
Entities carrying out the following transactions shall be provided following Kha. Construction and operation of Ropeway,
11(3Cha) concession for 10 years from the date of commencement of commercial Cable Car, Sky Bridge – 40% Concession
transactions/operations on the income tax levied: Ga. Construction & Operation of Roads, Bridge,
Tunnel Way, Tunnel, Railway, Airport - 50
%concession
Income manufacturing industry, tourism service industry hydropower generation,
11(3Chha) distribution and transmission industry listed in the security exchange (i.e. capital 85% of applicable tax rate
market)
There shall be tax concession of 40 % for ten

There shall be tax concession of 40 % and 25 % for ten years from the date of
years from the date of Operation, if an
11(3Ja) Operation, if an industry produces brandy, cider or wine based on fruits in highly
industry produces brandy, cider or wine based
undeveloped area and undeveloped area respectively.
on fruits in highly undeveloped area.
11 (3Jha) Royalty from export of Intellectual Asset by a person 75% of applicable tax rate


Rate as per nature of vehicles
1. Car, Jeep, Van and Micro Bus
Up to 1300CC Rs. 4,000
From 1301 CC to 2000 CC Rs. 4,500
From 2001 CC to 2900 CC Rs. 5,000
From 2901 CC to 4000 CC Rs. 6,000
Above 4001 CC Rs. 7,000
2. Mini Truck, Mini Bus & Water tanker Rs. 6,000
Presumptive tax in case a Resident Natural Person is engaged in 3. Mini Tripper Rs. 7,000
Sch 1(13)
business of Public Vehicles 4. Truck & Bus Rs. 8,000
5. Dozers, Excavator, Loader, Roller, Crane
and like such machinery equipment
Rs.12,000
6. Oil tanker, Gas Bullet and tripper
Rs.12,000
7. Tractor Rs. 2,000
8. Power tiller Rs. 1,500
9. Auto Rickshaw, Three wheeler, Tempo Rs. 2,000
Domestic Tea Production & Processing Industries, Dairy Industries &
11 (3Dha) 50% of applicable tax rate
Textile Industries
11 (3Ana) Health Services Provided by the Community 20% Reduction of Income Tax Act

Bank and Financial Institution
Commercial banks, Development Banks and Finance companies 30%
Insurance business
Sch 1 Sec General insurance business 30%

2(2)
Petroleum Industries
Entity engaged in Petroleum business under Nepal Petroleum Act , 2010 30%
Merchant Banks, Telecommunication and Internet Services Industry,

Money Transfer Capital Market, Commodity Future Market, Securities
30%
Brokers and Companies involved in securities business
Non resident carrying on air and water transport and

Telecommunication services in Nepal :
Sch 2 Sec 5%
a. If the goods and Passengers embarking from Nepal
6 2%
b. If a person books ticket from Nepal but the departure is from any
foreign country

INCOME TAX Withholding Taxes
Interest income from deposit up to Rs 10000 under 'Micro Finance Program', 'Rural Development Exempt from Exempt from
A.
Bank', 'Postal Saving Bank' & Co-Operative (u/s-11(2ka) in Village Municipality areas tax tax
Wind fall gains
25% 25%
B. Wind fall gains from Literature, Arts, Culture, Sports, Journalism, Science & Technology and Public
Nil Nil
Administration amount received up to 5 lacs
Payment of rent by resident person having source in Nepal
C. 10% 10%
However no TDS on payment of rent to natural person.
D. Profit and Gain from Transaction of commodity future market 10% 10%
Profit and Gain from Disposal of Shares:
In case of Natural Resident Person
5% 5%
- Listed Shares held for more than 365 days
7.5% 5%
- Listed Shares held for 365 days or less
10% 10%
- Non Listed Shares
E. Resident Entity
10% 10%
- Listed Shares
15% 15%
- Non Listed Shares
Others
25% 25%
- Listed Shares
25% 25%
- Non Listed Share
On dividend paid by the resident entity.
F. - To Resident Person 5% for both 5% for both
- To Non Resident Person
G. On payment of gain in investment insurance 5% 5%
H. On payment of gain from unapproved retirement fund 5% 5%
On payment of interest or similar type having source in Nepal to natural person [ not involved in
I. any business activity by Resident Bank, financial institutions or debenture issuing entity, or listed 5% 5%
company
J. Payment for articles published in newspaper No TDS No TDS


K. Interest payment to Resident bank, other financial institutions No TDS No TDS
L. Interregional interchange fee paid to credit card issuing bank No TDS No TDS
M. Interest or fees paid by Government of Nepal under bilateral agreement No TDS No TDS
N. On payment of general insurance premium to resident insurance company No TDS No TDS
O. On payment of premium to non-resident insurance company 1.5% 1.5%
P. Contract payment exceeding Rs 50000 for a single contract within 10 days. 1.5% 1.5%
Q. Interest & Dividend paid to Mutual Fund No TDS No TDS
Payment of consultancy fee:
R. - to resident person against VAT invoice 1.5% 1.5%
- to resident person against non VAT invoice 15% 15%
Payment on contract to Non Resident Person
5%
S. - On repair of aircraft & other contract 5%
15%
- Other than above 5%
TDS deducted on payment of dividend made by Mutual fund to natural Person is final
T. 5% 5%
withholding Tax.
TDS on Payment by Resident Person for utilizing services related with Satellite,
U. Bandwidth, Optical Fiber, equipment relating to telecommunications or electric
10% 10%
transmission
V. Dividend Paid by Partnership Firm to its Partners 5% 5%
2.5%
W. Payment for the freight to transportation service or Renting of Transporation vehicle 2.5% 1.5% (VAT
Registered)


Renting of Vehicle
1.5% 1.5%
8X. -VAT Registered
10% 10%
-No VAT Registered
Y. Payment made against question setting, answer evaluation 15% 15%
Z. Payment to Non Resident Company against Commission paid for Reinsurance 1.5% 1.5%
AA. Payment made to Consumer Committee 1.5% 1.5%
AB Commercial Import of Buffalo, Goat, Sheep, Fresh & Frozen Fish, Fruits, 5% of Custom Value 5% of custom value
On Import of Meat, Milk Product, Egg, Honey, Millet, Buckwheat, Junelo, Rice, Wheat
AC 2.5% 2.5%
Flour, Meslin Flour, Other Flours, Herbs, Sugarcane, Herbal products
Foreign Currency Exchange service by resident bank for students going abroad for
AD 15% (TCS) 15% (TCS)
study making payment for language exam and standardized test
Interest paid by resident bank and financial institution to foreign bank or financial
AE 10% 15%
institution
In case of the encouragement amount received by consumer of good and services for
the payment made through payment cards, E-Money (Wallet), Mobile Banking and
AF No TDS No TDS
electronic payment during purchases as per the prevailing laws, no tax shall be
deducted.
1% (TCS)
Payment received by a person in foreign currency for providing software or other
AG To be Collected by No TCS
electronic services of similar nature outside Nepal.
Bank/FI/Money T/F
AH Interest on Deposit of Life Insurance Companies 5% 15%


