5.6 VAT Laws

5.6.1 Basic Terminology TermMeaningTaxable personRegistered (or registrable) supplier TermMeaningTax invoiceThe prescribed invoice carrying VAT details — credit's evidenceInput taxVAT paid on purchasesOutput taxVAT charged on salesTaxable supplySale of goods/services within the Act's chargeTaxable priceThe consideration basis excluding VAT itself 5.6.2 Purpose and Basis of VAT Purpose: revenue with neutrality; basis: the taxable supply — the Act charges tax on every supply of goods and services in Nepal by a taxable person, and on imports. 5.6.3 Taxable Goods and Services All goods and services except the exempt schedule: essential goods, specified services, and the zero-rated items by the Act's classification. 5.6.4 Registration and Cancellation of Registration of Firms Registration is mandatory when turnover crosses the Act's threshold (fixed and adjusted by law and directive over the years; small traders below the threshold stay outside but may register voluntarily). Cancellation follows cessation, or de-registration where turnover falls within the Act's conditions — a route the department polices against refund-run cancellations. 5.6.5 Place and Time of Supply, Rate of VAT, and Taxable Price • Place: where goods are delivered/services performed; imports at the customs point. • Time: generally when goods are supplied or the service performed (invoice/payment timing rules under the Act) — the trigger that fixes the tax period. • Taxable price: the consideration for the supply, excluding VAT itself, adjusted for…