Nepal Electricity Authority Seeks Clarification on VAT Implementation

Nepal Electricity Authority has sought clarification from the Inland Revenue Department regarding the implementation of Value Added Tax (VAT) on electricity bills.

The move comes after Energy Minister Biraj Bhakta Shrestha directed the authority to find a solution to the issue, which has been causing inconvenience to consumers. The minister’s directive was issued after an online news portal reported that the authority had started charging VAT on electricity bills from Ashar, instead of Shrawan, as stipulated by the Economic Act, 2083.

According to the Act, VAT is applicable on electricity bills from Shrawan 1. However, the authority had included VAT in the bills for electricity consumed in Ashar, which were issued in the first week of Shrawan. This move had sparked widespread complaints from consumers.

Minister Shrestha had directed the authority to clarify the legal and practical aspects of the issue and find a solution that would not cause injustice to consumers. He had also emphasized that the implementation of VAT should not impose an additional financial burden on consumers.

Following the minister’s directive, the authority has sought clarification from the Inland Revenue Department on whether VAT is applicable on electricity bills for Ashar. The authority has also sought the department’s opinion on whether VAT is applicable on the minimum demand charge.

According to the authority, the clarification sought from the department will be used to make necessary adjustments in the bills for the upcoming month. It is expected that this will resolve the grievances of consumers.