Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: In a significant regulatory update, the government has mandated that traders must include the Harmonised System (HS) code when issuing VAT bills for imported goods. This change comes as part of an amendment to the Value Added Tax Regulation 1997.
The revised rule states, “Now traders need to reveal the four-digit HS code as stated on the short-declaration form issued on imported goods.” The HS code, managed by the World Customs Organization, is a unique numerical classification used for international trade of products. This measure aims to improve tracking of domestic trading of imported goods and curb cross-border smuggling.
Additionally, the government has increased the VAT registration threshold for businesses involved in service trade. Under the new provision, any service trade business with an annual transaction of Rs 3 million or more must register for VAT. Previously, the threshold was set at Rs 2 million. This updated rule also applies to businesses that combine trade of goods and services.
The VAT requirements for transport and merchandise businesses remain unchanged. According to existing laws, transporters and merchandise businesses must register for VAT if their annual transactions exceed Rs 5 million.
These amendments reflect the government’s ongoing efforts to streamline tax regulations and enhance compliance among traders.
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