Financial Ordinance, 2059 (2003)
Date of Authentication and Publication
2059.9.22 (6 January 2003)
Ordinance number 8 of the year 2059
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session;
Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution
Kingdom of Nepal, 2047 (1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2059 (2003).”
(2) This ordinance shall come into force immediately.
21. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty:

(1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered.

(2) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) Notwithstanding contain in Sub-section (1), there shall be furnished a bank guarantee or cash deposit
for the amount of excise duty leviable while exporting goods, to be paid excise duty from the enterprise and on any sold by duty free shop (bonded warehouse or duty free shop). The procedures for the release of such bank
guarantee or cash deposit shall be as prescribed by the Department
(2) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be
exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.”
(3) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this
Act and the Rules framed under this Act.”
(4) The following Schedule shall be inserted after Section 26:

 

 

 

Note :
(1) Less than 20 microne polithin bags are not permitted to sale or distribution inside the Nepal.
(2) The Department may interpret and specify the harmonized codes of the products.

 

Financial Ordinance, 2059 (2003)
Date of Authentication and Publication
2059.9.22 (6 January 2003)
Ordinance number 8 of the year 2059
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session; Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution
Kingdom of Nepal, 2047 (1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2059 (2003).”
(2) This ordinance shall come into force immediately.
21. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty:

(1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered.
(2) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there
shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) Notwithstanding contain in Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting goods, to be paid excise duty from the enterprise and on any sold by duty free shop (bonded warehouse or duty free shop). The procedures for the release of such bank guarantee or cash deposit shall be as prescribed by the Department
(2) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be
exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.”
(3) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.”
(4) The following Schedule shall be inserted after Section 26

 

 

 

Note :
(1) Less than 20 microne polithin bags are not permitted to sale or distribution inside the Nepal.
(2) The Department may interpret and specify the harmonized codes of the products

Financial Ordinance, 2060 (2003)
Date of Authentication and Publication
2060.3.16 (1 July 2003)
Ordinance number 3 of the year 2060
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session; Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution Kingdom of Nepal, 2047(1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2060 (2003).”
(2) This ordinance come into force immediately.
(3) This ordinance shall prevail till the last day of Ashad, 2060 B.S.
21. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty: (1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered.
(2) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) Notwithstanding contain in Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting goods, to be paid excise duty from the enterprise and on any sold by duty free shop (bonded warehouse or duty free shop). The procedures for the release of such bank guarantee or cash deposit shall be as prescribed by the Department
(2) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is twenty five percent of that amount shall be recovered.”
(3) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this
Act and the Rules framed under this Act.”
(4) The following Schedule shall be inserted after Section 26:

 

 

 

Note :
(1) Less than 20 microne polithin bags are not permitted to sale or distribution inside the Nepal.
(2) The Department may interpret and specify the harmonized codes of the products.

Financial Ordinance, 2060 (2003)
Date of Authentication and Publication
2060.4.1(17 July 2003)
Ordinance number 7 of the year 2060
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session; Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution Kingdom
of Nepal, 2047(1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2060 (2003).”
(2) This ordinance shall come into force immediately.

23. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty: (1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered. Provided that, the excise duty which used in khudo (molases) or spirit in the product of liquor may be deducted from the excise duty to be paid on exporting the ready liquor.
(2) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(2) The following Sections 3A. Shall be inserted after Section 3:

“3A. Not to levy excise duty on export from the State of Nepal:

(1) No excise duty shall be levied on goods which exported by an enterprise or on any goods sold by a bonded warehouse and duty free shop from the Nepal.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise. The procedures for the release of such bank guarantee or cash deposit shall be as prescribed by the Department.
(3) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant
deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum
that is Twenty Five percent of that amount shall be recovered.”
(4) Of Section 7:
(a) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the
price fixed” contained in Clause (b) of Sub-section (1).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides,
ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(5) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from Five Thousand Rupees to Fifteen Thousand Rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(6) Of Section 23:
(a) The following Sub-section (1a) shall be inserted after Sub- section (1):
“(1a) while filing an application pursuant to Sub-section (1), one should deposit the excise duty or fine or both, as
it has been accessed or imposed as the case may be.
(b) The words “proviso” shall be deleted contained in Sub- section (3).
(7) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary manuals, subject to this Act and the Rules framed under this Act.”
(8) Repealed: Section 19 shall be repealed.
(9) The following Schedule shall be inserted after Section 26:

 

 

 

Note :
(1) Less than 20 microne polithin bags are not permitted to sale or distribution inside the Nepal.
(2) The Department may interpret and specify the harmonized codes of the products

 

Financial Ordinance, 2060 (2003)
Date of Authentication and Publication
2060.4.1(17 July 2003)
Ordinance number 7 of the year 2060
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session;
Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution Kingdom of Nepal, 2047 (1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2060 (2003).”
(2) This ordinance shall come into force immediately.

23. Amendment to the Excise Duty Act, 2058 (2002): Of the Excise Duty Act, 2058(2002):
(1) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty: (1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered. Provided that, the excise duty which used in khudo (molases) or spirit in the product of liquor may be deducted from the excise duty to be paid on exporting the ready liquor.
(2) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(2) The following Sections 3A. Shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the State of Nepal:

(1) No excise duty shall be levied on goods which exported by an enterprise or on any goods sold by a bonded warehouse and duty free shop from Nepal.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise. The procedures for the release of such bank guarantee or cash deposit shall be as prescribed by the Department.
(3) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum
that is twenty five percent of that amount shall be recovered.”
(4) Of Section 7:
(a) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause (b) of Sub-section (1).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to
be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides, ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(5) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from Five Thousand Rupees to Fifteen Thousand Rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(6) Of Section 23:
(a) The following Sub-section (1a) shall be inserted after Sub- section (1):
“(1a) while filing an application pursuant to Sub- section (1), one should deposit the excise duty or fine or both, as it has been accessed or imposed as the case may be.
(b) The words “proviso” shall be deleted contained in Sub- section (3).
(7) The following Section 25A. Shall be inserted after Section 25:

“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this
Act and the Rules framed under this Act.”
(8) Repealed : Section 19 shall be repealed.
(9) The following Schedule shall be inserted after Section 26:

 

Note :
(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on ambulances, corpse carrying vehicles and battery tempos.
(2) Less than 20 microne polithin bags are not permitted to sale or distribution inside the Nepal

