Public Notice clarifying the provision of 50% deposit of the VAT amount directly into Inland Revenue Department Account

Inland Revenue Department has issued a public notice to clarify the provisions regarding the deposit of 50% of the VAT Payable to Vendor directly to the Revenue Account of Nepal Government. Provision was introduced by the Finance Ordinance 2076 which has become effective since 2076/02/15 i.e. 29 May 2019.

According to the circular:

1. Provision is applicable for all contracts or supply of goods & services made to the Nepal Government or entities that are fully or partially owned by Nepal Government.
2. Whenever the payment is made to the contractor or supplier or consultant, Nepal Government or entity owned by Nepal Government (fully or partially) must deduct the 50% of the VAT amount and deposit it to the following revenue code:
1. Consultancy and Contract: 33114
2. Suppliers other than contract: 33113
3. The concerned entity must notify the consultant or contractor or supplier, once the deposit is made to the above revenue code.
4. The amount for each consultant, contractor and supplier must be deposited with a separate voucher and cannot be clubbed into one. The detail for the contractors or suppliers or consultants such as PAN No., registered name, code no. of the registered IRD office, bank code no. and revenue code must be clearly specified.