Registration Fee, Education Fee or Exam Fee paid to
88(1)(11) Earlier Generally covered as Service Fee/Royalty and 15%
Foreign Education Institute or University 5%
withholding taxes is applicable
withholding tax will be applicable
The Provision has been withdrawn.
However, the same is governed by 88(4(ga) and hence still No Withholding on payment of dividend and interest to Mutual Fund.
88(4)(Na)
No Withholding.
In case a person receives payment in foreign currency for
providing software or other electronic services of similar
95Ka(6kha) nature outside Nepal, the concerned bank, financial New Provision introduced by Finance Ordinance 2078.
institution and money transfer institution shall collect
advance tax at the rate of one percent of the payment
received.
No advance tax shall be collected in the case of gain acquired from
95Ka(4) Removed by Finance Ordinance 2078
disposal of securities of an entity owned by mutual fund.
In case of gain on disposal of securities of an entity
enlisted in the Securities Board of Nepal, the entity
In case of gain on disposal of securities of an entity listed in the
working for stock exchange shall collect advance tax at
Securities Board of Nepal, the entity working for stock exchange shall
the rate of 5% of profit if held for a period of more
95Ka(2)(Ka) collect advance tax at the rate of five percent of profit for a resident
than 365 days and 7.5 percent of profit if held for a
individual, ten percent of the profit for a resident entity and twenty
period of 365 days or less for a resident individual,
five percent of the profit for others.
10% of the profit for a resident entity and 25% percent
of the profit for others.
Payment for vehicle hire or hire of transport vehicle or
transportation services of an individual except a private
Payment for motor vehicle rent or transportation services of an
92(1)(ta) firm
individual except private firm
(Final Withholding Payment, More Coverage)

VALUE ADDED TAX VAT Rate
No
Change in
Value
Added
13%
Tax Rate
VAT Threshold
5 Million NPR
2 Million NPR 2 Million NPR
Person dealing in Person dealing in Person dealing in

goods Services Goods & Services both
Waiver of interest, Fees, Fines and Penalties
Where an appeal filed in Administrative Review, Revenue Tribunal or in

the court relating to Tax finalized up to Ashad end 2077 under VAT Act
2052 or amended tax amount thereon except in relation to false or
duplicate bills is withdrawn and the VAT amount including 50 % Interest
up to the date of application of utilizing the benefits provided is paid
by the end of Mangsir 2078.
VALUE ADDED TAX Summary of Changes in Value Added Tax
- Existing Value Added Tax rate of 13 percent for the VAT Exemption – Addition to Schedule 1
fiscal year 2078/79 remains unchanged except stated in - Service charge of E-Library
Schedule 1 and Schedule 2.
- Silo and service related to stock of farm produce in Silo
- List of specific businesses specified under section 10(2) Group 11 8479.89.60
that require mandatory registration has been deleted.
- Money Exchange, Swift Service, Hire purchase transaction,
- VAT credit on Diesel, Petrol (Other than used in Vehicle) Deposit and Credit Guarantee Service
and LP gas consumed for production of taxable goods
can now be availed. - Service relating to issuing Certificate of origin for export
- Mandatory Electronic Billing for all VAT Registered Tax - Service relating to Trekking and Tour Packages
Payer gradually.
- Rent on transportation of goods, transportation services
- Instant Refund of 10% of VAT paid through Debit Card, (other than related to supply) and cargo service.
Credit Card, QR code, Scan to Pay or other electronic
medium on purchase of goods or services. - VAT Exemption on import of Medical Equipment's, Oxygen
cylinders up to 2078 Poush End
- While Making Payment to concerned contractor or
supplier in respect of supply of goods services or both - New Format of Purchase Register & Sales Register has
under any agreement or contract, the Government entity, been Prescribed. (Quantity, Name of Goods/ Service). In
institution or Organization, Govt Authorities shall directly case of Export ‘Country of Export’
withhold and deposit 30% of the VAT amount (Previously
it was 50%).

VALUE ADDED TAX Summary of Amendments in Value Added Tax
- Provision for attestation of Sales and Purchase register for
each financial year by tax officer has been withdrawn. Now,
assesse can maintain the record of purchase and sales on self
verified register. Such register may be demanded and
checked by Tax officer at any time.
- VAT Exemption on import of Medical Grade Oxygen, Liquid

Oxygen, Oxygen cylinder, Oxygen plants and other life
saving medical equipment's and medicines up to 2078 Poush
End.
- Provision related mandatory registration of specified business

has been withdrawn. Now, those business can operate in
municipality without VAT registration if the sales is below 20
lacs in case of service and 50 lacs in case of goods.
- Services like e-library service, cargo service, trekking and tour

packages, rental charges on transportation has been included
in Schedule 1 of the Act.

VALUE ADDED TAX The major changes brought forward by finance ordinance 2078/79 relating to VAT

Where the transaction of goods or services of a person becomes
taxable or the person conducts following transactions, the person shall
make an application in the prescribed format for the purpose of
registration in front of tax officer within 30 days of transaction being
taxable or operation of transaction:
Where the goods or services transacted by a person
becomes taxable, such person shall submit an a. Operation of business related to brick production, alcohol, wine,
application for registration in prescribed form within 30 health club, discotheque, massage therapy, motor parts, electronic
days of date of operation of such transaction or date software, customs agent, toys business, trekking, rafting, ultra light
10 (2)
on which such tax is attracted. flight, paragliding, tourist vehicle, crusher, sand mine, slate or stone.
Removed: List of specified business that requires b. Where a person conducts business of hardware, sanitary, furniture,
mandatory registration in VAT has been deleted. fixture, furnishing, automobiles, electronics, marble, Educational
consultancy, Account and Audit related services., catering service,
party palace, parking service, dry cleaners using machinery,
restaurant with bar, ice cream industry, colour lab, boutique, uniform
supplier for educational, health or other entities inside Metropolitan
City, Sub Metropolitan City, or areas as prescribed by department.
Registered person requires to update the information Registered person requires to update the information relating to
10 (ga) relating to registration in the biometric of record registration in the biometric of record department within the time limit
department within the time limit prescribed. prescribed.
Any person whether registered or not involving in
transaction in relation to goods or service which is
A registered person shall use the purchase and sales registered duly
16 (3) subject to tax shall prepare and maintain the self
attested from tax officer for the purpose of accounts.
attested sales and purchase register. Such register may
be demanded and checked by Tax officer at any time.

Every unregistered person dealing in transaction of taxable goods

and services shall use purchase book and sales book duly attested by
16 (3ka) Section 16 (3ka) has been deleted.
themselves. Such accounts may be examined by the tax officer as and
when the tax officer desires so.
Tax paid on goods damaged as a result of fire, theft, Tax paid on goods damaged as a result of fire, theft, accident,
16 (kha) accident, breakage or terrorist activities or on expired breakage or terrorist activities shall be allowed as credit as
goods shall be allowed as credit as prescribed. prescribed.
Notwithstanding anything contained in Subsection 4, If the

vat liability is amended or reduced by Revenue Tribunal
or other court having authority, the tax officer cannot
Sec 20(4Kha) New Provision added by Finance Bill 2078
make the amended assessment. However, if the court
orders for the amendment assessment, s/he can make
amended assessment.
Collection of VAT:
Section 21 by publication or transmission or enlisting on the website
New Provision added by Finance Bill 2078
(1)(jha) of department the name of taxpayer who has not
submitted tax within the limit prescribed.
Any person involved in following offences will be
penalized by the tax officer as prescribed: Any person involved in following offences will be penalized by the
Section 29(1)
Rs. 1000/- for per violation of Section 16(3ka). tax officer as prescribed:
(cha 1)
Rs. 1000/- for per violation of Section 16(3ka).
This provision has been deleted by Finance Bill 2078

