Budget

Nepal Budget 2016/17
Highlights
Nepal Budget for Fiscal Year 2016/17
Amendment Highlights

Table of Contents
BUDGET HIGHLIGHTS......................................................................................................................3
HIGHLIGHTS OF AMENDMENTS IN TAX LAWS...................................................................8
Amendment Highlights...................................................................................................................9
Value Added Tax (VAT) Act 2052..............................................................................................10
Schedule - 1: Additional List of VAT Exempt Goods and Services...........................13
Schedule - 2: Additional List of Goods and Services subject to Zero rate............14
Excise Duty Act 2058.....................................................................................................................15
Changes in Excise Rate.............................................................................................................18
Income Tax Act 2058.....................................................................................................................23
Income Tax Rates - Schedule I...............................................................................................27
Customs Act 2064...........................................................................................................................29
Increase in Custom Tariff........................................................................................................31
Decrease in Custom Tariff.......................................................................................................33
Change in Valuation Method..................................................................................................42
2


BUDGET HIGHLIGHTS
3


Budget Highlights
On Saturday, 28th of July 2016, budget for the Fiscal Year 2016/17 was presented:
Below is the Source of Finance and Allocation of Budget presented:
Sources of Finance
Amount in Billion
59.41
111.00
Revenue Mobilization
195.72 Principal Repayment

565.90 Foreign Grants
Foreign Loan
106.90 Domestic Borrowing
Current Year Cash Balance
10.00
Allocation of Budget Objectives

Amount in Billion
To implement the Constitution,
To revive the economy affected by the
earthquake and the supply system
119.81
disruption,
To attain high economic growth through
311.95 increasing productivity and production,
617.16 To promote domestic and external
investment,
To expand economic activities, increase
income and employment and reduce
poverty,
To create opportunities, capacity building
and social protection,
Current Expenditure Capital Expenditure To provide quality social service to all
Financing Nepali people.
4


Priority Areas
Post-earthquake reconstruction, rehabilitation and new construction
Hydro power generation, transmission line expansion and distribution
Road, airport, irrigation
Agriculture, industry, tourism, forest
Urban and local infrastructure
Education, health, drinking water, sanitation
Social security
Service delivery, corruption control and governance reform
Hydropower for Economic Prosperity

Projects on hydropower generation, transmission and distribution will be
implemented with a clear roadmap for reducing load shedding substantially within
next year, ending load shedding completely within two years, becoming self-reliant
in electricity within three years during monsoon and exporting hydropower within
ten years.
A strategy will be adopted to ascertain the capacity of Nepal's potential hydropower

by conducting general survey, commending hydropower generation by fixing time
frame and constructing the transmission lines through focusing on hydropower
generation
Chameliya and Kulekhani Third Projects, Upper Tamakoshi and Upper Trishuli 3A
Projects and Rasuwagadhi Project will be connected to the national grid by
completing them within one year, two years and three years, respectively
Initiation will be taken to develop Karnali Chisapani Multipurpose Project with the
capacity of more than 10,000 MW as a tripartite friendship project of the friendly
nations India, China and Nepal.
Energy audit system will be introduced in order to improve the energy efficiency
among the large hydro clients. Technical audit will be conducted in respect of
completed hydropower projects.
Financial Sector Reform

Nepal Rastra Bank Act Amendment Bill, Bank and Financial Institution related
Bill, Deposit and Credit Guarantee Bill, Employees Provident Fund Act
Amendment Bill and Banking Crime Act Amendment Bill, which are under
consideration in the Legislature-Parliament will be passed and implemented.
Amendment Bills of Foreign Exchange Regulation Act and Citizen Investment
5


Fund Act, Insurance Bill and Commodity Market Related Bills will be submitted in
the Legislature-Parliament in the next Fiscal Year.
Infrastructure Development Bank will be established with public private

partnership to increase the investment in infrastructure sector.
Bank and Financial Institutions will be encouraged to expand their services in rural
sector.
Mobile Banking and Branchless banks will be promoted.
Production based companies will be encouraged to be listed in the stock market.

15 percent tax rebate on their income for the industries and businesses established
under public companies and Companies listed in the stock market
Insurance companies will be encouraged to expand the access in rural sector. A

provision will be made to insure government property, cultural and archeological
heritages. A provision will be made to insure private houses.
A compulsory provision has been made to the insurance companies to dedicate

minimum 5 percent of their insurance services to micro insurance.
Under the vehicle insurance, a similar provision of third party insurance will be
made to insure the passengers travelling in public vehicles.
The concessional loan provided by Rural Self Reliance Fund, Poverty Alleviation
Fund and Youth and Small Business Self Employment Fund will be continued. The
implementation of concessional agriculture loan program focused on youth and
small Business will be made mandatory to the bank and financial institutions.
Financial literacy program will effectively be expedited
Tax System Reform for Economic Prosperity

Single Tax Code Bill will be tabled in Legislature-Parliament to simplify and update
the tax law and procedure.
Additional three hundred thousand taxpayers will be brought into tax net by
allotting Permanent Account Number to all income earner and businessmen
6


The provision of building database by receiving income tax return from those
having income above Rs. 4 million will be implemented with high priority
Tripartite agreement among producer, authorized dealer, and authorized

purchaser will be made a basis for custom clearance of vehicles.
Control of Tax Evasion for Fairness and Neutrality of Tax System

The financial statement and tax amount will be used as a reference for credit
mobilization through bank and financial institutions for fair business.
Special unit will be established in Inland Revenue Department to control tax

planning and tax evasion for the protection of tax base.
Federal Reserve Fund

Revenue which falls under the right of State Governments as per Schedule- 6 of the
Constitution of Nepal will be deposited into Federal Reserve Fund until State
Reserve Fund is operated.
Such amount shall be transferred to State Reserve Fund after operation of such
fund.
7


HIGHLIGHTS OF AMENDMENTS IN TAX LAWS
Value Excise
Added Tax Duty
(VAT)
Income Custom
Tax Duty
8


Infrastructure Tax
Infrastructure Tax shall be charged on import of Aviation fuel, petrol and diesel in Nepal
at custom point at the rate Rs 5 per liter.
Royalty on Casino Operations:

Existing Provision Revised Provision
Person and entity running casino Person and entity running casino
operations in Nepal in FY 2073/74 shall operations in Nepal in FY 2073/74 shall
pay annual royalty of Rs. 30 Million. pay annual royalty of Rs. 30 Million.
However, Rs. 20 million shall be the However, Rs. 7.5 million shall be the
royalty amount if casino operations are royalty amount if casino operations are
operated through modern machines and operated through modern machines and
equipment. equipment.
New Provision: Exemption on Demurrage Charges:

Provision of not including the expenses paid in foreign country during the period of
Bhadra 2072 to Falgun 2072 for detention, demurrage and parking fees the into custom
valuation is introduced. In addition to it, such expenses are allowed as deduction for the
Income Tax purpose.
Exemption on Income derived by certain Co0perative Societies:

1. Income tax for the FY 2071/72, as per Income Tax Act 2058, on Savings and Credit Co-
Operative Society operating in areas declared as municipality during FY 2071/72 shall
be exempt.
2. If such Savings and Credit Co-operative Society has already paid income tax during FY
2071/72, same shall be allowed to set off from income tax liability for FY 2072/73.
Audit of Books of Accounts:

An arrangement has been made so as not to require audit for small and medium taxpayers
having annual transaction of up to Rs. 10 million. Provision of self-certification of income
tax return by such taxpayers shall be sufficient.
9


Value Added Tax (VAT) Act 2052
Definitions
Sections Existing Provision Revised Provision
Section 2(m)- "Registered Person" means the "Registered Person" means the
person pursuant to section 10 person pursuant to section 10,
Registered and 10(a) to carry out the 10(a), 10(b) to carry out the
Person transaction transaction
Section 2(n)- "Registration Number" means "Registration Number" means

the number provided to the the number provided to the
Registration registered person pursuant to registered person pursuant to
Number section 10 and 10(a) section 10, 10(Ka) and 10(b)
Provision in Registration of Joint Venture (JV)

Section 10(b)- Two or more persons Two or more persons working
working together in joint together in joint venture for specific
Special provision venture for specific period period and prescribed work shall
for Registration and prescribed work shall have temporary registration which
of Joint Venture have temporary registration shall be cancelled after the expiry of
which shall be cancelled the term prescribed. Additionally,
after the expiry of the term in case of JV, co-ventures shall
prescribed. be jointly and severally liable
to pay income tax.
Cancellation of Registration
Section 11- The Tax Officer may cancel the The Tax Officer may cancel the
registration of a registered person registration of a registered person
Cancellation in any of the following in any of the following
of circumstances: circumstances:
Registration
10


1. In the case of a body corporate, 1. In the case of a body
if the body corporate is closed corporate, if the body
down, sold or transferred or if corporate is closed down, sold
the incorporated body or transferred or if the
otherwise ceases to exist; incorporated body otherwise
ceases to exist;
2. In the case of an individual
ownership, if the owner dies; 2. In the case of an individual
ownership, if the owner dies;
3. In the case of a partnership
firm, if it is dissolved or death of 3. In the case of a partnership
Partner; firm, if it is dissolved or death
of Partner;
4. If a registered person ceases to
be engaged in taxable 4. If a registered person ceases to
transactions; be engaged in taxable
transactions;
5. If a person is registered in error;
5. If a person is registered in
6. If registered person file zero error;
return for 12 months.
6. If registered person file zero
return for 12 months;
7. If total taxable
transaction of 12 months
is less than 50 lakhs for
goods and 20 lakhs for
goods and services.
VAT Refund
Section 25C VAT paid on purchases against re- VAT paid on purchases against
export of goods where payment is re-export of goods where
VAT Refund received in advance is to be payment is received in advance is
refunded to taxpayer to be refunded to taxpayer.
However, no refund
facilities under this section
will be applicable in case of
export or re-export of goods
in respect of which VAT
refund facilities has
already been availed under
Schedule -1.
11


Other Areas Covered by Budget Speech
1. Exemption for Small Vendor
Section 9 read with The person who is dealing The person who is dealing in
Rule 6 in taxable service; taxable taxable service; taxable goods
goods and services with a and services with a turnover
Exemption for Small turnover not exceeding 1 not exceeding 2 million
Vendor million rupees is not rupees is not required to
required to register under register under VAT.
VAT.
2. Display of Sales Price

Mandatory provision has been made to display the price of goods and services
including Value Added Tax in the sales places along with exhibition hall of industrial
establishments, sales counter, shop, hotel and restaurant and bar.
3. VAT Return
Press and electronic publication and transmission center will be allowed to file Value
Added Tax returns on trimester basis.
4. Invoice
Provision of electronic billing will be made mandatory for departmental stores and
taxpayers linked with business chain.
5. VAT Exemption
Value Added Tax on the insurance premium of bird farming, fishery, horticulture
and bee keeping is exempted to improve the contribution of agriculture to the
economy.
12


Schedule - 1: Additional List of VAT Exempt Goods and Services
Group- 5: Medicine, Medical Care, and Similar Health Services

Sub- Particulars
Headings
9018.90.00 Hemodialysis Machine
Dialysis Reprocessor
Dialyzer and its Tubing
9402.90.00 Dialysis Bed and Chairs
9018.12.00 Echocardiograph used in Heart Examination and Check Up
9018.90.00 Videoscopes
Cath Lab
Heart-Lung Machine
Defibrillator
9022.12.00 Positron Emission Tomography; Stomach Scan Machine; Computed
Tomography (C.T); Scan Machine; Mammography used in Cancer
Examination
9022.21.00 Brachytherapy and linear accelerator
9018.19.00 Flowsytometer
Next-Generation Sequencer
Protein Microyery Platform and Multiplex Real Time P.C R; Hematology
Analyzer; Blood Chemistry Analyzer; Clinical Chemistry Analyzer and
Immunochemistry Analyzer
9018.13.00 Magnetic Resonance Imaging (M.R.I) Machine
Sub-
Particulars
Headings
87.14 Import of Parts and Supporting Accessories used in production of
Electronic Rickshaw by the industry established with the purpose of
manufacturing Electronic Rickshaws
Group- 11: Other Goods and Services

Sub-
Particulars
Headings
8413.70.90 Battery Powered DC Pump
Lithium Ion Battery less than 12 volts and 10 ampere used in Solar Light,
on recommendation of Alternative Energy Promotion Centre
Machines purchased by a battery re-processing industry used in battery
re-processing
Machines purchased by manufacturer of plastic bags used for re-cycling
such plastic bags into environment friendly bags like bags of cloth, jute
and paper.
13


Schedule - 2: Additional List of Goods and Services subject to
Zero rate
Sub- Particulars
Headings
8507.20.00 Deep Cycle Lead-Acid Battery used in SAFA Tempo, on recommendation
of Government of Nepal, Ministry of Population and Environment
14


Excise Duty Act 2058
Power to Suspend the License

Section Existing Provision Revised Provision
Sec 9A If an application is received for If an application is received for
suspension of the licensee, the suspension of the licensee, the
Power to Excise Duty Officer shall make Excise Duty Officer shall make
Suspend decision to suspend or not to decision to suspend or not to
License suspend the license of that licensee, suspend the license of that licensee,
and if it appears necessary to and if it appears necessary to
suspend the license, suspend it and suspend the license, suspend it and
give information thereof to the give information thereof to the
licensee within Thirty days after licensee within Fifteen days after
the receipt of the application. the receipt of the application.
Sec 9A (5): Power to Suspend License-Additional Provision