Financial Ordinance, 2061 (2004)
Date of Authentication and Publication
2061.4.1 (16 July 2004)
Ordinance number 3 of the year 2061
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session;
Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution Kingdom of Nepal, 2047(1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2061 (2004).”
(2) This ordinance shall come into force immediately.
23. Amendment to the Excise Duty Act, 2058 (2002): Of the Excise Duty Act, 2058(2002):
(1) The following Clause (j) shall be substituted for Clause (j) Of Section 2:
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty:

(1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered.
(2) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(3) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) The following Sections 3A. and 3B. Shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the State of Nepal:

(1) No excise duty shall be levied on goods exported by an enterprise from Nepal.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise.
(3) The procedures for the release or refund of the bank guarantee or cash deposit as referred to in Sub- section (2) shall be as prescribed by the Department.
3B. Not to levy excise duty on sale by duty free shop:

(1) No excise duty shall be levied on any goods sold by a bonded warehouse and duty free shop.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while purchasing a product subject to excise duty.
(3) The procedures for the release or refund of bank guarantee or the cash deposit as referred to in Sub-section
(2) shall be as prescribed by the Department.
(4) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.”
(5) Of Section 7:
(a) The following Sub-clause (1) shall be substituted for Sub- clause (1) of Clause (a) Of Sub-section (1):
“(1) the price which a manufacturer determines at the time of selling a product subject to excise duty, or”
(b) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause (b) of Sub-section (1) .
(c) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides,
ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(6) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from Five Thousand Rupees to Fifteen Thousand Rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(7) The words “proviso” shall be deleted contained in Sub-section
(3) of Section 23:
(8) The following Section 25A. shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.”
(9) Section 19 shall be repealed.
(10) The following Schedule shall be inserted after Section 26:

 

Financial Ordinance, 2061 (2004)
Date of Authentication and Publication
2061.10.1(15 January 2004)
Ordinance number 22 of the year 2061
An Ordinance Made to Implement Proposals Relating to Finance of
the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session; Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Articles 72 of Constitution
Kingdom of Nepal, 2047 (1990).
1. Short title and commencement : (1) This Act may be called as the “Financial Ordinance, 2061 (2004).”
(2) This ordinance shall come into force immediately.

23. Amendment to the Excise Duty Act, 2058 (2002): Of the Excise Duty Act, 2058(2002):
(1) The following Clause (j) shall be substituted for Clause (j) Of Section 2:
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject
to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such
product.”
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty: (1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered.
(2) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(3) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) The following Sections 3A. and 3B. Shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the State of Nepal: (1) No excise duty shall be levied on a product exported by an enterprise from the State of Nepal.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise.
(3) The procedures for the release or refund of the bank guarantee or cash deposit as referred to in Sub- section (2) shall be as prescribed by the Department.
3B. Not to levy excise duty on sale by duty free shop: (1) No excise duty shall be levied on any product sold by a bonded warehouse and duty free shop.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while purchasing a product subject to excise duty.
(3) The procedures for the release or refund of bank guarantee or the cash deposit as referred to in Sub-section
(2) shall be as prescribed by the Department.
(4) The following Sub-section (3) shall be inserted after Sub-section (2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant
deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is twenty five percent of that amount shall be recovered.”
(5) Of Section 7:
(a) The following Sub-clause (1) shall be substituted for Sub- clause (1) of Clause (a) Of Sub-section (1):
“(1) the price which a manufacturer determines at the time of selling a product subject to excise duty, or”
(b) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause (b) of Sub-section (1) .
(c) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides, ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(6) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from Five Thousand Rupees to Fifteen Thousand Rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(7) The following Section 25A. shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary manuals, subject to this Act and the Rules framed under this Act.”
(8) The following Schedule shall be inserted after Section 26:

(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may interpret and specify the harmonized codes of the products/

Financial Ordinance, 2062 (2005)
Date of Authentication and Publication
2062.4.1(16, July 2005)
Ordinance number 12 of the year 2062
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session; Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Article 72 of Constitution Kingdom of Nepal, 2047(1990).
1. Short title and commencement :

(1) This Ordinance may be called as the “Financial Ordinance, 2062 (2005).”
(2) This ordinance shall come into force immediately.

25. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) The following Clause (j) shall be substituted for Clause (j) Of Section 2:
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject
to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty:

(1) In manufacturing or importing any goods or products set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered.
(2) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(3) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) The following Sections 3A. and 3B. Shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the State of Nepal:

(1) No excise duty shall be levied on a product exported by an enterprise from the State of Nepal.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise.
(3) The procedures for the release or refund of the bank guarantee or cash deposit as referred to in Sub- section (2) shall be as prescribed by the Department.
3B. Not to levy excise duty on sale by duty free shop:

(1) No excise duty shall be levied on any product sold by a bonded warehouse and duty free shop.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while purchasing a product subject to excise duty.
(3) The procedures for the release or refund of bank guarantee or the cash deposit as referred to in Sub-section
(2) shall be as prescribed by the Department.
(4) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.”
(5) Of Section 7:
(a) The following Sub-clause (1) shall be substituted for Sub- clause (1) of Clause (a) Of Sub-section (1):
“(1) the price which a manufacturer determines at the time of selling a product subject to excise duty, or”
(b) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause (b) of Sub-section (1) .
(c) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides, ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(6) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from five thousand rupees to fifteen thousand rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(7) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.”
(8) The following Schedule shall be inserted after Section 26

 

 

 

 

 

Note :
(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may interpret and specify the harmonized codes of the products/goods on which excise duty is leviable

Financial Ordinance, 2062 (2005)
Date of Authentication and Publication
2062.10.1(14 Jan. 2005)
Ordinance Number 49 of the year 2062
An Ordinance Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble: Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal and at the moment Parliament is not in session;
Now, therefore, be it enacted by His Majesty the King Gyanendra Bir Bikram Shah Dev has, in accordance with Article 72 of Constitution Kingdom of Nepal, 2047 (1990).
1. Short title and commencement : (1) This Ordinance may be called as the “Financial Ordinance, 2062 (2005).”
(2) This ordinance shall come into force immediately.

25. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) The following Clause (j) shall be substituted for Clause (j) Of Section 2:
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such
product.”
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty: (1) In manufacturing or importing any goods or products set forth in the Schedule or selling services set forth in the Schedule, the excise duty set forth in the Schedule shall be levied and recovered .
Provided that, the excise duty paid on the purchase or import of any product or service subject to excise duty may be deducted from the excise duty to be paid while selling such product or service.
(2) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(3) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) The following Sections 3A. and 3B. Shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the State of Nepal: (1) No excise duty shall be levied on a product
exported by an enterprise from the State of Nepal.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise.
(3) The procedures for the release or refund of the bank guarantee or cash deposit as referred to in Sub- section (2) shall be as prescribed by the Department.