Public Circular:
The department shall make available the circulars issued The department shall make available the circulars issued pursuant to
Section 32kha
pursuant to section 32 kha(1) for the public information section 32 kha(1) for the public information through publishing at its
(2)
through publishing at its own website or at national level own website or at national level newspaper.
newspaper or through other electronic medium.
Deposits to be kept:
1. While filing an appeal in the revenue tribunal under
this Act, the undisputed amount out of the assessed
tax shall be paid and a deposit equal to fifty percent
While filing an appeal in the revenue tribunal under this Act, the
of the disputed amount of assessed tax and penalties
undisputed amount out of the assessed tax shall be paid and a
thereto shall be made in cash or by producing a bank
Section 33 deposit equal to fifty percent of the disputed amount of assessed tax
guarantee.
and penalties thereto shall be made in cash or by producing a bank
guarantee.
2. While calculating the deposit or bank guarantee
pursuant to subsection 1, amount equal deposited (25
% of Tax) in the IRD for the administrative review
shall also be taken in account.

VALUE ADDED TAX Benefits provided by finance ordinance 2078/79 in relation to VAT
Section Tax Benefits Conditions
Where an appeal filed in Administrative Review, Revenue Tribunal or in the court

relating to Tax finalized up to Ashad end 2077 under VAT Act 2052 or amended tax
Waiver of 50 % interest, Fees, Fines and
20 amount thereon except in relation to false or duplicate bills is withdrawn and the VAT
Penalties
amount including 50 % Interest up to the date of application of utilizing the benefits
provided is paid by the end of Mangsir 2078.
If 75 % of Tax Outstanding under different Tax Act like Hotel Tax, Entertainment Tax,
21(1) Waiver of Fees, Penalties and Interest Contract Tax and Sales Tax Act established under VAT 2052 is paid by the end of
Poush 2078
If the assessed/reassessed tax amount under VAT act 2052 up to Ashad End 2076
21(2) Waiver of Fees and Penalties except in relation to falsified or duplicate bills, is paid along with the interest up to the
date of application of availing the benefit provided by the end of Poush 2078
If the Non-Profitable Community Hospital or Health Institution and transportation

service provided through electronic medium submits an application for the wavier of
21(3) Waiver of Total Outstanding Amount
Outstanding VAT amount assessed/reassessed up to Jestha 15 2078 by the end of
Poush 2078 provided the assesse is not in legal process.

VALUE ADDED TAX Benefits provided by finance ordinance 2078/79 in relation to VAT
Section Tax Benefits Conditions
In case of issue of the certificate of origin for the purpose of export till Jestha 14,
22 Waiver of VAT, Interest and Penalty
2078
If the VAT on transaction entered by Travel and Trekking Agency is not collected or
Waiver of Additional Fees, Interest and
23(1) submitted in VAT Exempt section of VAT return and VAT on such transaction up to
Penalty
Jestha 14, 2078 is self declared and paid by the end of Poush 2078.
Waiver of Additional Fees, Interest and If the assessed VAT amount out of outstanding VAT amount pursuant to transaction
23(2)
Penalty submitted in VAT return as per subsection 1is paid by the end of Poush 2078.
If the legal cases pending in the court or administrative review for the assessed VAT
Waiver of Additional Fees, Interest and
23(3) amount pursuant to subsection 2 is taken back and the assessed amount is paid by the
Penalty
end of Poush 2078.
If the Health Institution requiring to pay the VAT amount after set off of VAT paid on
24 Waiver of Additional Fees and Interest purchase of goods or service with the VAT collected on vatable sales is paid by the
end of Ashad 2079.

EXCISE DUTY Excise Waived
Electrical Cars, Jeep, Van
Major Highlights
25% of Excise amount deposited during

administrative review shall be considered while
computing deposit amount during application to
Revenue Tribunal.
Excise duty rate in Alcoholic and Non Alcoholic

Beverages under Heading 22.02, 22.03, 22.04,
22.05, 22.06, 22.07 and 22.08 has been
increased.
Excise duty rate in Tobacco and Tobacco Products

under the Heading 24.01, 24.02 and 24.03 has
been increased.
Excise Duty Reduced from 60% to 40 % on

Hybrid Vehicles.
EXCISE DUTY Summary of Amendments in Excise Duty
• Excise Duty on removed on Electric Vehicles. Excise Duty • Section 19(6Ka) – The person applying to Revenue Tribunal
has been reduced in case of Hybrid Vehicles. according to Sub-section (6) shall pay the entire of the
undisputed amount of excise duty out of the amount of excise
• Section 4Gha (2) – A businessperson, other than hotel, duty assessed and deposit or provide a Bank Guarantee for
restaurants and party palace, carrying on the transaction 50% of the disputed amount of excise duty and fine.
of liquor shall only transact liquor and tobacco.
• Section (6Kha) – For the computation of deposit or Bank
• Section 16 (2) (Ga1) – In case licensee engages in Guarantee to be provided according to 6Ka, one-fourth of
production, removal, storage or sale distribution of beer, the excise amount deposited while making an application for
cigarette or tobacco products commits in others brand administrative review should also be considered.
name or without any brand name to conceal, hide or
evade excise duty, such a person shall be punished with a • (Except Bogus/False Bills) Assessed/Reassessed till Ashad End
fine in a sum equivalent to two hundred percent of the 2077 under Excise Act, 2058 and pending in Revenue
claimed amount or One Lakh Rupees, whichever is higher Tribunal/Court if withdrawn and paid Excise Duty & 50% of
or with imprisonment for a term not exceeding one year Interest, Fine, Penalties & 50% interest shall be waived. Due
or with both punishments. Date is 2078 Mansir End.
• Section 16 (3) – The claimed amount pursuant to Clause • Dues pending under Excise Act, 2015 shall be waived if
(e) of Sub-section (1) and Sub-section (2) shall be fixed taxpayer pays 75% of the Duty within Paush 2078. In that
by adding the value of the excisable goods determined case 25% of the duty, interest, fine, penalties will be waived.
based on the strength, quantity and shape of goods or in Dues pending under Excise Act, 2058 and Assessment
case of liquor without brand considering strength of 70 completed within Ashad 2076 and if the tax payer pays the
U.P. wherein the excise duty sticker has been used or duty and interest upto the date of application within Paush
may be used and the excise duty charged on such 2078, the fine & penalties will be waived.
excisable goods. If the goods and services whose claimed
amount is to be fixed has already been sold, their • Taxpayers having expired Excise License willing to renew &
claimed amount shall be fixed based on the selling price continue Business can renew the license within Shrawan 2078
of such goods and services. without paying penalty otherwise License will be Cancelled.