If licensee, whose license was voluntarily suspended, wants to continue transactions of
goods or services subject to excise duty, the licensee shall make an application to excise
duty officer and excise duty officer shall give permission to carry on transaction of
excisable goods or services.
Power to cancel the License

Sec 10 The Department may cancel the The Department may cancel the
license issued in the following license issued in the following
Power to circumstances: - circumstances: -
Cancel
License 1. In cases where the terms and 1. In cases where the terms and
conditions specified in the conditions specified in the
license are found to have been license are found to have been
violated; violated;
2. In cases where it appears to be 2. In cases where it appears to be
contrary to public interest.; contrary to public interest.;
3. In cases leviable excise duty not 3. In cases leviable excise duty not
paid; paid;
15


4. In cases entity is dissolved or 4. In cases entity is dissolved or
licensee applies for cancelation licensee applies for cancelation
of license. of license;
5. In cases, licensee does not
renew the license.
Power to Search, Seize or Arrest

Sec 12(3) In cases where any offense under In cases where any offense under
(c) this Act is being committed in any this Act is being committed in any
enterprise, house, land, motor enterprise, house, land, motor
Power to vehicle or place, and the Excise Duty vehicle or place, and the Excise
Search, Officer finds a possibility that the Duty Officer finds a possibility that
Seize or offender may escape or the proof the offender may escape or the
Arrest and evidence of the offense may proof and evidence of the offense
disappear if no action is taken may disappear if no action is taken
immediately, the Excise Duty Officer immediately, the Excise Duty
or employee designated by him/her Officer or employee designated by
may, by executing a memorandum him/her may, by executing a
thereof, personally carry out or memorandum thereof, personally
cause any of his/her subordinate carry out or cause any of his/her
employee to carry out the following subordinate employee to carry out
act at any time: the following act at any time:
to seize the product subject to to seize the product subject

excise duty related with the to excise duty related with
offense, and such other goods the offense, and such other
and documents as may be goods and documents as
ancillary to prove the offense, may be ancillary to prove the
offense and seal such
place.
Reward
Sec 14 A government employee or any other A government employee or any other
person who gives information or clue person who gives information or clue
Reward about any act which is about to be or about any act which is about to be or
being or has been committed contrary being or has been committed
to this Act shall, after final settlement contrary to this Act shall, after final
of the case, be awarded by the settlement of the case, be awarded by
concerned Excise Duty Office a the concerned Excise Duty Office a
reward in a sum to be set as follows of reward in a sum to be set as follows
the proceeds recovered from the of the proceeds recovered
16


claimed amount of the product except on account of excise duty
subject to excise duty seized of the product seized from the
from the accused: accused:
Ten per cent of the amount in Ten per cent of the amount in
controversy to the informer; controversy to the informer;
Twenty per cent of the amount in Twenty per cent of the amount in
controversy to one who controversy to one who
seizes and hands over a product seizes and hands over a product
only; only;
Thirty per cent of the amount in Thirty per cent of the amount in
controversy to one who controversy to one who
arrests and hands over the arrests and hands over the
person, along with the proof. person, along with the proof.
Other Area Covered by Budget Speech

Excise Sticker currently imposed in carton of beer shall be imposed in each bottle
of beer for protection of Revenue.
17


Changes in Excise Rate
Heading/Sub Description of Product/Goods or Existing Rate Revised Rate

heading Service of Excise Duty of Excise
Duty
2106.90.00 Food preparations not elsewhere specified or included-others
2106.90.20 Pan Masala without tobacco Rs. 375 per kg Rs. 420 per
kg
2106.90.70 Scented nut shell without tobacco Rs. 138 per kg Rs. 155 per kg
2202 Waters, including mineral waters and aerated waters, containing
added sugar or other sweetening matter or flavored, and other non-
alcoholic beverages, not including fruit or vegetable juice of heading
20.09
2202.90.00 Others Rs. 6.50 per Rs. 7 per liter
liter
2203.00.00 Beer made from malt Rs. 98 per Rs 106 per
liter liter
2204 Wine of Fresh Grapes including
fortified wines; grapes must other
than that of heading 2009
2204.10.00 Sparkling Wine
2204.10.10 Wine containing not more than Rs. 250 per Rs. 280 per
12% alcohol (on import) liter liter
2204.10.20 Wine containing 12% to 17% Rs. 250 per Rs. 280 per
alcohol liter liter
2204.10.30 Wine containing more than 17% Rs. 290 per Rs. 325 per
alcohol liter liter
2204.21.00 In container holding 2ltr or less
alcohol liter liter
alcohol liter liter
2204.29.00 Others
alcohol liter liter
alcohol liter liter
2204.29.40 Domestic wine containing not Rs. 66 per Rs. 74 per
more than 12% alcohol liter liter
Other grape must
18


alcohol liter liter
alcohol liter liter
2205 Vermouth and other wine of fresh grapes flavored with plants or
aromatic substance
2205.10.00 In container containing 2 liter or
less
alcohol liter liter
alcohol liter liter
2205.90.00 Others
alcohol liter liter
alcohol liter liter
2206.00.00 Other fermented beverages, mixture of fermented beverages and
mixture of fermented beverages and nonalcoholic beverages, not
elsewhere specified or included
2206.00.10 Country Beer Rs. 20 per Rs.22 per liter
liter
2206.00.20 Champaign, Perry, Mead, foreign Rs. 290 per Rs 313 per
cider liter liter
2206.00.30 Domestic Cider Rs. 100 per Rs. 108 per
liter liter
2206.00.40 Mixtures of fermented beverages Rs. 290 per Rs. 325 per
containing more than 17% alcohol liter liter
2206.00.90 Others Rs. 290 per Rs. 325 per
liter liter
2208.20.90 Spirits obtained by distilling grape wine or rape marc-others
2208.20.90.10 Liquor with 15 UP capacity Rs. 793 per Rs. 912 per
containing 48.5% alcohol liter, Rs 933 liter, Rs 1073
per LP liter per LP liter
19


2208.30.90 Whiskies- Others
2208.40.90 Rum and sprit extracted after fermentation of sugarcane products-
Other
2208.50.90 Gin and Geneva- others
2208.60.90 Vodka- others
2208.70.90 Liqueurs and cordials-others
20


2208.90.00 Other
24.01 Unmanufactured tobacco; tobacco refuse
2401.10.00 Tobacco, not stemmed/stripped Rs. 60 per kg Rs. 67 per kg
2401.20.00 Tobacco, partly or wholly Rs. 60 per kg Rs. 67 per kg
steamed/stripped
2401.30.00 Tobacco refuse Rs. 60 per kg Rs. 67 per kg
24.02 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco
substitutes
2402.10.00 Cigars, cheroots and cigarillos, Rs. 11 per Rs. 12 per
containing tobacco stick stick
2402.20.00 Cigarettes containing tobacco
2402.20.10 Not Filtered Rs. 320 per M Rs. 346 per M
Filtered
2402.20.21 Filtered up to 70 m.m. Rs. 723 per M Rs. 795 per M
2402.20.22 Filtered 70 m.m. to 75 m.m Rs. 931 per M Rs. 1024 per
M
2402.20.23 Filtered 76 m.m. to 85 m.m Rs. 1193 per Rs. 1336 per
M M
21


