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.
- 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 & MunicipalityAreas 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: Other than mention above there are some cases where temporary registration is required mandatorily.
Note: Above mention Highlighted strikethrough are the changes made by finance act 2077/78.
Frequently Asked Question(FAQ)
Whether Consultant needs to obtain VAT registration in Nepal??
>Normally Consultant providing consultancy service needs to obtain vat registration only if the threshold of 2,00,000 is exceeded,but if consultant engaged in educational consultancy or any other service specified above then need to obtain registration irrespective of Turnover.
More to be updated