EXCISE DUTY The major changes brought forward by finance ordinance 2078/79 relating to Excise
Excise Duty (% except Excise Duty (% except

Heading Sub-Heading Particulars otherwise specified) for otherwise specified) for
FY 2078-79 FY 2077-78
08.02 Other nuts, fresh or dried, whether or not shelled or peeled
-Macadamia Nuts:
0802.80.00 --Areca Nuts Per Kg NPR 25 5%
0802.90.00 --Others Per Kg NPR 25 5%
Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens,
08.04
fresh or dried
-Dates: 5%
0804.10.10 ---Fresh 5% -
0804.10.20 ---Dried 5% -
Crustaceans, molluscs and other aquatic invertebrates, prepared or
16.05
preserved
-Molluscs:
1605.55.00 --Octopus 10% -
17.01 Cane or beet sugar and chemically pure sucrose, in solid form.
-Raw sugar not containing added flavoring or coloring matter:
--Cane sugar specified in Subheading Note 2 to this Chapter:
1701.13.10 ---Sakhhar (Gud) Per quintal NPR 138 Per quintal NPR 125
--Other cane sugar:
1701.14.10 ---Sakhhar (Gud) Per quintal NPR 138 Per quintal NPR 125
17.03 Molasses resulting from the extraction or refining of sugar.
1703.10.00 -Cane molasses Per quintal NPR 96 Per quintal NPR 80
1703.90.00 -Other Per quintal NPR 96 Per quintal NPR 80
Fruit, nuts and other edible parts of plants, otherwise prepared or
20.08 preserved, whether or not containing added sugar or other sweetening
matter or spirit, not elsewhere specified or included.
-Others, inclusing mixtures:
2008.20.00 ---Pineapple 5% -
Excise Duty (% Excise Duty (%

except otherwise except otherwise
Heading Sub-Heading Particulars
specified) for FY specified) for FY
2078-79 2077-78
21.06 Food preparations not elsewhere specified or included
-Other:
2106.90.20 --Pan Masala without Tobacco Per Kg NPR 812 Per Kg NPR 650
2106.90.60 --Scented areca nuts without Tobacco Per Kg NPR 281 Per Kg NPR 225
Waters, including mineral waters and aerated waters, containing added sugar or
22.02 other sweetening matter or flavored, and other non-alcoholic beverages, not
including fruit or vegetable juices of Heading 20.09
-Other:
2202.91.00 -- Non-alcoholic beer Per litre NPR 20 Per litre NPR 17
--Other:
2202.99.10 ---Energy Drinks Per litre NPR 36 Per litre NPR 30
2202.99.90 ---Other Per litre NPR 14 Per litre NPR 11
22.03 2203.00.00 Beer made from malt. Per litre NPR 198 Per litre NPR 165
Wine of fresh grapes, including fortified wines; grape must other than that of
22.04
Heading 20.09
-Sparkling wine
2204.10.10 -- Alcohol up to 12% Per litre NPR 444 Per litre NPR 370
2204.10.20 -- Alcohol above 12% and below 17% Per litre NPR 444 Per litre NPR 370
2204.10.30 -- Alcohol above 17% Per litre NPR 516 Per litre NPR 430
-Other wine; grape must with fermentation prevented or arrested by the addition
of alcohol:
--In containers holding 2 L or less
2204.21.10 --- Alcohol up to 12% (Only on import) Per litre NPR 444 Per litre NPR 370
2204.21.20 --- Alcohol above 12% and below 17% Per litre NPR 444 Per litre NPR 370
2204.21.30 --- Alcohol Above 17% Per litre NPR 516 Per litre NPR 430


2078-79 2077-78
--Liquor, cocktail (mixture of alcoholic/alcoholic/non-alcoholic) and other
2206.00.40 fermented liquors having mixture of herbs with alcoholic content more than Per litre NPR 516 Per litre NPR 430
17%
2206.00.90 ---Others Per litre NPR 516 Per litre NPR 430
Un-denatured ethyl alcohol of an alcoholic strength by volume of 80% volume
22.07
or higher; ethyl alcohol and other spirits, denatured, of any strength.
-Un-denatured ethyl alcohol of an alcoholic strength by volume of 80% volume or higher:
2207.10.10 ---Un-denatured ethyl alcohol Per litre NPR 70 Per litre NPR 60
--- Rectified spirit used as raw material of liquor having 80% or more
2207.10.20 Per litre NPR 70 Per litre NPR 60
alcoholic content by volume
2207.10.30 --- E.N.A. (Extra Neutral Alcohol) Per litre NPR 76 Per litre NPR 65
2207.10.40 --- Anhydrous Ethanol (having more than 99% alcohol) Per litre NPR 9 Per litre NPR 7
Denature Ethyl Alcohol and Other Sprite (any alcohol percentages)
2207.20.10 ---Denature Sprite (80-99% alcohol) Per litre NPR 20 Per litre NPR 17
Un-denatured ethyl alcohol of an alcoholic strength by volume of less than 80%, spirits, liquors and other spirituous
22.08
beverages
-Spirits obtained by distilling grape wine or grape marc:
--All kinds of alcoholic fluids including spirits used as raw material of wine or
brandy
---Others:
Per litre NPR 1592 Per litre NPR 1325
2208.20.91 --- Prepared alcohol of strength 15 U.P. (having alcoholic content of 48.5%) Per L.P. litre NPR Per L.P. litre NPR
1872 1560


FY 2078-79 FY 2077-78
--- Prepared alcohol of strength 25 U.P. (having alcoholic content of Per litre NPR 1188 Per litre NPR 990
2208.20.92
42.8%) Per L.P. litre NPR 1584 Per L.P. litre NPR 1320
2208.20.93
2208.20.99 --- Others:
Per L.P. litre NPR 1872 Per L.P. litre NPR 1560
-Whiskies
2208.30.10 --Alcoholic fluids including spirits used as raw materials of whisky Per litre NPR 198 Per litre NPR 165
---Others:
2208.30.91
2208.30.92
2208.30.93
2208.30.99 --- Others:
Rum and other spirits obtained by distilling fermented sugar-cane
products:
-- Alcoholic fluids including spirits used as raw materials of Rum and
other spirits obtained by distilling fermented sugar-cane products
--- Others:
2208.40.91
2208.40.92

Heading Sub-Heading Particulars otherwise specified) for FY otherwise specified) for FY
2078-79 2077-78
2208.40.93
2208.40.99 --- Others:
-Gin and Geneva :
--Alcoholic fluids including spirits used as raw materials of Gin and
Geneva
---Others:
2208.50.91
2208.50.92
2208.50.93
2208.50.99 --- Others:
-Vodka
2208.60.10 --Alcoholic fluids including spirits used as raw materials of Vodka Per litre NPR 198 Per litre NPR 165
---Others:
2208.60.91
2208.60.92
2208.60.93
2208.60.99 --- Others:


Heading Sub-Heading Particulars otherwise specified) for otherwise specified) for FY
FY 2078-79 2077-78
-Liquor and Cordials
--Alcoholic fluids including spirits used as raw materials of Liquor
and Cordials
---Others:
--- Prepared alcohol of strength 15 U.P. (having alcoholic content Per litre NPR 1592 Per litre NPR 1325
2208.70.91
of 48.5%) Per L.P. litre NPR 1872 Per L.P. litre NPR 1560
2208.70.92
2208.70.93
2208.70.99 --- Others
-Others:
--Alcoholic fluids including spirits used as raw materials of any
other Liquor
---Others:
2208.90.91
2208.90.92
2208.90.93
2208.90.94
2208.90.95