2402.20.24 Filtered more than 85 m.m Rs. 1624 per Rs. 1868 per
M M
2402.90.00 Others
2402.90.10 Bidi Rs. 75 per M Rs. 84 per M
2402.90.20 All types of Cigar Rs. 11 per Rs. 12 per
stick stick
24.03 Other manufactured tobacco and manufactured tobacco
substitutes; homogenized or reconstituted tobacco; tobacco
extracts and Essences-Others
2403.19.10 Pipe Tobacco Rs. 900 per Rs. 1008 per
kg kg
2403.91.00 Homogenized or reconstituted Rs. 205 per kg Rs. 230 per
tobacco kg
2403.99.10 Jarda, Khaini, Snuff, Ghutka and Rs. 375 per kg Rs. 420 per
similar preparations containing kg
chewing tobacco
2403.99.20 Packed chewing tobacco, to be Rs. 205 per kg Rs. 230 per
mixed in lime, put up for retail sale kg
2403.99.23 Cut tobacco, dust tobacco not for Rs. 205 per kg Rs. 230 per
retail sale kg
8528.72.00 Reception apparatus for television, whether or not incorporating
radio-broadcast receivers or sound or video recording or
reproducing apparatus; Other, color:
8528.72.10 Of unassembled condition 5% 10%
8528.72.90 Other-television 5% 10%
8529.10.90 Parts suitable for use solely or
principally with the apparatus of
headings 85.25 to 85.28
8529.90.10 Of television receiver 15% 10%
22


Income Tax Act 2058
Computation of Taxable Income

Section 5 The taxable income of any person in The taxable income of any person in
any income year shall be equal to any income year shall be equal to the
Taxable the amount computed by subtracting amount computed by subtracting the
Income the amount, if any, claimed pursuant amount, if any, claimed pursuant to
to Section 12, 12Ka or 63 from the Section 12, 12a, 12b or 63 from the
grand total amount of assessable grand total amount of assessable
income of each of the following income of each of the following
income headings in that income income headings in that income year:
year: Business
Business Employment
Employment Investment
Investment
Business Exemptions and Concession

Section 11(3g) Tax rebate shall be granted by Tax rebate shall be granted by
Ten percent on the tax exempt Fifteen percent on the tax
on the manufacturing, tourism exempt on the manufacturing,
service, hydropower generation, tourism service, hydropower
distribution and distribution generation, distribution and
industries enlisted in the stock distribution industries enlisted in
exchange and the entities set the stock exchange and the entities
forth in Section 11(3c). set forth in Section 11(3c).

Section 11B In the case of hydro-power, In the case of hydro-power,
international airport, underground international airport,
ways, roadways, railways and underground ways, roadways,
similar infrastructure development railways and similar
projects of national importance and infrastructure development
projects of national importance
23


the production industry employing and the production industry
more than Three Hundred workers employing more than Three
and using more than Fifty percent Hundred workers and using more
domestic raw material (other than than Fifty percent domestic raw
cigarette, alcoholic beverage and material (other than cigarette,
beers), no source of income shall be alcoholic beverage and beers,
sought on the investment if it is bidi, cigar, khane surti, khaini,
made up to last day of Chaitra 2075 gutkha and pana masala), no
B.S." source of income shall be sought
on the investment if it is made up
to last day of Chaitra 2075 B.S."
Special Provision to Merger or Acquisition of Business

Section 47A (6) An entity (banking and financial An entity (banking and financial
institutions; insurance companies) institutions; insurance
that intends to be disposed upon companies) that intends to be
being merger with same nature of disposed upon being merger with
entity shall have to give a letter of same nature of entity shall have
intent to be merged to the Inland to give a letter of intent to be
Revenue Department no later than merged to the Inland Revenue
the last month of Asadh of the year Department no later than the last
2073. month of Asadh of the year 2075.

Section 47A (7) An entity (banking and financial An entity (banking and financial
institutions; insurance companies) institutions; insurance
that intends to be disposed upon companies) that intends to be
being merger with same nature of disposed upon being merger with
entity shall have to fulfill no later same nature of entity shall have
than the last month of Asadh to fulfill no later than the last
2074. month of Asadh 2076.
24


Provision of Final Withholding
Section 92(1)(a) The following payment shall be The following payment shall be
treated as payment from which tax treated as payment from which
is withheld finally: - tax is withheld finally: -
Dividend paid by a resident Dividend paid by a resident

company. company and partnership
company.
Penalty to accomplice
Section 127 Any person who intentionally aids Any person who intentionally
or abets or advises any other person aids or abets or advises any other
to commit any offense under this person to commit any offense or
Act shall be punished with half a certifies the false financial or
punishment imposed on the tax accounts or provides any
offender. wrongful consultancy services
shall be punished with half a
punishment imposed on the
offender.
Social Security Fund

1% Social Security Tax is levied on income
1% Social Security Tax is levied on income
of natural person in income of 2,50,000
of 350,000 and 4,00,000 for single
and 3,00,000 for single and couple
and couple respectively. Such Tax shall be
respectively. Such Tax shall be deposited
deposited into Social Security Fund.
into Social Security Fund.
Additional Provisions in Income Tax Act 2058

1. Sec 88(1)(7): Withholding Tax
In making the payment of services related with Satellite, Bandwidth, Optical Fiber,
equipment relating to telecommunications or electric transmission cable, any
resident person shall withhold tax at the rate of Ten Percent.
25


2. Sec 95 A (3): Additional Legal Provision
In the case of benefit from the disposal of interest of an entity not listed in the
Nepal Securities Board, Company Registrar shall record the updated data
only after receiving the payment of advance tax on amount of gain on
such disposal.
3. Sec 95 KA (6): Advance Tax Collection
In case any person other than natural person, disposes land and building, Land
Revenue Office shall collect advance tax on gain on such disposal at the rate of
Ten Percent (10%)
Exemption on Interest, Fees and Fines

Interest, Additional fees and Fines on delay deposit of following taxes and
submission of returns for the period Sharwan 2072 to Falgun 2072 are waived to
taxpayers only if they deposit the taxes and submit returns within Ashwin 2073:
Income Tax Return for FY 2071/72

Installment Tax Return for FY 2072/73
First Installment Tax of FY 2072/73
Withholding Tax Return
Value Added Tax(VAT) Amount and Return
Excise Duty and Excise Return
Health Tax
Education Tax
Cinema Development Charges and Return
26