3B. Not to levy excise duty on sale by duty free shop:

(1) No excise duty shall be levied on any product sold by a bonded warehouse and duty free shop.
(2) For the purposes of Sub-section (1), there shall be furnished a bank guarantee or cash deposit for the amount of excise duty leviable while purchasing a product subject to excise duty.
(3) The procedures for the release or refund of bank guarantee or the cash deposit as referred to in Sub-section
(2) shall be as prescribed by the Department.
(4) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.”
(5) Of Section 7:
(a) The following Sub-clause (1) shall be substituted for Sub-
clause (1) of Clause (a) Of Sub-section (1):
“(1) the price which a manufacturer determines at the time of selling a product subject to excise duty, or”
(b) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause (b) of Sub-section (1) .
(c) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides, ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(6) The following proviso shall be inserted to Clause (d) of Sub- section (3) of Section 12:
“Provided that, such suspension shall not exceed seven days; and decision shall be made no later than sixty days after the making of such suspension.”
(7) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from five thousand rupees to fifteen thousand rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(8) The following Section 25A. shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary manuals, subject to this Act and the Rules framed under this Act.”
(9) The following Schedule shall be inserted after Section 26:

 

 

 

 

 

 

Note :
(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may interpret and specify the harmonized codes of the products/goods on which excise duty is leviable.

 

Financial Act, 2063 (2006)
Date of Authentication and publication
2063.7.20 (6 Nov. 2006)
Act number 12 of the year 2063 (2006)
An Act Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal; Now, therefore, be it enacted by the House of Representatives in the First Year of the issuance of the Proclamation of the House of Representatives, 2063 (2006).
1. Short title and commencement :

(1) This Act may be called as the “Financial Act, 2063 (2006).”
(2) Sections 1, 2, 3, 4, 5, 9 and 18 of this Act shall be deemed to have come into force on 28 Ashad 2063 (12 July 2006) and the other Sections on 1 Shrawan 2063 (17 July 2006).
29. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058 (2002):
(1) Of Section 2:
(a) The following Clause (j) shall be substituted for Clause (j):
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to production cost and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(b) The following Clause (g) shall be substituted for Clause
(g):
“(g) “Production” means the manufacturing, making or preparing a product subject to excise duty, and this expression also includes re-packaging.”
(c) The following Clause (h1) shall be inserted after Clause
(h):
“(h1) “Tobacco product” means tobacco or cigarette containing mixtures of tobacco substance, pan parag, khaini or similar substance which is chewed or put in mouth and this expression also includes bidi, cigar etc.”
(d) The following Clauses (q), (r), (s), (t), (u) and (v) shall be inserted after Clause (p):
(q) “liquors” means any alcoholic substance prepared by fermenting any grains, fruits or any other stratchful substance or by other method, which has an alcoholic strength by volume of more than o.5 percent, and this expression includes liquors, spirit, country liquor (chhang), whisky, rum, gin, brandy, vodka, beer, wine, sherry, cider, perry, mid, malt, industrial alcohol, rectified spirit, ENA and heads spirit.
(r) “ready-made liquors” means all kinds of alcoholic fluids prepared from mixtures with alcoholic strength by volume of less than 57.38 percent.
(s) “L.P. means the strength of pure ethanol in London proof.
(t) “L.P. liter” means the volume of 57.38 percent pure ethanol per liter.
(u) “U.P.” means the strength less than London proof.
(v) “O.P.” means the strength more than London proof
(2) The following Section 3 shall be substituted for Section 3:

“3. To levy and collect excise duty:

(1) In manufacturing or producing and discharging from any enterprise, importing any goods or products set forth in the Schedule or selling any such goods or products imported or selling services, the excise duty set forth in the Schedule shall be levied and collected as follows:
(a) In the case of liquors, cigarette and beer, at the time of production and discharge from the enterprise;
(b) In the case of any product or service to be sold under the automatic discharge system, the excise duty shall be paid within the seventh day of the month following the production or sale; Provided that, the excise duty paid on the purchase or import of any product or service subject to excise duty may be deducted from the excise duty to be paid while selling such product or service.
(2) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(3) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) The following Sections 3A., 3B. and 3C. shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the Nepal: (1) No excise duty shall be levied on a product exported by an enterprise from the State of Nepal.
(2) For the purpose of Sub-section (1), there shall be furnished a cash deposit or bank guarantee for the amount of excise duty leviable while exporting a product subject to excise duty from the enterprise.
(3) The procedures for the release or refund of the cash deposit as referred to in Sub-section (2) shall be as prescribed by the Department.
3B. Not to levy excise duty on sale by duty free shop:

(1) No excise duty shall be levied on any product sold by a bonded warehouse and duty free shop.
(2) For the purposes of Sub-section (1), there shall be furnished a cash deposit for the amount of excise duty leviable while purchasing a product subject to excise duty.
(3) The procedures for the release or refund of the cash deposit as referred to in Sub-section (2) shall be as prescribed by the Department.
3C. Obligation to pay excise duty: The following person shall have the duty to pay the excise duty under this Act:
(a) In the case of a product or service to be produced within the country, the producer or manufacturer thereof;
(b) In the case of a product to be imported, the person receiving the product as mentioned in the bill of lading;
(c) In the case of auction of a product subject to excise duty, the person taking over that product;
(d) In the event that a duty free product is resold or used for other purpose or is converted from a condition of being exempted from excise duty into a condition of being subject to excise duty, the person who has ownership of such product.”
(4) The following Sub-section (3) shall be inserted after Sub-section
(2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.”
(5) Of Section 7:
(a) Of Sub-section (1):
(1) The following Sub-clause (1) shall be substituted for Sub-clause (1) of Clause (a):
“(1) the factory price which a manufacturer determines at the time of selling a product subject to excise duty, or”
(2) The following Sub-clause (1a) shall be inserted after Sub-clause (1) of Clause (a):
“(1a) In the case of service, the price of the service at the time of selling it.”
(a) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause (b).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides, ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section (4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(6) The following proviso shall be inserted to Sub-section (2) of Section 8:
“Provided that, the excise duty license shall not be required for importing any products subject to excise duty under
the diplomatic privilege on the recommendation of the Ministry of Foreign Affairs.”
(7) The following proviso shall be inserted to Clause (d) of Sub- section (3) of Section 12:
“Provided that, such suspension shall not exceed Seven days; and decision shall be made no later than Sixty days after the making of such suspension.”
(8) The following Clauses (a), (b) and (c) shall be substituted for Clauses (a), (b) and (c) of Sub-section (1) of Section 14:
“(a) Ten per cent of the amount in controversy to the informer,
(b) Twenty per cent of the amount in controversy to one who seizes and hands over a product only;
(c) Thirty per cent of the amount in controversy to one who arrests and hands over the person, along with the proof. Provided that, in cases where the informer who gives information or clue be more than one person, the reward shall be divided between them pro rata.”
(9) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine
from Five Thousand Rupees to Fifteen Thousand Rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(10) The following Section 17A. Shall be inserted after Section 17:
“17A. Provision on payment by installment: Where any taxpayer makes a request in writing for payment of any arrear excise duty in installment, permission may be given to pay the same in installments within One year.”
(11) The following Section 19 shall be substituted for Section 19:
“19. Appeal:

(1) An appeal may lie to the Revenue Tribunal against any decision made by the Excise Duty Officer pursuant to this Act.
(2) A person who makes an appeal pursuant to Sub-section (1) shall register a copy of the appeal with the Department no later than Fifteen days of making of the appeal.
(3) The implementation of the decision set forth in Sub-section (1) of Section 16 shall not be deemed to have
been affected by the reason of making an appeal pursuant to Sub-section (1).”
(12) The following Section 23A. Shall be inserted after Section 23:
“23A. There shall be levied the excise duty on the purchase, if any, by His Majesty the King, Her Majesty the Queen, His Royal Highness the Crown Prince, and members of the royal family of any product and service subject to excise duty.”
(13) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.” (14) The following Schedule shall be inserted after Section 26:

 

 

 

 

 

 

(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may interpret and specify the harmonized codes of the products/goods on which excise duty is leviable.
(3) Where one unit purchases and sells more than one type of liquors, payment of the duty at the highest rate shall suffice.
(4) Excise duty shall also be levied on the local sale for the commercial purposes of the motor vehicles mentioned in Clauses (a) to (l) of serial number 43. Provided that, no excise duty shall be levied on such local sale in the case of the motor vehicles already imported prior to the 28 th day of the month of Ashad of the year 2063. (5) The amount of excise duty on the import of a motor vehicle may be deducted from the excise duty payable on the sale of that vehicle.
(6) There shall be 25 percent exemption of per kilogram Rs. 10.00 excise duty leviable on noodles, macaroni and pasta under heading No. 1902.
(7) The raw materials M.S. wire rod in coil under sub-heading No. 7213.91.10 of heading No. 7213 to be imported by an industry shall be exempted from excise duty.
(8) A brick producer shall enjoy an exemption of Rs, 50,000.00 from the license fee payable by that producer in accordance with the Schedule of the Excise Duty Rules.
(9) The Director General may, for statistical purposes, add a digit to the eight digit sub-heading for the purposes of the rate of excise duty.

 

Financial Act, 2064 (2007)
Date of Authentication and Publication
2064.3.28 (12 July, 2007)
An Act Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal; Now, therefore, be it enacted by Legislature-Parliament.
1. Short title and commencement :

(1) This Act may be called as the “Financial Act, 2064 (2007).”
(2) Sections 1, 2, 3, 4, 5, 9 and 11 of this Act shall be deemed to have come into force on 28 Ashad 2064 (11 July2007) and the other Sections on 1 Shrawan 2064 (17 July 2007).
29. Amendment to the Excise Duty Act, 2058 (2002) : Of the Excise Duty Act, 2058(2002):
(1) Of Section 2:
(a) The following clause (j) shall be substituted for clause (j):
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to production cost and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(b) The following clause (g) shall be substituted for Clause (g):
“(g) “production” means the manufacturing, making or preparing a product subject to excise duty, and this expression also includes re-packaging.”
(c) The following Clause (h1) shall be inserted after Clause
(h):
“(h1) “Tobacco product” means tobacco or cigarette containing mixtures of tobacco substance, pan parag, khaini or similar substance which is chewed or put in mouth and this expression also includes bidi, cigar etc.”
(d) The following Clauses (q), (r), (s), (t), (u) and (v) shall be inserted after Clause (k):
(q) “liquors” means any alcoholic substance prepared by fermenting any grains, fruits or any other stratchful substance or by other method, which has an alcoholic strength by volume of more than o.5 percent, and this expression includes liquors, spirit, country liquor (chhyang), whisky, rum, gin, brandy, vodka, beer, wine, sherry, cider, perry, mid, malt, industrial alcohol, rectified spirit, ENA and heads spirit.
(r) “ready-made liquors” means all kinds of alcoholic fluids prepared from mixtures with alcoholic strength by volume of less than 57.38 percent.
(s) “L.P. means the strength of pure ethanol in London proof.
(t) “L.P. liter” means the volume of 57.38 percent pure ethanol per liter.
(u) “U.P.” means the strength less than London proof.
(v) “O.P.” means the strength more than London proof.
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy and collect excise duty: (1) In manufacturing or producing and discharging from any enterprise, importing any goods or products set forth in the Schedule and selling services, the excise duty set forth in the Schedule shall be levied and recovered as follows:
(a) In the case of liquors, cigarette and beer, at the time of production and discharge from the enterprise;
(b) In the case of any product to be sold after producing the goods under the automatic discharge system and In the case of any service, after issue the invoice, the excise duty shall be paid within the Twenty Fifth day of the month.
Provided that, (d) In the case of exported vehicles for commercial purpose which are leviable to excise duty and the excise duty may be levied and recovered includes in local sale.
(d) In the case of exported vehicles for commercial purpose which are leviable to excise duty, at the time of sale and issuance of invoice;
(2) The excise duty paid on the purchase or import of any product or service for commercial purpose subject to excise duty may be deducted from the excise duty to be paid while selling such product or service.
(2) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(3) In the event of failure to pay the excise duty referred to in Sub-section (1) within the time limit, there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.
(3) The following Sections 3A., 3B. and 3C. shall be inserted after Section 3:
“3A. Not to levy excise duty on export from the Nepal: (1) No excise duty shall be levied on a product exported by an enterprise from the State of Nepal.
(2) For the purpose of Sub-section (1), there shall be furnished a cash deposit or bank guarantee for liquor, cigarette and beer while producing from the enterprise, subject to excise duty.
(3) The procedures for the release or refund of the cash deposit or bank guarantee as referred to in Sub- section (2) shall be as prescribed by the Department.
(4) If any goods manufactured or prepared within Nepal and already exported from Nepal are re-imported because of rejection by the concerned party or other reason, and the same goods are to be exported within Three months of the import, the goods may be released against the deposit of the excise duty leviable at the time of such return, and the deposit shall be refunded by the concerned Customs Office after the re-export of such goods.”
3B. Not to levy excise duty on sale by duty free shop:

(1) No excise duty shall be levied on any product sold by a bonded warehouse and duty free shop.
(2) For the purposes of Sub-section (1), there shall be furnished a cash deposit or bank guarantee for the amount of excise duty leviable while purchasing a product subject to excise duty.
(3) The procedures for the release or refund of the cash deposit or bank guarantee as referred to in Sub- section (2) shall be as prescribed by the Department.
3C. Obligation to pay excise duty: The following person shall have the duty to pay the excise duty under this Act:
(a) In the case of a product or service to be produced within the country, the producer or manufacturer thereof;
(b) In the case of a product to be imported, the person receiving the product as mentioned in the bill of lading;
(c) In the case of auction of a product subject to excise duty, the person taking over that product;
(d) In the event that a duty free product is resold or used for other purpose or is converted from a condition of being exempted from excise duty into a condition of being subject to excise duty, the person who has ownership of such product.”
(4) The following Sub-section (3) shall be inserted after Sub-section (2) of Section 4:
“(3) The Office may, at any time, examine the volume of alcohol and quality of liquors and other substance to be exported/produced by obtaining approval. Where the volume of alcohol is more than one percent or there is a significant deviation in the quality, the amount of controversy involved in the revenue leakage as well as additional sum that is Twenty Five percent of that amount shall be recovered.” (5) The following Section 4A. shall be inserted after Section 4 :
4A. Exemption from excise duty:

(1) In transferring any motor vehicles that were imported by any foreign mission or donor agency with the enjoyment of the diplomatic facility or tariff facility to the project itself in consonance with the approval annual program of the project and converting their number plates into governmental ones or in transferring, with the approval of the Ministry of Finance, any motor vehicles that were imported in the name of any project with the enjoyment of full or partial tariff facility (except those imported on inventory or bank guarantee) to any local body, community school, community hospital or governmental body after the completion of the project;
(2) If any diplomatic body, project or other body (governmental as well as non-governmental organization) intends to scrap and cancel the registration of any motor vehicle that it has imported with the enjoyment of the tariff facility and that is more than 15 years old after the year of initial production, with the approval of the Ministry of Finance, the excise duty shall not be levied on such a motor vehicle.
(3) If the owner of a motor vehicle imported for personal use with the enjoyment of partial customs tariff facility dies and the motor vehicle has to be transmitted to the husband or wife of the owner of motor vehicle, the excise duty shall not be levied on such a motor vehicle.
(6) Of Section 7:
(a) Of Sub-section (1):
(1) Of Clause (a),-
(a) The following Sub-clause (1) shall be substituted for Sub-clause (1):
“(1) the factory price which a manufacturer determines at the time of selling a product subject to excise duty, or”
(b) The following Sub-clause (1a) shall be inserted after Sub-clause (1):
“(1a) In the case of service, the price of the service at the time of selling it.”
(2) The words “the price set by also adding the customs duty to the price fixed” shall be substituted for the words “the price fixed” contained in Clause
(b).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The determination of the rate of recovery of the production of ethanol, spirit or E.N.A. required to be obtained from grains, molasses, spirit or E.N.A. to be used by an industry producing anhydrides, ethanol, rectified spirit or E.N.A. shall be as prescribed.
(5) Where it appears that the rate of production is less than the recovery rate prescribed under Sub-section
(4), it shall be deemed that higher quality liquors have been produced from such different quantity of ethanol, rectified spirit or E.N.A.”
(7) The following Sub-section (1) shall be substituted to Sub-section (1) of Section 8:
(1) No one shall manufacture, import, sell or store a product subject to excise duty or deliver service subject to excise duty to any other person, without obtaining the license pursuant to this Act or Rules made under this Act.
(8) The following proviso shall be inserted to Sub-section (2) of
Section 8: “Provided that, the excise duty license shall not be required for importing any products subject to excise duty under the diplomatic privilege on the recommendation of the Ministry
of Foreign Affairs.”
(9) The following proviso shall be inserted to Clause (d) of Sub- section (3) of Section 12:
“Provided that, such suspension shall not exceed seven days; and decision shall be made no later than sixty days after the making of such suspension.”
(10) The following Clauses (a), (b) and (c) shall be substituted for Clauses (a), (b) and (c) of Sub-section (1) of Section 14: “(a) Ten per cent of the amount in controversy to the informer,
(b) Twenty per cent of the amount in controversy to one who seizes and hands over a product only;
(c) Thirty per cent of the amount in controversy to one who arrests and hands over the person, along with the proof.
Provided that, in cases where the informer who gives information or clue be more than one person, the reward shall be divided between them pro rata.” (11) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, such person shall be punished with a fine from Five Thousand Rupees to Fifteen Thousand Rupees according to the gravity of offence:
(a) To sell or store any product subject to excise duty without obtaining the license;
(b) To provide any service subject to excise duty without obtaining the license;
(c) To violate this Act and the Rules framed under this Act.”
(12) The following Section 17A. Shall be inserted after Section 17:
“17A. Provision on payment by installment: Where any taxpayer makes a request in writing for payment of any
arrear excise duty in installment, permission may be given to pay the same in installments within one year.”
(13) The following Section 19 shall be substituted for Section 19:
“19. Appeal:

(1) An appeal may lie to the Revenue Tribunal against any decision made by the Excise Duty Officer pursuant to this Act.
(2) A person who makes an appeal pursuant to Sub-section (1) shall register a copy of the appeal with the Department no later than Fifteen days of making of the appeal.
(3) The implementation of the decision set forth in Sub-section (1) of Section 16 shall not be deemed to have been affected by the reason of making an appeal pursuant to Sub-section (1).”
The following Sub-section (1a) shall be inserted after Sub- section (1) of Section 23:
(1a) The taxpayer who makes an application pursuant to Sub- section (1) has to pay undisputed amount of excise duty and amount of fine, order to be recovered and furnish a cash deposit of One Third of the amount of excise duty in controversy and amount of fine.
(The following Section 23A. shall be inserted after Section 23:
“23A. To be levied the excise duty: There shall be levied the excise duty on the purchase, if any, The King, and members of the royal family of any product and service subject to excise duty.”The following Section 25A. Shall be inserted after Section 25:

“25A. Power to frame and issue manual: The Department may frame and issue necessary manuals, subject to this Act and the Rules framed under this Act.”  The word “release” shall be substituted for “export” contained in Clauses (a) and 11 of Sub-section (1) of Section 4: The word “Inland Revenue Office” shall be substituted for
“Excise Duty Office” contained in Sub-section (1) of Section 13, Sub-section (1) of Section 14 and Section 15. (19) The following Schedule shall be inserted in Excise Duty Act, 2058

 

 

(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may, as required and in consultation with the Customs Department, interpret and specify the harmonized codes of the products/goods on which excise duty is leviable.
(3) The amount of excise duty on the import of a motor vehicle may be deducted from the excise duty payable on the sale of that vehicle.
(4) The raw materials M.S. wire rod in coil under sub-heading No. 7213.91.10 of heading No. 7213 to be imported by an industry shall be exempted from excise duty.
(5) The Director General may, for statistical purposes, add a digit to the eight digit sub-heading for the purposes of the rate of excise duty.
(6) No local production of marble shall be subject to excise duty

 

Financial Act, 2065 (2008)
Date of Authentication and Publication
2065.6.3 (19 Nov. 2008)
An Act Made to Implement Proposals Relating to Finance of the Government of Nepal
Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal; Now, therefore, be it enacted by the Constitution Assembly pursuant to Sub-articles (1) of Article 83 of Interim Constitution of Nepal,2063 (2006).
1. Short title and commencement : (1) This Act may be called the “Financial Act, 2065 (2008).”
(2) This Act shall come into force immediately.

38. Amendment to the Excise Duty Act, 2058 (2002 ) : Of the Excise Duty Act, 2058 (2002):
(1) Of Section 2:
(a) The following clause (g) shall be substituted for clause (g):
“(g) “Production” means the act of manufacturing, making or preparing a product subject to excise duty.
(b) The following clause (h1) shall be inserted after clause
(h):
“(h1) “Tobacco product” means tobacco or cigarette containing mixtures of tobacco substance, pan parag, khaini or similar substance which is chewed or put in mouth, and this expression also includes cigarette, bidi, cigar etc.”
(c) The following clause (j) shall be substituted for clause (j):
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(d) The following clauses (o1), (o2), (o3), (o4), (o5), (o6), (o7), (o8) and (o9) shall be inserted after clause (o): (ol) “liquors” means any alcoholic substance prepared by fermenting any grains, fruits or any other stratchful substance or by other method, which has an alcoholic strength by volume of more than o.5 percent, and this expression includes liqueurs, spirit, country liquor, whisky, rum, gin, brandy, vodka, beer, wine, sherry, sampan, cider, perry, mid, malt, industrial alcohol, rectified spirit, malt spirit, ENA and heads spirit. (o2) “ready-made liquors” means all kinds of alcoholic fluids prepared from mixtures with alcoholic strength by volume of less than 57.06 percent.
(o3) “L.P” means the strength of pure ethanol in London proof.
(o4) “L.P. liter” means the volume of 57.06 percent pure ethanol per liter.
(05) “U.P.” means the strength less than London proof.
(06) “O.P.” means the strength more than London proof.
(07) “Physical control system” means the system of production, release, import and export of a product subject to excise duty under the control of the Excise Duty Officer or employee designated by him or her.
(08) “Self-release system” means the system of production, release, import and export of a product subject to excise duty other than that based on the physical control system.
(09) “Determination of excise duty” means the determination of excise duty made pursuant to this Act.
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy excise duty: In manufacturing or producing and discharging from any enterprise, importing any products or services subject to excise duty and selling any services, the excise duty as set forth in the Schedule shall be levied.”
(3) The following Sections 3A. and 3B. shall be inserted after Section 3:
“3A. Determination and recovery of excise duty: (1) The producer or manufacturer of goods or services subject to
excise duty shall be liable to determine and recover the excise duty under this Act. Provided that, the concerned Customs Office shall determine and recover the excise duty of the goods to be imported.
(2) If any product is subject to excise duty at the sale and distribution in addition to its production or importation, the importer or seller shall be liable to determine and recover the excise duty under this Act.
(3) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product.
(4) The excise duty paid on the purchase or import of any goods or services subject to excise duty for commercial purposes may be deducted from the excise duty payable while selling such goods or services.
(5) The excise duty paid on the goods damaged due to arson, theft, accident, disruptive act or expiration of date of goods may be deducted as specified by the Department.
3B. Not to levy excise duty:

(1) No excise duty shall be levied on any goods or services subject to excise duty pursuant to Section 3, in the following circumstances.
(a) If any goods or services are exported from Nepal or any goods other than liquors and cigarette are sold to a licensed bonded warehouse and duty free shop, on such goods or services.
Provided that, there shall be furnished a cash deposit or bank guarantee for the amount of excise duty leviable on such goods or service before selling to the duty free shop or in import.
(b) No excise duty shall be levied on the cigarette and liquors sold by the licensed bonded warehouse to any person or body enjoying diplomatic and tariff privilege, as recommended by the Government of Nepal, Ministry of Foreign Affairs. Provided that:
(1) Nothing contained herein shall bar the sale and distribution of goods by a bonded warehouse other than
cigarette and liquors, without charging excise duty.
(2) In importing any goods subject to excise duty to be sold by a bonded warehouse, there shall be furnished a
cash deposit or bank guarantee for the amount of excise duty leviable on such goods.
(2) The procedures for the release or refund of the cash deposit or bank guarantee as referred to in clause
(b) of sub-section (1) shall be as prescribed by the Department.
(3) If any goods manufactured or prepared within Nepal and already exported from Nepal are re- imported because of rejection by the concerned party or other reason, and the same goods are to be exported within Three months of the import, the goods may be released against the deposit of the excise duty leviable at the time of such return, and the deposit shall be refunded by the concerned Customs Office after the re-export of such goods.”
(4) The following Section 4 shall be substituted for Section 4:
“4. Recovery of excise duty: Except as otherwise provided in this Act, the excise duty shall be collected on the goods and services subject to excise duty pursuant to this Act as follows:
(a) In the case of goods basis on subject to the physical control system, at the time of production and discharge from the enterprise for sale;
(b) In the case of any product and service to be sold under the automatic discharge system, at the time of issue of invoice;
(c) In the case of goods to be imported, at the customs point at the time of entering of such goods into Nepal;
(d) In the case of exported vehicles for commercial purpose which are leviable to excise duty, at the time of sale and issuance of invoice;
(e) In the case of services to be imported, as prescribed by the Department.
(2) Notwithstanding anything contained in Sub- section (1), the Department may so prescribe, in the case of any goods or services, that the excise duty has to be collected at the time of production of such goods or delivery of such services.”
(5) The following Sections 4A., 4B., 4C. and 4D. shall be inserted after Section 4:
“4A. Obligation to pay excise duty: The following person shall be liable to pay the excise duty pursuant to this Act:
(a) In the case of a product or service to be produced within the country, the producer or manufacturer thereof;
(b) In the case of a product to be imported, the person receiving the product as mentioned in the bill of lading, airway bill.
(c) In the case of auction of a product subject to excise duty, the person taking over that product;
(d) In the event of resale of any goods, other than liquors and cigarette sold by a duty free shop or the use of such goods in other purpose, the person reselling or reusing them;
(e) In the event of conversion of goods from a condition of being exempted from excise duty into a condition of being subject to excise duty, the person who has ownership of such product;
(f) In the circumstances other than those set forth in Clauses (a) through (e), the person as specified by the Department.
4B. Time limit for payment of excise duty: (1) The excise duty recovered pursuant to this Act shall be paid as
follows:
(a) In the case of goods subject to the physical control system, at the time of discharge of such goods;
(b) In the case of any goods or services to be sold under the automatic discharge system, within the 25 th day of the month following the issue of invoice;
(c) In the case of goods to be imported, at the time of entering of such goods into Nepal;
(d) In the case of services to be imported, as prescribed by the Department.
(2) In the event of failure to pay the excise duty within the time limit as referred to in Clause (b) of Sub- section (1), there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.