FY 2078-79 FY 2077-78
2208.90.96
2208.90.99 --- Others
23.09 Things used as fodder for livestock.
2209.10.00 -Dog’s or cat’s food kept for retail sale. 10% -
24.01 Unmanufactured tobacco; tobacco refuse.
2401.10.00 -Tobacco, not stemmed/stripped Per Kg NPR 118 Per Kg NPR 95
2401.20.00 -Tobacco, partly or wholly stemmed/stripped Per Kg NPR 118 Per Kg NPR 95
2401.30.00 -Tobacco refuse Per Kg NPR 118 Per Kg NPR 95
24.02 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes.
2402.10.00 -Cigars, cheroots and cigarillos, containing tobacco Per Loosie NPR 21 Per Loosie NPR 17
-Cigarettes containing tobacco:
2402.20.10 --- Without filter Per M NPR 618 Per M NPR 495
--- With Filter:
2402.20.21 --- Up to 70 mm length Per M NPR 1418 Per M NPR 1135
2402.20.22 --- above 70 mm and up to 75 mm length Per M NPR 1843 Per M NPR 1475
2402.20.23 --- above 75 mm and up to 85 mm length Per M NPR 2400 Per M NPR 1920
2402.20.24 --- above 85 mm length Per M NPR 3393 Per M NPR 2715
-Others:
2402.90.10 -- Prepared quid of tobacco (Bidi) Per M NPR 94 Per M NPR 90
2402.90.20 -- All kinds of Cigars Per Loosie NPR 21 Per Loosie NPR 17
2402.90.90 ---Other Per Stick NPR 21 Per Stick NPR 17
Other manufactured tobacco and manufactured tobacco substitutes; “homogenized” or “reconstituted” tobacco; tobacco
extracts and essences


Heading Sub-Heading Particulars otherwise specified) otherwise specified) for
for FY 2078-79 FY 2077-78
24.03 -Smoking tobacco, whether or not containing tobacco substitutes in any proportion:
2403.11.00 -- Water pipe tobacco specified in Subheading Note 1 to this Chapter Per Kg NPR 1668 Per Kg NPR 1335
-- Others:
2403.19.10 --- Pipe Tobacco Per Kg NPR 1668 Per Kg NPR 1335
2403.19.20 ---Processed Tobacco for Cigarette and Beedies Per Kg NPR 343 Per Kg NPR 275
2403.19.90 --- Others Per Kg NPR 343 Per Kg NPR 275
-Others:
2403.91.00 -- “Homogenized ” or “ reconstituted ” tobacco Per Kg NPR 418 Per Kg NPR 335
-- Others:
--- Jarda, Khaini, Snuff, Ghutka and similar preparations containing
2403.99.10 Per Kg NPR 812 Per Kg NPR 650
chewing tobacco
2403.99.20 --- Packed chewing tobacco, to be mixed in lime, put up for retail sale Per Kg NPR 418 Per Kg NPR 335
2403.99.20 ---Cut tobacco, dust tobacco not for retail sale Per Kg NPR 418 Per Kg NPR 335
-- Other
---Others:
2403.99.91 ----Hukka Flavor Per Kg NPR 1200 Per Kg NPR 1000
2403.99.99 ----Others Per Kg NPR 418 Per Kg NPR 335
Plastic tubes Pipe and Hoses (Long Flexible tubes) and fittings like joints,
39.17
elbows
3917.10.00 --Sausage Casing 5% -
-Tubes, Pipes and Hoses (Long Flexible tubes), strong:
3917.21.00 -Of polymers of ethylene 5% -
3917.22.00 -Of Propylene polymers 5% -
3917.23.00 -Of Vinyl chloride polymers 5% -
3917.29.00 -Of Other plastic 5% -
-Other Tube, Pipe and Hoses (Long Flexible tubes):

Heading Sub-Heading Particulars otherwise specified) for otherwise specified)
FY 2078-79 for FY 2077-78
-- Flexible Pipe and Hoses (Long Flexible Hose) having minimum burst
3917.31.00 5% -
pressure of 27.6 MPA
-- Other, not reinforced or in any other manner mixed with other
3917.32.00 5% -
substance, except fittings (like equipment and parts)
-- Other, not reinforced or in any other manner mixed with other
3917.33.00 5% -
substance, including fittings (like equipment and parts)
3917.39.00 --Others 5% -
3917.40.00 -Fittings (Equipments and Parts) 5% -
39.21 Other plates, sheets, film, foil and strip, of plastics.
-Others:
--Others:
---Printed
3921.90.11 ----Decorative Laminated Sheets like Sunmica and Farmica 5% -
3921.90.19 ----Others 5% -
---Other
3921.90.92 ----Decorative Laminated Sheets like Sunmica and Farmica 5% -
39.25 Builders' wares of plastics, not elsewhere specified or included.
3925.90.30 ---Almunium Composite Panel 5% -
Other articles of plastics and articles of other materials of Headings
39.26
39.01 to 39.14.
3926.90.95 ---Plastic Artificial Grass Turf 5% -
44.12 Plywood, Veneer Panel and similar layered wood with lining.
4412.10.00 -Of Bamboo 5% -
-Any other plywood having complete ply of wood (except Bamboo)
each ply not thicker than 6 mm
4412.31.00 --At least one outer ply is of tropical wood 5% -


FY 2078-79 FY 2077-78
4412.34.00 --Others, at least one outer ply is of non angled species 5% -
4412.39.00 -- Others, both outer ply is of angled wood. 5% -
-- Others:
4412.94.00 --Black board, Lamin board and Baten Board. 5% -
4412.99.00 --Others 5% -
Shoes having Rubber, Plastic, leather or mixed leather sole and cloth on
64.04
upper part
-Shoes having rubber or plastic outer sole
-Sport shoes, tennis shoes, basketball shoes, gym shoes, and so on.
6404.11.10 --Canvas shoes having cotton on upper part. 10% -
64.05 Other Shoes
-having upper parts of cloths.
6405.20.10 --- shoes made from cotton cloth (Canvas shoes) 10% -
Artificial flowers, foliage and fruit and parts thereof; articles made of
67.02
artificial flowers, foliage or fruit.
6702.90.10 ---of Falt 10% -
6702.90.10 ---Others 10% -
72.23 7223.00.00 Non Rusting Steel wire Per Metric Ton NPR 1650 -
72.29 Other mixed steel wire
7229.20.00 -Of Silicon Manganese steel Per Metric Ton NPR 1650
7229.90.00 -Others Per Metric Ton NPR 1650

2078-79 2077-78
Other office machines (for example, hectograph or stencil duplicating
machines, addressing machines, automatic banknote dispensers, coin-sorting
84.72
machines, coin counting or wrapping machines, pencil sharpening machines,
perforating or stapling machines).
-Other:
8472.90.10 ---Automatic Teller Machine 15% -
8472.90.20 ---Automatic Bank Note dispenser 15% -
8472.90.30 ---Perforating Machine 15% -
8472.90.40 ---Stapling Machine 15% -
8472.90.90 ---Other 15% -
Machines and mechanical appliances having individual functions, not specified
84.79
or included elsewhere in this Chapter.
-Other machines and machinery parts
--Other:
---Other:
8479.89.91 ----Air Humidifier and dehumidifier 5% -
8479.89.99 ----Others 10% 10%
Telephone sets, including telephones for cellular networks or for other wireless
networks; other apparatus for the transmission or reception of voice, images or
85.17 other data, including apparatus for communication in a wired or wireless
network (such as a local or wide area network), other than transmission or
reception apparatus of heading 84.43, 85.25, 85.27 or 85.28.
8517.70.00 -Parts 10% 5%