Income Tax Rates - Schedule I
1. Clause 1: Taxable Income of a Natural Person

If Assessed as Single
Fiscal Year 2072/73 Fiscal Year 2073/74

Income slab Rate of tax Income slab Rate of tax
First Rs. 250,000 1% First Rs. 350,000 1%
Next Rs. 100,000 15% Next Rs. 100,000 15%
Above 350,000 25% Above 450,000 25%
If the taxable 40% additional tax If the taxable 40% additional tax
income is above Rs on the tax amount income is above on the tax amount
2,500,000 calculated under Rs 2,500,000 calculated under
25% slab above 25% slab above
(applicable only in (applicable only in
the income above the income above
2,500,000) 2,500,000)
Provision of 10% exemption is made to Provision of 10% exemption is made to
female employees. female employees.
If Assessed as Couple
Fiscal Year 2072/73 Fiscal Year 2073/74

Income slab Rate of tax Income slab Rate of tax
First Rs. 300,000 1% First Rs. 400,000 1%
Next Rs. 100,000 15% Next Rs. 100,000 15%
Above 400,000 25% Above 500,000 25%
If the taxable 40% additional tax If the taxable 40% additional tax
income is above Rs on the tax amount income is above on the tax amount
2,500,000 calculated under Rs 2,500,000 calculated under
25% slab above 25% slab above
(applicable only in (applicable only in
the income above the income above
2,500,000) 2,500,000)
Provision of 10% exemption to female is Provision of 10% exemption to female is
not made to married female employees. not made to married female employees.
27


2. Clause 17: Presumptive Tax
Particulars FY 2072/73 FY 2073/74
For person transacting goods of cigarette and 0.5% of turnover 0.25% of turnover
gas on the basis of minimum 3% commission
For businesses other than cigarettes and gas 1.5% of turnover 0.75% of turnover
For person in service business 2% of turnover 2% of turnover
28


Customs Act 2064
Section 51 (1): Punishment

If any person commits or attempts to If any person commits or attempts to
commit export smuggling or import commit export smuggling or import
smuggling of any goods or exports or smuggling of any goods or exports or
imports or attempts to export or import imports or attempts to export or import
any goods through any route other than any goods through any route other than
the route so prescribed under Section 3 the route so prescribed under Section 3
that such goods are to be exported or that such goods are to be exported or
imported only through that route, the imported only through that route, the
Customs Officer may forfeit such Customs Officer may forfeit such
goods and impose a fine equal to the goods if amount of controversy is
amount in controversy of such goods or Rs. up to 1 crore and the district
imprisonment as follows or both court may forfeit such goods if
punishments: amount of controversy is more
than 1crore, and impose a fine equal to
the amount in controversy of such goods
or imprisonment as follows or both
punishments:
Term of Amount in Term of Amount in
Punishment Controversy (NPR) Punishment Controversy (NPR)
Not Exceeding 2 Not Exceeding 1
months 25,000-100,000 month 1 - 2.5 Million
2-6 Months 0.10 - 0.50 Million 1-3 Months 2.5 - 5 Million
4-12 Months 0.50 - 2.5 Million 3-12 Months 5 - 10 Million
8-24 Months 2.5 - 5 Million 1- 2 Years 10 - 30 Million
1- 3 Years 5 - 10 Million 2-5 Years > 30 Million
2 - 5 Years > 10 Million
29


Additional Provisions
1. Section 88 A : Confidentiality
No person shall disclose any information regarding valuation of custom duty and
personal information submitted by importer or exporter. Notwithstanding anything
contained in this section, such information may be disclosed in following
circumstances:
During Investigation by Competent Authority

During the process of Audit,
If necessary in legal proceedings
2. Section 89 B: Identification Number
Importer and Exporter shall apply for import and export identification number for
the purpose of import and export respectively as notified by Customs Department.
30


Increase in Custom Tariff
Heading Sub Description of Product/Goods Existing Tariff Revised Tariff

heading or Service
9.01 Coffee, whether or not
roasted or decaffeinated;
coffee husks and skins;
coffee substitutes
containing coffee in any
proportion
0901.11.00 Not decaffeinated 10% 20%
0901.12.00 -Decaffeinated 10% 20%
22.03 Beer made from malt.
2203.00.00 Beer made from malt. Rs. 125 per Ltr. Rs. 165 per Ltr.
22.04 Wine of fresh grapes,
including fortified wines;
grape must other than that
of Heading 20.09.
2204.10.00 Sparkling wine Rs. 180 per Ltr. Rs. 240 per Ltr.
Other wine; grape must
with fermentation
prevented or arrested by
the addition of alcohol
2204.21.00 In container containing 2 ltr or Rs. 180 per Ltr. Rs. 240 per Ltr.
less
2204.29.00 Others Rs. 180 per Ltr. Rs. 240 per Ltr.
2204.30.00 Other grape must Rs. 180 per Ltr. Rs. 240 per Ltr.
22.05 Vermouth and other wine
of fresh grapes flavored
with plants or aromatic
substances.
2205.10.00 In containers holding 2 L or Rs. 180 per Ltr. Rs. 240 per Ltr.
less
2205.90.00 Other Rs. 180 per Ltr. Rs. 240 per Ltr.
22.08 Undenatured ethyl alcohol
of an alcoholic strength by
volume of less than 80%
vol; spirits, liqueurs and
other spirituous beverages
2208.20.10 All kinds of alcoholic fluids Rs. 700 per Ltr Rs. 900 per Ltr
including spirits used as raw
material of wine or brandy
2208.20.90 Other Rs. 1200 per Ltr Rs. 1600 per Ltr
Whiskies
2208.30.10 Alcoholic fluids including Rs. 700 per Ltr Rs. 900 per Ltr
spirits used as raw materials of
whisky
31


Rum and other spirits
obtained by distilling
fermented sugar-cane
products:
Rum and other spirits obtained
by distilling fermented sugar-
cane products
Gin and Geneva
Gin and Geneva
Vodka
Vodka
Liqueurs and cordials
Liqueurs and cordials
27.1 Petroleum oils and oils
obtained from bituminous
minerals, other than
crude; preparations not
elsewhere specified or
included, containing by
weight 70% or more of
petroleum oils or of oils
obtained from bituminous
minerals, these oils being
the basic constituents of
the preparation; waste oils.
Others
2710.19.60 Base Oil (Use for making 15% 30%
mobile
27.16 Electrical energy. (Optional
Heading)
3921.90.00 Others 15%
3921.90.10 Printed 20%
3921.90.90 Others 15%
49.07 4907.00.00 Unused postage, revenue 10% 15%
or similar stamps of
current or new issue in the
country in which they have,
or will have, a recognised
32


face value; stamp-
impressed paper; bank
Notes; cheque forms;
stock, share or bond
certificates and similar
documents of title.
Decrease in Custom Tariff
Heading Sub heading Description of Product/Goods or Service Existing Revised