4C. Exemption from excise duty:

(1) No excise duty shall be levied on any goods to be imported by a person or body enjoying diplomatic facility on the recommendation of the Ministry of Foreign Affairs.
(2) Notwithstanding anything contained in Sub- section (1), the excise duty shall also be exempted in the following circumstances:
(a) In transferring any motor vehicles that were imported by any foreign mission or donor agency with the enjoyment of the diplomatic facility or tariff facility to the project itself in consonance with the approval annual
programme of the project and converting their number plates into governmental ones or in transferring, with the approval of the Ministry of Finance, any motor vehicles that were imported in the name of any project with the enjoyment of full or partial tariff facility (except those imported on inventory or bank guarantee) to any local body,
community school, community hospital or governmental body after the completion of the project;
(b) If any diplomatic body (mission), project or other body (governmental as well as non- governmental organization) intends to scrap and cancel the registration of any motor vehicle that it has imported with the enjoyment of the tariff facility and that is more than Fifteen years old after the year of initial production, with the approval of the Ministry of Finance, the excise duty shall not be levied on such a motor vehicle.
(c) If the owner of a motor vehicle imported for personal use with the enjoyment of partial customs tariff facility dies and the motor vehicle has to be transmitted to the husband or wife of the owner of motor vehicle, the excise duty shall not be levied on such a motor vehicle.
4D. Control of sale and distribution: The Government of Nepal may, if it so considers necessary, control the sale and distribution of goods subject to excise duty and manage such sale and distribution as prescribed.”
(6) The following Section 7 shall be substituted for Section 7:
“7. Fixation of price of product or service subject to excise duty:

(1) In cases where the excise duty is to be levied on any product or service according to value (ad valorem), the excise duty shall be levied taking the following price as the basis
(a) The factory price which a manufacturer determines at the time of selling a product subject to excise
duty;
(b) In the case of service, the price of the service at the time of selling it; or
(c) The price specified by the Department on the basis of production/manufacturing cost.
(2) In respect of a product to be imported into Nepal, the excise duty shall be levied on the price fixed by adding the customs tariff on such a product to the price fixed for the purpose of collecting customs tariff.
(3) Excise duty on service shall be collected by fixing the price as per the invoice.
(4) For purposes of collecting excise duty, the Department may, as per necessity, re-fix the price or fix additional price.”
(7) The following Section 9 shall be substituted for Section 9:
“9. Provisions relating to license:

(1) No one shall manufacture, import, sell or store a product subject to excise duty or deliver service subject to excise duty to any other person, without obtaining the license pursuant to this Act or the Rules framed under this Act.
Provided that, no excise duty license is required to import the goods subject to excise duty under the diplomatic facility on the recommendation of the Ministry of Foreign Affairs.
(2) A person, firm, company or organization that intends to obtain the license referred to in sub-section (1) has to make an application to the Excise Duty Officer for the license, in such format and accompanied by such fee as prescribed.
(3) In cases where an application is made to the Excise Duty Officer for the license pursuant to Sub- section (2), the Department or the Excise Duty Officer designated by the Department shall issue the license in the prescribed format if it appears proper upon making necessary examination on such an application.
(4) The term of the license issued pursuant to Sub- section (3) shall remain valid until one Fiscal Year.
(5) A licensee who intends to obtain the renewal of license has to obtain the renewal within the month of Shrwan after the expiration of the period specified pursuant to Sub-section (4) by paying the fees as prescribed. Provided that, if any licensee so intends, the licensee may obtain the renewal by for three Fiscal Years by paying the renewal fees at the same time.
(6) A licensee who fails to obtain the renewal within the period as referred to in Sub-section (5) has to pay the fine of Twenty Five percent of the renewal fees for obtaining the renewal within the first Three months of the expiration of such a period, that of Fifty percent of the renewal fees for obtaining the renewal within Three months thereafter, that of Seventy Five percent of the renewal fees for obtaining the renewal within Three months thereafter and that of cent percent of the renewal fees for obtaining the renewal within the last day of the month of Ashad thereafter.
(7) If a licensee intends to obtain the renewal of license after the expiration of the period specified in Sub-
section (6), the licensee may obtain the renewal by paying the cent percent additional license fees for each Fiscal Year and due amounts, in addition to the license fees as prescribed.
(8) If any person does transaction without obtaining the license as referred to in Sub-section (1), the person shall not be exempted from the fees chargeable for the license and for its renewal.”
(8) The following Section 10. shall be substituted after Section 10:
10. Power to cancel license : The Department may cancel the license in the following circumstances:-
(a) In cases where the terms and conditions specified in the license are found violated,
(b) In cases where it appears to be contrary to public interest.
(c) Not to pay the leviable excise duty.
(9) The following Sections 10A., 10B., 10C., 10D., 10E., 10F., 10G., and 10H. shall be inserted after Section 10:
“10A. To furnish excise duty returns: A person who has obligation to determine and recover the excise pursuant to Section 3A. has to furnish the returns of transaction subject to excise duty for each month to the Excise Duty Officer or the prescribed excise duty returns by a registered post within Twenty Five days. Such returns have to be furnished irrespective of whether transaction subject to excise duty has been carried on in that month or not.