FY 2078-79 FY 2077-78
Motor vehicles for the transport of ten or more persons, including the
87.02
driver.
-With both compression-ignition internal combustion piston engine (diesel or semi-diesel) and electric motor as motors for
propulsion:
8702.20.30 --Microbuses (with a capacity 11-14 seats) 40% 55%
--Jeep, Car and Van
8702.20.41 ---Unassambled 40% 60%
8702.20.49 ---Other 40% 60%
With both spark-ignition internal combustion reciprocating piston engine
and electric motor as motors for propulsion:
8702.30.30 --Microbuses (with a capacity 11-14 seats) 40% 55%
--Jeep, Car and Van
8702.30.41 ---Unassambled 40% 60%
8702.30.49 ---Other 40% 60%
Motor cars and other motor vehicles principally designed for the transports of persons (other than those of Heading 87.02),
87.03
including station wagons and racing cars.
-Other vehicles, with both spark-ignition internal combustion
reciprocating piston engine and electric motor as motors for propulsion,
other than those capable of being charged by plugging to external
source of electric power
8703.40.10 ----Unassembled 40% 60%
8703.40.90 ----Other 40% 60%
-Other vehicles, with both compression-ignition internal combustion piston engine (diesel or semi-diesel) and electric motor as
motors for propulsion, other than those capable of being charged by plugging to external source of electric power
8703.50.10 ----Unassembled 40% 60%
8703.50.90 ----Other 40% 60%


2078-79 2077-78
--Other vehicles, with both spark-ignition internal combustion reciprocating
piston engine and electric motor as motors for propulsion, capable of being
charged by plugging to external source of electric power
8703.60.10 ----Unassembled 40% 60%
8703.60.90 ----Other 40% 60%
-Other vehicles, with both compression-ignition internal combustion piston
engine (diesel or semi-diesel) and electric motor as motors for propulsion,
capable of being charged by plugging to external source of electric power
8703.70.10 ----Unassembled 40% 60%
8703.70.90 ----Other 40% 60%
87.04 Motor vehicles for the transport of goods.
-Other, with compression-ignition internal combustion piston engine (diesel or
semi-diesel):
--g.v.w. not exceeding 5 tons:
8704.21.50 ---installed with Refrigerating System 5% -
95.05 Entertainment goods, magic and novelty goods.
- Goods relating to Christmas festival:
9505.10.10 ---Of Falt 5% -
9505.10.90 ---Others 5% -
9505.90.00 -Others 5% -

CUSTOMS DUTY Duty Waived/Discount
Duty on Machinery and spare parts of

machinery used in tea, jute, hatchery, pasmina,
movie industry, agriculture and nursery farm are
exempted.
Import, production and sale of oxygen gas, liquid

oxygen, oxygen cylinder, oxygen concentrator &
other life saving materials and machines
exempted till Poush end, 2078.
To encourage the use of electric vehicle, excise

duty on electric vehicle is exempted whereas
custom duty is also reduced to great extent.
To encourage the household to use more

electricity, customs duty on induction stove is
reduced to 1% and Excise on refrigerator,
grinder, rice cooker, fan and other electronic
items are exempted and customs is reduced.
Custom duty is also reduced on the import of

containers by shipping company registered in
Nepal.
CUSTOMS DUTY Major Highlights of Budget 2078/79
• Export industry having bonded warehouse facility and • Customs duty on import of industrial raw material must be
importing raw materials on Bank Guarantee, if has not less than the custom on finished goods by at least 1 level.
exported finished goods within the time limit due to covid-
19 pandemic then, the deadline for exporting the finished • Community and private hospitals will be provided the
goods and release of Bank Guarantee has been extended subsidy of 50% on the cost of installation of oxygen plant.
to Chaitra, 2078 end.
• Customs duty on import of baby feeding milk has been
• Export industry producing ready palm oil having bonded reduced by 50%.
warehouse facility and importing raw materials on Bank
Guarantee, if has not exported finished goods within the • Custom duty reduced by 50% on import of single cargo
time limit due to various reasons then, the deadline for vehicle by Agriculture Cooperative Institutions doing farming
exporting the finished goods and release of Bank on group.
Guarantee has been extended to Asoj, 2078 end.
• Industry can obtain renewal of EXIM code for 5 years at a
• Export industry having bonded warehouse facility and time.
importing raw materials on condition to export such finished
goods within 1 year on cash security or Bank Guarantee, if • New custom office shall be established and operated in
has not exported finished goods within the time limit due to Gautam Buddha International Airport, Pokhara International
covid-19 pandemic then, the deadline for exporting the Airport and Janakpur Railways.
finished goods and release of cash security or Bank
Guarantee has been extended to Chaitra, 2078 end.

CUSTOMS DUTY The major changes brought forward by finance ordinance 2078/79 relating to Customs
Import Duty (% except Import Duty (% except
Heading Sub-Heading Description of Article Unit otherwise specified) otherwise specified) for
for FY 2078-79 FY 2077-78
Milk and cream, concentrated nor containing added sugar or other sweetening
04.02
matter.
In powder, granules or other solid forms, of a fat content, by weight, not
exceeding 1.5%
0402.10.20 -Edible to children as milk food kg 20 40
In powder, granules or other solid forms, of a fat content, by weight, exceeding
1.5%:
0402.29.10 -Edible to children as milk food kg 20 40
18.06 Chocolate and other food preparations containing cocoa.
1806.10.00 -Cocoa powder, containing added sugar or other sweetening matter kg 40 30
-Other preparations in blocks, slabs or bars weighing more than 2 kg or in liquid,
1806.20.00 paste, powder, granular or other bulk form in containers or immediate packings, kg 40 30
of a content exceeding 2 kg
-Other, in blocks, slabs or bars:
1806.31.00 --Filled kg 40 30
1806.32.00 --Not Filled kg 40 30
-Other
---Preparations of Heading 19.04 containing more than 6% by weight of cocoa
1806.90.10 calculated on totally defatted basis or completely coated with chocolate on the kg 40 30
outside even if it does not contain 6% by weight of cocoa.
1806.90.90 ---Other kg 40 30
Prepared binders for foundry moulds or cores; chemical products and
38.24 preparations of the chemical or allied industries (including those consisting of
mixtures of natural products), not elsewhere specified or included.
3824.99.20 Solid or liquid dialysis concentrate used in the treatment of kidney patient Kg 1 -
39.21 Other plates, sheets, film, foil and strip, of plastics.
---Other
3921-90-92 ----Sunmica and Formica decorative laminate sheet Kg 20 -

for FY 2078-79 FY 2077-78
Retreaded or used pneumatic tyres of rubber; solid or cushion tyres, tyre treads
40.12
and tyre flaps, of rubber.
4012.20.00 -Used pneumatic tyres kg 10 20
51.08 Yarn of fine animal hair (carded or combed), not put up for retail sale.
-Carded
5108.10.20 ---Blended protein fiber yarn kg 1 -
-Combed
5108.20.20 ---Blended protein fiber yarn Kg 1 -
Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and
62.12
parts thereof, whether or not knitted or crocheted.
-Other
6212.90.10 ---Articles such as abdominal belts, knee caps, anklets, wristbands, waistband Nos 5 20
68.08 Panels, boards, tiles, blocks and similar articles of vegetable fiber, of straw or of
shavings, chips, particles, sawdust or other waste, of wood, agglomerated with
cement, plaster or other mineral binders.
6808.00.10 ---Boards or panels of various thickness made of mixtures of saw dust, cement, 20 10
m2/kg
and different chemical binders
6808.00.90 ---Other m2/kg 20 15
68.10 Articles of cement, of concrete or of artificial stone, whether or not reinforced.
-Tiles, flagstones, bricks and similar articles:
--Other
6810.19.10 Unfired modified clay Nos/kg 30 15
Air or vacuum pumps, air or other gas compressors and fans; ventilating or
84.14 recycling
hoods incorporating a fan, whether or not fitted with filters.
--Table, floor, wall, window, ceiling or roof fans, with a self- contained electric
8414.51.00 Nos 10 15
motor of an output not exceeding 125 Watts
8414.59.00 --Other Nos 10 15
8414.90.00 -Parts Nos/kg 10 15