Tariff Tariff
5.11 Animal products not elsewhere
specified or included; dead animals
of Chapter 1 or 3, unfit for human
consumption.
0511.99.10 Eggs of silk worm 5% Nil
25.01 Salt (including table salt and
denatured salt) and pure sodium
chloride, whether or not in aqueous
solution or containing added
anticaking or free-flowing agents;
sea water
2501.00.90 -Other 5% Nil
2716.00.00 Electrical energy. (Optional Heading) 15% Nil
30.02 Human blood; animal blood
prepared for therapeutic,
prophylactic or diagnostic uses;
antisera, other blood fractions and
immunological products, whether or
not modified or obtained by means
of biotechnological processes;
vaccines, toxins, cultures of micro-
organisms (excluding yeasts) and
similar products.
Others
3002.90.10 Diagnostic Kits 10% 5%
30.06 Pharmaceutical goods specified in
Note 4 to this Chapter
3006.10.00 Sterile surgical catgut, similar sterile 10% 5%
suture materials (including sterile
absorbable surgical or dental yarns) and
sterile tissue adhesives for surgical wound
closure; sterile laminaria and sterile
laminaria tents; sterile absorbable surgical
or dental haemostatics; sterile surgical or
33


dental adhesion barriers, whether or not
absorbable
3006.20.00 Blood grouping reagents 10% 5%
3006.30.00 Opacifying preparations for X-ray 10% 5%
examinations; diagnostic reagents
designed to be administered to the patient
31.01 3101.00.00 Animal or vegetable fertilisers, 20% Nil
whether or not mixed together or
chemically treated; fertilisers
produced by the mixing or chemical
treatment of animal or vegetable
products.
31.02 Mineral or chemical fertilisers,
nitrogenous.
3102.10.00 Urea, whether or not in aqueous solution 20% Nil
Ammonium sulphate; double salts
and mixtures of ammonium
sulphate and ammonium nitrate:
3102.21.00 Ammonium sulphate 20% Nil
3102.29.00 Other 20% Nil
3102.30.00 Ammonium nitrate, whether or not in 20% Nil
aqueous solution
3102.40.00 Mixtures of ammonium nitrate with 20% Nil
calcium carbonate or other inorganic non-
fertilizing substances
3102.50.00 Sodium nitrate 20% Nil
3102.60.00 Double salts and mixtures of calcium 20% Nil
nitrate and ammonium nitrate
3102.80.00 Mixtures of urea and ammonium nitrate in 20% Nil
aqueous or ammoniacal solution
3102.90.00 Other including mixtures not specified in 20% Nil
the foregoing Sub-headings
phosphatic.
3103.10.00 Superphosphates 20% Nil
3103.90.00 Other 20% Nil
potassic
3104.20.00 -Potassium chloride 20% Nil
3104.30.00 Potassium sulphate 20% Nil
3104.90.00 -Other 20% Nil
31.05 Mineral or chemical fertilizers
containing two or three of the
fertilising elements nitrogen,
phosphorus and potassium; other
fertilisers; goods of this Chapter in
tablets or similar forms or in
packages of a gross weight not
exceeding 10 kg
34


3105.10.00 Goods of this Chapter in tablets or similar 20% Nil
forms or in packages of a gross weight not
exceeding 10 kg
3105.20.00 Mineral or chemical fertilizers containing 20% Nil
the three fertilizing elements nitrogen,
phosphorus and potassium
3105.30.00 Diammonium hydrogen orthophosphate 20% Nil
(diammonium phosphate)
3105.40.00 Ammonium dihydrogen orthophosphate 20% Nil
(monoam-monium phosphate) and
mixtures thereof with diammonium
hydrogen orthophosphate (diammonium
phosphate) 9.5 20 -Other mineral or
chemical fertilizers containing the two
fertilizing elements nitrogen and
phosphorus:
3105.51.00 -Containing nitrates and phosphates 20% Nil
3105.59.00 Other 20% Nil
3105.60.00 -Mineral or chemical fertilizers containing 20% Nil
the two fertilizing elements phosphorus
and potassium
3105.90.00 Other 20% Nil
38.22 3822.00.00 Diagnostic or laboratory reagents on 10% 5%
a backing, prepared diagnostic or
laboratory reagents whether or not
on a backing, other than those of
Heading 30.02 or 30.06; certified
reference materials.
39.18 Floor coverings of plastics, whether
or not self-adhesive, in rolls or in the
form of tiles; wall or ceiling
coverings of plastics, as defined in
Note 9 to this Chapter.
-Of polymers of vinyl chloride:
3918.10.10 -Roffing sheets, Roffing tiles 30% 15%
39.2 Other plates, sheets, film, foil and
strip, of plastics, non-cellular and
not reinforced, laminated,
supported or similarly combined
with other materials.
3920.99.00 Of other plastic 15%
3920.99.10 Printed 20%
3920.99.90 Others 15%
39.21 Other plates, sheets, film, foil and
strip, of plastics.
39.26 Other articles of plastics and articles
of other materials of Headings 39.01
to 39.14
Other:
3926.90.10 Bangles, Tika, Tikuli and Beads 5% Nil
35


40.14 Hygienic or pharmaceutical articles
(including teats), of valcanised
rubber other than hard rubber, with
or without fittings of hard rubber
4014.10.00 -Sheath contraceptives 5% Nil
49.01 Printed books, brochures, leaflets
and similar printed matter, whether
or not in single sheets
4901.10.00 -In single sheets, whether or not folded 5% Nil
4901.91.00 -Dictionaries and encyclopedias, and serial 5% Nil
instalments thereof
4901.99.00 --Other 5% Nil
49.02 Newspapers, journals and
periodicals, whether or not
illustrated or containing advertising
material
4902.10.00 Appearing at least four times a week 5% Nil
4902.90.00 Other 5% Nil
49.03 4903.00.00 Children's picture, drawing or 5% Nil
coloring books.
49.04 4904.00.00 Music, printed or in manuscript, 10% Nil
whether or not bound or illustrated.
49.1 4910.00.00 Calendars of any kind, printed, 20%
including calendar blocks.
4910.00.10 Traditional calendars Nil
4910.00.90 Others 20%
50.01 5001.00.00 Silk-worm cocoons suitable for reeling 5% Nil
51.01 Wool, not carded or combed
Greasy, including fleece-washed
wool
5101.11.00 Shorn wool 5% Nil
5101.19.00 Other 5% Nil
Degrased, not carbonised:
5101.21.00 --Shorn wool 5% Nil
5101.29.00 -Other 5% Nil
5101.30.00 -Carbonised 5% Nil
51.08 Yarn of fine animal hair (carded or
combed), not put up for retail sale.
5108.10.00 -Carded 5%
5108.10.10 Kashmiri Yarn 1%
5108.10.90 Others 5%
5108.20.00 Combed 5%
5108.20.90 Others 5%
51.09 Yarn of wool or of fine animal hair,
put up for retail sale.
5109.10.00 Containing 85 % or more by weight 5%
of wool or of fine animal hair
36


