1.What is taxable transaction and taxable goods or services?
Taxable transaction under VAT Act are those transactions that cover supply of taxable goods or services in Nepal and import or export of the same. VAT Act 2052 does not consider basic agricultural products, goods of basic necessity, animals and its yields, agricultural supplements, etc. as provided under Schedule 1 of the Act.
2. On what price should VAT be imposed?
Generally, in context of cash transaction, VAT should be imposed on the selling price for the consumer. VAT is not levied on any given discounts, commission or other business exemptions while making supply of goods or services.
3. What are the amounts to be included under taxable amount?
Following should be included under taxable amount:
- Production or Cost Price
- Expenses incurred for transportation and distribution during transaction
- Profit amount
- Excise duty, ownership duty and other taxes other than VAT.
4. Is VAT imposed on gifts and sample products?
If samples and gifts are to be distributed based under the policy of the business decided by the management for the purpose of business promotion, VAT is not levied on such gifts and samples.
However, invoices are to be maintained for such gifts and samples.
5. On what amount is VAT imposed for the purchase of used goods from unregistered seller?
VAT is imposed on the amount of difference between selling price and cost price for the purchase of used goods from the unregistered seller. For example, if a reconditioning house for motorcycles sells a used motorbike at Rs 70,000 for which he buys the same with Rs 50, ooo VAT shall be levied on the differentiated amount i.e. Rs 20,000.
6. On what price is VAT levied on the sale of used goods that has already been tax cleared?
On such sale of used goods for what tax has already been cleared, VAT is levied on the selling price.
7. Should VAT be levied on sale of assets used for business purpose?
VAT has to be levied on sale of such assets like machineries, vehicles, equipment, etc.
8. Should VAT be paid for the goods used by oneself that has been purchased for business purpose?
Those consumer goods that have been purchased for business purpose but has been used by himself for household or personal use are taxable. Although such goods are already tax adjusted, that amounts for VAT.
9. If the consumer denies to pay tax, should it be treated as collection of VAT?
After sale of goods and services, the registered person has his liability to pay tax although he does not impose VAT. Likewise, if the consumer does not pay the tax amount, it should be treated as if tax has been collected since the registered person has his tax burden.
10. If the goods that have been exported lawfully fulfill all the procedures or the parties to be collecting such goods denies to collect them or for other reasons those goods are needed to be re-imported, what should be done?
In this case, if those re-imported goods are to be exported within three months, Custom office may release such goods treating VAT paid while returning those goods as bail. Custom office shall return the bail amount while re-exporting those goods.