for FY 2078-79 FY 2077-78
Refrigerators, freezers and other refrigerating or freezing equipment, electric or
84.18
other; heat pumps other than air conditioning machines of Heading 84.15
8418.10.00 -Combined refrigerator-freezers, fitted with separate external doors Nos 15 20
-Refrigerators, household type:
8418.21.00 --Compression-type Nos 15 20
8418.29.00 --Other Nos 15 20
8418.30.00 -Freezers of the chest type, not exceeding 800 l capacity Nos 15 20
8418.40.00 -Freezers of the upright type, not exceeding 900 l capacity Nos 15 20
-Other furniture (chests, cabinets, display counters, show-cases and the like) for
8418.50.00 Nos 15 20
storage and display, incorporating refrigerating or freezing equipment.
Dish washing machines; machinery for cleaning or drying bottles or other
containers; machinery for filling, closing, sealing, or labelling bottles, cans, boxes,
84.22 bags or other containers; machinery for capsuling bottles, jars, tubes and similar
containers; other packing or wrapping machinery (including heat shrink wrapping
machinery); machinery for aerating beverages.
-Dish washing machines:
8422.11.00 --Of the household type Nos 20 30
Household or laundry-type washing machines, including machines which both
84.50
wash and dry.
-Machines, each of a dry linen capacity not exceeding 10 kg: Nos
8450.11.00 --Fully-automatic machines Nos 20 30
8450.12.00 --Other machines, with built-in centrifugal drier Nos 20 30
8450.19.00 --Other Nos 20 30
8450.20.00 -Machines, each of a dry linen capacity exceeding 10 kg. Nos 20 30
Other office machines (for example, hectograph or stencil duplicating machines,
addressing machines, automatic banknote dispensers, coin-sorting machines, coin
84.72
counting or wrapping machines, pencil-sharpening machines, perforating or
stapling machines).
-Other

for FY 2078-79 FY 2077-78
---Automatic Teller Machine Free -
---Automatic Bank Note Dispenser Free -
---Perforating machine Free -
---Stapling machine Free -
Machines and mechanical appliances having individual functions, not specified or
84.79
included else wherein this Chapter.
---Other
----Air humidifier and dehumidifier Free -
Taps, cocks, valves and similar appliances for pipes, boiler shells, tanks, vats or
84.81 the like, including pressure-reducing valves and thermostatically controlled
valves.
-Other appliances
8481.80.20 -Oxygen cylinder valve Nos/kg 10 20
85.04 Electrical transformers, static converters (for example, rectifiers) and inductors.
-Static converters:
8504.40.20 ---Mobile Phone Charger Nos 15 -
Electro-mechanical domestic appliances, with self-contained electric motor, other
85.09
than vacuum cleaners of heading 85.08.
8509.40.00 -Food grinders and mixers; fruit or vegetable juice extractors Nos 10 15
8509.80.00 -Other appliances Nos 10 15
8509.90.00 -Parts Nos/kg 10 15
Industrial or laboratory electric furnaces and ovens (including those functioning
85.14 by induction or dielectric loss); other industrial or laboratory equipment for the
heat treatment of materials by induction or dielectric loss.
-Other furnaces and ovens
8514.30.10 ---Cremation machine Free -
8514.30.90 ---Other Free -

for FY 2078-79 FY 2077-78
Electric instantaneous or storage water heaters and immersion heaters; electric
space heating apparatus and soil heating apparatus; electro-thermic
hairdressing apparatus (for example, hair dryers, hair curlers, curling tong
85.16
heaters) and hand dryers; electric smoothing irons; other electro-thermic
appliances of a kind used for domestic purposes; electric heating resistors, other
than those of Heading 85.45.
8516.10.00 -Electric instantaneous or storage water heaters and immersion heaters Nos 10 15
-Electric space heating apparatus and electric soil heating apparatus:
8516.21.00 --Storage heating radiators Nos 10 15
8516.29.00 --Other Nos 10 15
-Electro-thermic hair-dressing or hand drying apparatus:
8516.31.00 --Hair dryers Nos 10 15
8516.32.00 --Other hair-dressing apparatus Nos 10 15
8516.33.00 --Hand-drying apparatus Nos 10 15
8516.40.00 -Electric smoothing irons Nos 10 15
8516.50.00 -Microwave oven Nos 10 15
-Other ovens; cookers, cooking plates, boiling rings, grillers and roasters:
8516.60.11 ---Induction stove Nos 1 5
8516.60.12 ---Infrared stove Nos 1 -
8516.60.19 ---Other Nos 5 -
8516.60.20 ---Rice cooker Nos 10 15
8516.60.30 ---Water heating utensils such as kettle, jug Nos 10 15
8516.60.90 ---Other Nos 10 15
Other electro-thermic appliances:
8516.71.00 --Coffee or tea makers Nos 10 15
8516.72.00 --Toasters Nos 10 15
---Other
8516.79.10 ---Insect traps Nos 10 15
8516.79.90 ---Other Nos 10 15
8516.80.00 -Electric heating resistors Nos 10 15

for FY 2078-79 FY 2077-78
87.02 Motor vehicles for the transport of ten or more persons, including the driver.
---Jeep, Car and Van :
8702.40.41 ----Unassembled Nos 10 30
8702.40.49 ----Other Nos 10 30
Motor cars and other motor vehicles principally designed for the transports of persons (other than those of Heading 87.02), including station
87.03
wagons and racing cars.
-Other vehicles, with only electric motor for propulsion:
---Three Wheelers:
8703.80.11 ----Unassembled Nos 10 30
8703.80.19 ----Other Nos 10 30
---Car, Jeep, Van with motor’s peak power up to 50 kw:
8703.80.21 ---Unassembled Nos 10 80
8703.80.29 ----Other Nos 10 80
--- Car, Jeep, Van with motor’s peak power exceeding 150 kw but not
exceeding 200kw:
8703.80.51 ----Unassembled Nos 15 80
8703.80.59 ----Other Nos 15 80
--- Car, Jeep, Van with motor’s peak power exceeding 200 kw but not
exceeding 300kw:
8703.80.61 ----Unassembled Nos 30 80
8703.80.69 ----Other Nos 30 80
--- Car, Jeep, Van with motor’s peak power exceeding 300 kw
8703.80.71 ----Unassembled Nos 40 80
8703.80.79 ----Other Nos 40 80
---Other
8703.80.91 ----Unassembled Nos 40 80
8703.80.99 ----Other Nos 40 80
87.04 Motor vehicles for the transport of goods.
-Other, with compression-ignition internal combustion piston engine (diesel or
semi-diesel):