5109.10.90 Others 5%
5109.90.00 Other 5%
Kashmiri Yarn 1%
Others 5%
52.01 5201.00.00 Cotton, not carded or combed 10% Nil
52.02 Cotton waste (including yarn waste
and garneted stock).
5202.10.00 Yarn waste 15% Nil
Other
5202.91.00 Garneted stock 15% Nil
5202.99.00 Other 15% Nil
52.03 5203.00.00 Cotton, carded or combed. 15% Nil
52.05 Cotton yarn (other than sewing 5% 1%
thread), containing 85% or more by
weight of cotton, not put up for retail
sale
52.07 Cotton yarn (other than sewing
thread) put up for retail sale
5207.10.00 Containing 85% or more by weight of 5% 1%
cotton
66.02 6602.00.00 Walking-sticks, seat-sticks, whips, riding 5%
crops and the like
6602.00.10 Stick used by blind people Nil
6602.00.90 Others 5%
70.18 Glass beads, imitation pearls, imitation
precious or semi-precious stones and
similar glass small wares, and articles
thereof other than imitation jewelry; glass
eyes other than prosthetic articles;
statuettes and other ornaments of lamp
worked glass, other than imitation jewelry;
glass microspheres not exceeding 1 mm in
diameter.
7018.10.10 Bangles, Tika Tikuli & beads 5% Nil
71.01 Pearls, natural or cultured, whether
or not worked or graded but not
strung, mounted or set; pearls,
natural or cultured, temporarily
strung for convenience of transport
7101.10.00 Natural pearls 5% 1%
-Cultured pearls:
7101.21.00 -Unworked 5% 1%
7101.22.00 Worked 5% 1%
71.02 Diamonds, whether or not worked, 5% 1%
but not mounted or set.
71.03 Precious stones (other than 5% 1%
diamonds) and semi-precious
stones, whether or not worked or
graded but not strung, mounted or
37


set; ungraded precious stones (other
than diamonds) and semi-precious
stones, temporarily strung for
convenience of transport
71.04 Synthetic or reconstructed precious or 5% 1%
semiprecious stones, whether or not
worked or graded but not strung, mounted
or set; ungraded synthetic or reconstructed
precious or semi-precious stones,
temporarily strung for convenience of
transport
71.06 Silver (including silver plated with
gold or platinum), unwrought or in
semi manufactured forms, or in
powder form.
71.13 Articles of jewelry and parts thereof,
of precious metal or of metal clad
with precious metal.
7113.19.00 other precious metal, whether or not 30% 15%
plated or clad with precious metal
82.01 Hand tools, the following: spades,
shovels, mattocks, picks, hoes, forks
and rakes; axes, bill hooks and
similar hewing tools; secateurs and
pruners of any kind; scythes, sickles,
hay knives, hedge shears, timber
wedges and other tools of a kind
used in agriculture, horticulture or
forestry.
8201.10.00 Spades and shovels 5%
8201.10.10 Spades 1%
8201.10.90 Other 5%
8201.50.00 -Secateurs and similar one handed pruners 5% 1%
and shears (Including poultry shears)
8201.90.00 Other hand tools of a kind used in 5%
agriculture, horticulture or forestry
8201.90.10 Hands tools of a kind used in agriculture, 1%
horticulture or forestry
8201.90.90 Others 5%
84.13 Pumps for liquids, whether or not
fitted with a measuring device;
liquid elevators.
8413.70.00 Other centrifugal pumps 15%
8413.70.11 2-8hp capacity 1%
8413.70.90 Others 15%
84.24 Mechanical appliances (whether or
not hand operated) for projecting,
dispersing or spraying liquids or
powders; fire extinguishers, whether
or not charged; spray guns and
38


similar appliances; steam or sand
blasting machines and similar jet
projecting machines.
8424.81.00 Other Agricultural or horticulture 5% 1%
84.32 Agricultural, horticultural or forestry 5% 1%
machinery for soil preparation or
cultivation; lawn or sports-ground rollers.
84.33 Harvesting or threshing machinery, 5% 1%
including straw or fodder balers; grass or
hay mowers; machines for cleaning,
sorting or grading eggs, fruit or other
agricultural produce, other than machinery
of Heading 84.37.
84.34 Milking machines and dairy machinery. 5% 1%
84.35 Presses, crushers and similar machinery 5% 1%
used in the manufacture of wine, cider,
fruit juices or similar beverages
84.36 Other agricultural, horticultural, forestry, 5% 1%
poultry-keeping or bee-keeping machinery,
including germination plant fitted with
mechanical or thermal equipment; poultry
incubators and brooders.
84.37 Machines for cleaning, sorting or grading 5% 1%
seed, grain or dried leguminous vegetables;
machinery used in the milling industry or
for the working of cereals or dried
leguminous vegetables, other than farm-
type machinery
84.38 Machinery, not specified or included
elsewhere in this Chapter for the
industrial preparation or
manufacture of food or drink, other
than machinery for the extraction or
preparation of animal or fixed
vegetable fats or oils.
8438.50.00 Machinery for the preparation of meat or 5% 1%
poultry
8438.60.00 Machinery for the preparation of fruits, 5% 1%
nuts or vegetables
8438.80.10 Tea shorting Machine, C.T.C.Machine, Tea 5% 1%
formenting Machine, Tea Drier Machine,
L.T.P. Machine
84.52 Sewing machines, other than book- sewing 5% 1%
machines of Heading 84.40; furniture,
bases and covers specially designed for
sewing machines; sewing machine needles.
85.02 Electric generating sets and rotary
converters.
8502.11.00 output not exceeding 75 kVA 15%
8502.11.10 output up to 12.5 kVA 15%
39


8502.11.90 Others 1%
8502.11.12 Of an output exceeding 75 kVA but not 15% 1%
exceeding 375 kVA
8502.11.13 Of an output exceeding 375 kVA 15% 1%
85.28 Monitors and projectors, not
incorporating television reception
apparatus; reception apparatus for
television, whether or not
incorporating radio-broadcast
receivers or sound or video
recording or reproducing apparatus.
-Other, color
8528.72.10 Of unassembled condition 30% 20%
Others 30% 20%
87.01 Tractors (other than tractors of
87.09)
8701.10.10 Power trailers, Mini trailers 5% 1%
8701.10.90 Others 5% 1%
87.02 Motor vehicles for the transport of
ten or more persons, including the
driver
8702.90.10 Buses (with a capacity more than 25 30%
seats)
8702.90.11 Electrically operated 1%
8702.90.19 Others 30%
8702.90.20 Mini Buses (with a capacity 15- 25 30%
seats)
8702.90.29 Others 30%
8702.90.30 Microbuses (with a capacity 11- 24 30%
seats)
8702.90.39 Others 30%
8702.90.90 Jeep, Car and Van 80%
8702.90.99 Others 80%
87.03 Motor cars and other motor vehicles
principally designed for the
transports of persons (other than
those of Heading 87.02), including
station wagons and racing cars
Electrically operated
8703.90.11 Three Wheelers 30% 10%
8703.90.19 Other 80% 10%
8703.90.90 Others 80% 80%
87.04 Motor vehicles for the transport of
goods
8704.22.90 Exceeding 5 tons but not exceeding 20 30%
tons-others
40


