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Showing posts from January, 2023

Can restaurant owner/hotelier charge service charge and vat per Nepalese law?

I saw there is a lot of confusion and misconception around what a restaurant can charge. Many people are complaining over social media that restaurant owners are still charging Service Charge and VAT to them despite recent ruling from the Court. Let us clear the confusion today. Well, this story came into limelight because of journalist Madan Dhungana who filed the case in Kathmandu District Court against Green Valley Resort. In this case, Green Valley Resort had issued an invoice that was above the menu price.  Let's take an example to under what might have happened.  Restaurant had listed coffee as Rs. 200 on its menu, customer ordered it understanding it will cost him/her Rs. 200 but when S/he was given the bill at the time of payment, S/he saw that additional 10% Service Charge was levied followed by 13% VAT as applicable per VAT Act. Customer now ended up paying Rs. 248.60, Rs. 48.60 more than the listed menu price which court deemed as a cheating and not fair to consumer...

Windfall Gain Tax (आकस्मिक लाभमा कर) per Nepal Income Tax Act

Nepal's Income Tax Act defines Windfall gain as a gain obtained by means of lottery, gift, prize, tips, share of earning in a game (जितौरी)  or any other gain acquired incidentally.  Let us explain by example what can potentially be Windfall Gain.  1) Let's say apple recently launched a iPhone 14 in Nepal. Part of such launch, company offered its customer who buys iPhone, an iPad for free. The market value of the iPhone is Rs. 214,000 and that of iPad is Rs. 189,000. In such case, customer who received Rs. 189,000 worth of iPad without any additional cost will be considered a prize hence, a windfall gain. 2) Recently DRS gaming won US$ 292,000 (approx. Rs 4 crore) for being runner's up in the grand finals of the PUBG Mobile Global Championship. Let's assume here that DRS gaming has not been registered as a company but simply represented by individuals. If I am not mistaken, there are 4 members in the team. So, each individual will have won Rs. 1 crore as share of earni...