Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Consumers will receive a 10% refund on the Value Added Tax (VAT) paid when using electronic payment methods instead of cash at restaurants, bars, hotels, and lodges. The Inland Revenue Department announced this on Sunday through a public notice.
The department released a list of services eligible for the 10% VAT refund, which includes bars, restaurants, all types of hotels, motels, lodges, and guesthouses. The refund applies only when payments are made through electronic methods, and it is part of an incentive to encourage cashless transactions.
This decision is in accordance with the Value Added Tax Act of 1996. Certain conditions have been specified for eligibility. Only businesses registered for VAT and issuing electronic invoices through the department are eligible to participate in this system.
The notice stated that sellers receiving payments via electronic devices like debit/credit cards, QR codes, and mobile payments must arrange for the automatic refund of 10% VAT directly into the consumer’s bank account. Furthermore, suppliers of electronic devices and software listed with the Inland Revenue Department must modify their systems in line with the 2019 VAT refund procedures to ensure compatibility with the VAT refund process.
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