Compulsory VAT Registration In Nepal

As per prevailing law, the business can obtain vat registration in Nepal voluntarily unless engaged in exclusively vat exempted items from the date of commencement of business.

There are some cases in which compulsory vat registration required irrespective of the amount of turnover.

Compulsory VAT Registration in Nepal

• If any person dealing in the taxable transaction after obtaining a loan from banks and financial institutions exceeding RS 10,00,000.
• If Tax officer finds stock during inspection exceeding the limit prescribed by IRD.
• The following points are removed from Finance act 2078/79 so no mandatory registration on the following.

• If the person engaged in Bricks Manufacturer, Liquor, Wine, Health Club, Discotheque, Massage Therapy, Motor Parts, Electronic Software, Clearing Agent, Toy Business, Scrap Business, Trekking, Rafting, Ultra-Light Flight, Paragliding, Tourism Transportation, Crusher, Slate and Stone Industries has to get registered under VAT.

• Hardware, Sanitary Fittings, Furniture, Fixtures, Furnishing, Automobiles, Motor Parts, Electronics, Marbles, Educational & Legal Consultancy, Accounting & Auditing Services, Catering Service, Party Palace Business, Parking Service, Mechanically operated Dry Cleaning Service and Restaurant with Bar, Color Lab, Boutique, Tailoring Business having Suiting / Shirting Materials, Ice cream Industry and Supply of Uniforms to Educational Institute/Health Institute/Other entity operating in Metropolitan, Sub-metropolitan & Municipality Areas and other areas specified by Inland Revenue Department has to get registered under VAT.
• In other cases, if Turnover is in excess of 50 Lacs dealing in goods or  20 Lacs dealing in Services during the preceding last 12 months then compulsory vat registration required.

Note: Above mention Highlighted strikethrough are the changes made by finance act 2077/78.

Frequently Asked Question(FAQ)

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