8704.22.91 Tank attached with chassis specially 1%
designed for transportation of Milk
8704.22.92 Container truck attached with chassis 10%
8704.22.93 10%
8704.22.99 Others 30%
8704.90.00 Others 30%
8704.90.10 with refrigerating system 1%
8704.90.90 Others 30%
87.05 Special purpose motor vehicles,
other than those principally
designed for the transport of
persons or goods (for example,
breakdown lorries, crane lorries,
fire fighting vehicles, concrete-mixer
lorries, road sweeper lorries,
spraying lorries, mobile work shops,
mobile radiological units).
8705.30.00 Fire fighting vehicles 10% 1%
87.11 Motorcycles (including mopeds) and
cycles fitted with an auxiliary
8711.90.00 Others 30%
8711.90.90 Others 30%
87.13 Carriages for disabled persons,
whether or not motorized or
otherwise mechanically propelled
8713.10.00 Not mechanically propelled 5% Nil
89.03 Yachts and other vessels for pleasure
or sports; rowing boats and canoes.
8903.91.00 Yachts and other vessels for pleasure or 15% 1%
sports; rowing boats and canoes.
90.21 Orthopedic appliances, including
crutches, surgical belts and trusses;
splints and other fracture
appliances; artificial parts of the
body; hearing aids and other
appliances which are worn or
carried, or implanted in the body, to
compensate for a defect or disability.
9021.10.00 Orthopedic or fracture appliances 5% Nil
Other artificial parts of the body
9021.31.00 Artificial joints 5% Nil
9021.39.00 Other 5% Nil
9021.40.00 Hearing aids, excluding parts and 5% Nil
accessories
41


Change in Valuation Method
Heading Sub- Description of Product/Goods or Existing Revised Tariff

Heading Service Tariff
22.07 Undenatured ethyl alcohol of an
alcoholic strength by volume of
80% vol. or higher; ethyl alcohol
and other spirits, denatured, of
any strength.
2207.10.00 -Undenatured ethyl alcohol of an 30% Rs. 30 per Ltr
alcoholic strength by volume of 80%
vol. or higher
2207.20.00 Ethyl alcohol and other spirits, 30% Rs. 30 per Ltr
denatured, of any strength
7106.10.00 Powder 5% Rs. 56 per 10g
Others
7106.91.00 Unwrought 5% Rs. 56 per 10g
7106.92.00 Semi-manufactured 5% Rs. 56 per 10g
71.08 Gold (including gold plated with
platinum) unwrought or in semi-
manufactured forms, or in
powder form
Non-Monetary
7108.11.00 Powder 5% Rs. 4200 per
10g
7108.12.00 Other unwrought forms 5% Rs. 4200 per
10g
7108.13.00 Other semi-manufactured forms 5% Rs. 4200 per
10g
7108.20.00 Monetary 5% Rs. 4200 per
10g
42


For Further Consultation, Please Contact:
LDSA Associates, LD Mahat

Chartered Accountants Managing Partner
64 Bishal Basti Ka, Bishal Nagar, Tel: +977 (1) 442 0810
Kathmandu, Nepal
Email: ld.mahat@cscpl.com.np
Tel: +977 (1) 442 0807/ 08/ 10
Fax: +977 (1) 444 0528
Isha Shrestha
Website: www.ldsaa.com Deputy Manager
Email: ldsa@cscpl.com.np Email: isha.shrestha@cscpl.com.np
Disclaimer: The information contained in this document is compiled by LDSA Associates

solely for the information of its clients and staffs. LDSA will not be responsible for any
decision taken on the basis of matters contained herein.
43

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Budget

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Nepal Budget 2016/17

Below is the Source of Finance and Allocation of Budget presented:

195.72 Principal Repayment

Allocation of Budget Objectives

Hydropower for Economic Prosperity

A strategy will be adopted to ascertain the capacity of Nepal's potential hydropower

Financial Sector Reform

Infrastructure Development Bank will be established with public private

Mobile Banking and Branchless banks will be promoted.

Production based companies will be encouraged to be listed in the stock market.

Insurance companies will be encouraged to expand the access in rural sector. A

A compulsory provision has been made to the insurance companies to dedicate

Financial literacy program will effectively be expedited

Tax System Reform for Economic Prosperity

Tripartite agreement among producer, authorized dealer, and authorized

Control of Tax Evasion for Fairness and Neutrality of Tax System

Special unit will be established in Inland Revenue Department to control tax

Federal Reserve Fund

HIGHLIGHTS OF AMENDMENTS IN TAX LAWS

Royalty on Casino Operations:

New Provision: Exemption on Demurrage Charges:

Exemption on Income derived by certain Co0perative Societies:

Audit of Books of Accounts:

Value Added Tax (VAT) Act 2052

Section 2(n)- "Registration Number" means "Registration Number" means

Provision in Registration of Joint Venture (JV)

2. Display of Sales Price

Group- 5: Medicine, Medical Care, and Similar Health Services

Group- 11: Other Goods and Services

Excise Duty Act 2058

Power to Suspend the License

Sec 9A (5): Power to Suspend License-Additional Provision

Power to cancel the License

Power to Search, Seize or Arrest

to seize the product subject to to seize the product subject

Other Area Covered by Budget Speech

Heading/Sub Description of Product/Goods or Existing Rate Revised Rate

Income Tax Act 2058

Computation of Taxable Income

Business Exemptions and Concession

Section Existing Provision Revised Provision

Special Provision to Merger or Acquisition of Business

Section Existing Provision Revised Provision

Dividend paid by a resident Dividend paid by a resident

Social Security Fund

Additional Provisions in Income Tax Act 2058

3. Sec 95 KA (6): Advance Tax Collection

Exemption on Interest, Fees and Fines

Income Tax Return for FY 2071/72

1. Clause 1: Taxable Income of a Natural Person

Fiscal Year 2072/73 Fiscal Year 2073/74

Fiscal Year 2072/73 Fiscal Year 2073/74

Customs Act 2064

Section 51 (1): Punishment

During Investigation by Competent Authority

2. Section 89 B: Identification Number

Heading Sub Description of Product/Goods Existing Tariff Revised Tariff

Decrease in Custom Tariff

Heading Sub heading Description of Product/Goods or Service Existing Revised

Change in Valuation Method

Heading Sub- Description of Product/Goods or Existing Revised Tariff

LDSA Associates, LD Mahat

Disclaimer: The information contained in this document is compiled by LDSA Associates

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