for FY 2078-79 FY 2077-78
8704.21.50 Refrigerating system installed Nos 1 -
--g.v.w. exceeding 5 tonnes:
8704.22.96 Refrigerating system installed Nos 1 -
-Other
8704.90.20 ---Three-wheeler vehicles, with only electric motor for propulsion Nos 10 30
8704.90.30 --- Four-wheeler vehicles with only electric motor for propulsion Nos 10 30
8704.90.40 --- Other vehicles with only electric motor for propulsion Nos 10 -
87.15 Baby carriages and parts thereof
8715.00.10 -Stroller Nos/kg 5 -
8715.00.20 -Children’s other vehicles Nos/kg 5 -
8715.00.90 -Its other parts Nos/kg 5 -
Mechano-therapy appliances; massage apparatus; psychological aptitude-
90.19 testing apparatus; ozone therapy, oxygen therapy, aerosol therapy, artificial
respiration or other therapeutic respiration apparatus
-Ozone therapy, oxygen therapy, aerosol therapy, artificial respiration or other
therapeutic respiration apparatus
9019.20.10 --Oxygen concentrator Nos/kg 5 -
9019.20.20 --Oxygen masks, venturi masks, ventilator masks, reservoir masks Nos/kg 5 -
9019.20.30 --Medical ventilators Nos/kg 5 -
9019.20.40 --Oxygen humidifier used in oxygen therapy Nos/kg 1 -
9019.20.50 Oxygen tent, oxygen headbox or any other oxygen distribution equipment Nos/kg 5 -
9019.20.90 ---Other Nos/kg 5 -
Medical, surgical, dental or veterinary furniture (for example, operating tables,
examination tables, hospital beds with mechanical fittings, dentists‘ chairs);
94.02
barbers' chairs and similar chairs, having rotating as well as both reclining and
elevating movements; parts of the foregoing articles.
-Other
9402.90.10 --ICU Bed Nos/kg 5 -
9402.90.20 --Other Beds used in hospital Nos/kg 5 -
9402.90.90 --Other related parts Nos 5 -

Export Duty (% except Export Duty (% except
for FY 2078-79 FY 2077-78
39.15 Waste, parings and scrap, of plastics.
3915.10.00 -Of polymers of ethylene Per kg 5 2
3915.20.00 -Of polymers of styrene Per kg 5 2
3915.30.00 -Of polymers of vinyl chloride Per kg 5 2
3915.90.00 -Of other plastics Per kg 5 2
47.07 Recovered (waste and scrap) paper or paperboard.
4707.10.00 -Unbleached kraft paper or paperboard or corrugated paper or paperboard Per kg 10 5
-Other paper or paperboard made mainly of bleached chemical pulp, not
4707.20.00 Per kg 10 5
colored in the mass
-Paper or paperboard made mainly of mechanical pulp (for example,
4707.30.00 Per kg 10 5
newspapers, journals and similar printed matter)
4707.90.00 -Other, including unsorted waste and scrap Per kg 10 5
72.04 Ferrous waste and scrap; remelting scrap ingots of iron or steel.
7204.10.00 -Waste and scrap of cast iron Per kg 10 5
-Waste and scrap of alloy steel:
7204.21.00 --Of stainless steel Per kg 10 5
7204.29.00 --Other Per kg 10 5
7204.30.00 -Waste and scrap of tinned iron or steel Per kg 10 5
-Other waste and scrap:
--Turnings, shavings, chips, milling waste, sawdust, filings, trimmings and
7204.41.00 Per kg 10 5
stampings, whether or not in bundles
7204.49.00 --Other Per kg 10 5
7204.50.00 Remelting scrap ingots Per kg 10 5
74.04 7404.00.00 Copper waste and scrap. Per kg 5 10
76.02 7602.00.00 Aluminum waste and scrap Per kg 5 10
79.02 7902.00.00 Zinc waste and scrap. Per kg 5 10
80.03 8003.00.00 Tin bars, rods, profiles and wire. Per kg 5 10
Waste and scrape of primary cell, battery and electronic equipment; spent
85.48 8548.10.00 primary cell, battery and electronic equipment and other specified and non- Per kg 10 -
specified electronic parts of machinery and apparatus.

Disclaimer: NBSM Consulting Private Limited
The information contained in this document is Four Square Complex, Block C & D
compiled by NBSM and is exclusively for the Narayan Chaur, Naxal, Kathmandu, Nepal
information of its clients and staffs. However the T : 977-1-4433069 | 4415242
detail study and professional advise is E : [email protected]
recommended to be taken from the experts W: www,nbsm.com.np
before taking any decisions on the matters
contained herein. We shall not be anyway
responsible for any kind of loss suffered. Member of Moore Global Network

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NEPAL BUDGET

03-05 BUDGET OBJECTIVES

06-07 BUDGET SUMMARY

08-09 TAXATION GENERAL

10-13 TAX AMNESTY SCHEME

14-35 INCOME TAX

36-43 VALUE ADDED TAX

44-58 EXCISE DUTY

59-68 CUSTOMS DUTY

PROSPEROUS NEPAL, HAPPY NEPALESE

Optimum utilization of resources, opportunity

Strengthen the Public Welfare Role of

Development of Production oriented Economy by

Extension of testing, Assurance of job Agricultural Construction of Ending all types

Capital Expenditure 374.26 22.7% Foreign Grant 63.37

Financial Management 207.97 12.6% Foreign Debt 309.29

Current Expenditure 250.00

CapitalExpenditure 678.62 Foreign Grant

Total Budget (in Billions NPR) Economic Growth & Inflation

Growth Rate Inflation Rate *2077-78 Estimate **2078-79 Projection

2072-73 2073-74 2074-75 2075-76 2076-77 2077-78 2078-79

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 7

Infrastructure Development Tax

To General Casino 40 Million Per annum

50% of the Additional fee and annual additional fee of the FY

• The cinema house and halls have to issue tickets

• Telecommunication Service Charge to be levied at 13%

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 9

2. Waiver of Dues under Assessment or Re-assessment.

3. Waiver of Dues to Non-Profit Community Hospital or Health

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 11

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 12

• CSR Expenses used in Medical Sector allowed as deduction:

• Special provision related to transfer of contribution to the

• Special Reliefs on renewal of Private firms and Companies:

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 13

CORONA 90% Tax Relief to the

50% Tax exemption in income

50% Tax exemption in income

SLAB RATE NO CHANGE

Definition of Non-Business Chargeable Assets:

Non-Business Chargeable Assets means land, building, interest in

2. Private Building of a natural person in the following conditions:

Clarification: For the purpose of this clause, ‘private building’

Definition of Non-Business Chargeable Assets:

Non-Business Chargeable Assets means land, building, interest in any

2. Private Building of a natural person in the following conditions:

Clarification: For the purpose of this clause, ‘private building’ means

Definition of Service Fee

Definition of Service Fee

Service Fee & Commission Distinguished.

Relief of Tax Payers on Litigation in Revenue Tribunal:

In calculating deposit or bank guarantee pursuant to

The Tax Rate for Institutional Agricultural Farm will be 50%

For Resident Person

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 18

NBSM | Nepal Budget Highlights | 2078/79 (2021-22) Page 19

Section Amended Provision Existing Provision

Income Earned by the Education Institute operated as Not