10% VAT Refund to Consumers: Directive from the Inland Revenue Department
Author
NEPSE trading
The Inland Revenue Department has issued a directive to refund 10% of the Value Added Tax (VAT) paid by consumers on the purchase of taxable goods and services. The department has published a notice urging the refund of 10% of the VAT as a cash incentive when services are purchased electronically.
Services Eligible for Refund
Consumers will receive a 10% refund on the VAT paid for the following services:
Services provided by drinking establishments (bars)
Services provided by eateries and restaurants
Services provided by all types of hotels, motels, lodges, and guest houses
Terms and Conditions for the Refund
Registration and Approval: Taxpayers registered under the Value Added Tax and approved to issue electronic invoices by the department can participate in this system.
Requirement for Electronic Payment: Consumers must make payments using electronic methods such as debit cards, credit cards, QR codes, or mobile payments. After such a payment, the seller must automatically refund 10% of the VAT amount to the consumer's bank account.
Modification of Electronic Devices and Software: Suppliers of devices and software listed under the Electronic Invoicing Procedure, 2074, must modify their software in accordance with the “Procedure for Refunding VAT to Consumers Paying Electronically, 2076.”
Role of Banks and Financial Institutions: All banks, financial institutions, payment service operators, and providers must facilitate the implementation of this system by making adjustments in line with the “Procedure for Refunding VAT to Consumers Paying Electronically, 2076.”
Conclusion
This initiative by the Inland Revenue Department aims to encourage consumers to make payments through electronic means and promote transparency in financial transactions. It seeks to boost the use of electronic payments and strengthen the tax system.