10B. To maintain accounts:

(1) A person who has obligation to furnish the excise duty returns pursuant to Section 10A. has to maintain accounts of the production and sale of goods or services subject to excise duty, of purchase, consumption of raw materials, subsidiary raw materials with specification of their price and quantity and of closing balance, along with the prescribed details, and shall provide such details as and when the Excise Duty Officer so demands for inspection.
(2) The accounts of purchase, production, release, sale and balance as referred to in Sub-section (1) shall be got certified by the concerned Excise Duty Officer and used for the purpose of maintaining accounts.
(3) The licensee has to safely retain the accounts of transaction for until Six years.
(4) For the implementation of this Act, the Excise Duty Officer may, by giving a notice in writing, seek information as to the transaction of goods and services subject to excise duty.

10C. Records processed by computer to be eligible as evidence:

(1) Notwithstanding contained in the laws in force, the records relating to excise duty of any person processed by the computer installed in the Department or offices thereunder or offices designated to administer the excise duty shall be eligible as evidence for purposes of excise duty, except as otherwise proved.
(2) The Department may so prescribe that the data relating to the goods or services subject to excise duty can be automatically retrieved by the Department or the office designated by the Department.
(3) The Department may make necessary arrangements on the submission of excise duty returns and payment of excise duty through electronic medium.”
10D. Power of Excise Duty Officer to determine excise duty:
(1) The Excise Duty Officer may determine the excise duty in any of the following circumstances:
(a) In the event of failure to submit the excise duty returns within the time limit,
(b) In the event of submission of incomplete or erroneous excise duty returns,
(c) In the event of submission of false excise duty returns,
(d) In the event of existence of a reliable ground for the Excise Duty Officer to believe that lesser amount of excise duty has been shown or the amount of excise duty is not accurate,
(e) Where there is a ground and reason for the Excise Duty Officer to believe that the sales price has been under-
invoiced and it is necessary to re- determine the price or to determine additional price pursuant to Sub- section (4) of Section 7,
(f) If the ceiling of production of goods or services subject to the excise duty is specified pursuant to or under this Act, the production ceiling is not met,
(g) If the difference between the liquors released and the alcohol content of waste material or substance if more than One percent,
(h) In the event of evasion of excise duty,
(i) If any person does transaction of goods subject to excise duty without obtaining the license. Provided that, except in the condition of Clause (c) and (h), excise duty shall be assessed within Four years from the date of submission of the details of excise duty.
(2) In determining the excise duty pursuant to Sub- section (1), the Excise Duty Officer shall give a time-limit of Fifteen days to the concerned person to defend him/herself.
(3) The Department may make monitoring of the determination of excise duty made pursuant to Sub-section
(1). If any error is found upon monitoring, the Department may order the re-determination of excise duty.
(4) The Excise Duty Officer shall have the following powers for the purposes of determination of excise duty pursuant to Sub-section (1) or examination of the excise duty returns submitted duty pursuant to Section
10A.:
(a) To examine the goods, places, documents, accounts and records related with the liability of excise
duty,
(b) To search the place of transaction of any person or other places where evidences related with the acts
deemed offence under this Act can be found,
(c) To seek information from the persons who prepare any records, books, accounts and documents or fill up
details therein in the course of discharge of their duty,
(d) To take possession of or take elsewhere any documents, books and records situated in the place of
transaction of goods and services subject to excise duty or other place related thereto,
(e) To make audit of excise duty in the place of transaction or office or other appropriate place,
(f) The Excise Duty Officer may seek information of any matter from a bank or financial institution or any person
in relation to the transaction of goods and services subject to excise duty.
(5) It shall be the duty of such a bank and financial institution or person to give information as sought by the Excise Duty Officer pursuant to this Section.

10E. Power to have expert’s service: The Department may obtain the service of liquor export, brewing expert, chemical expert and other expert, as required, for the effective implementation of this Act.

10F. Power to specify ceiling of production of goods and services subject to excise duty:

(1) The rate of production ceiling of ethanol, spirit or ENA required to be obtained from grains, molasses or Khudo used by an industry producing Anhydrous ethanol, rectified spirit or ENA shall be determined in accordance with the procedures as prescribed.
(2) If it appears that the production is less than the rate of ceiling prescribed pursuant to Sub-section (1), the production of highest quality liquors to be produced by the industry shall be deemed to have been made from the ethanol, spirit or ENA in such different quantity.
(3) The Department may specify the rate of ceiling of production of other goods and services subject to excise duty.

10G. To test the volume of alcohol: The Excise Duty Officer may at any time test or examine the content of alcohol of
he liquors discharged with approval and of the waste substance and quality thereof. The alcohol content shall not be different more than One percent or quality shall not be altered significantly.

10H. Recovery of due excise duty: If any person does not pay the excise duty to be paid within the time limit as referred to in this Act, the concerned Excise Duty Officer my recover the same by way of any or all of the following measures:
(a) Deducting the amount, if any, refundable to such a person,
(b) By having deduction of such amount from the amount payable by the Government of Nepal or any corporate body owned by the Government of Nepal or local body to such a person,
(c) By having deduction of such amount from the interest of such a person in a bank, financial institution or other institution, Explanation : For the purposes of this Clause, the term ‘interest” includes deposits and investments held in a bank, financial or other institution.
(d) By withholding the sale, export, import and other business by and of such a person,
(e) By seizing the movable and immovable property of such a person,
(f) By auction selling any or all of the movable and immovable properties of such person at one time or at different times as prescribed.
(10) The word “release” shall be substituted for the work “export” contained in Section 11.
(11) The following provision shall be inserted in Clause (d) of Sub- section (3) of Section 12: “Provided that, such suspension shall not exceed seven days; and decision shall be made no later than Sixty days after the making of such suspension.” (12) Of Section 13,
(a) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in various places of Sub-section (1).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The Department may give an information incentive expense of a maximum of Ten Thousand Rupees as prescribed to a person who provides information of the offence as referred to in this Section.
(5) The details of the person giving information of offence pursuant to this Section shall be kept secret.”
(13) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in various places of Sub- section (1) of Section 14 and the following Clauses (a), (b) and
(c) shall be substituted for Clauses (a), (b) and (c) of the same Sub-section:
“(a) Ten per cent of the amount in controversy to the informer,
(b) Twenty per cent of the amount in controversy to one who seizes and hands over a product only;
(c) Thirty per cent of the amount in controversy to one who arrests and hands over the person, along with the proof. Provided, however, that in cases where the informer who gives information or clue be more than one person, the reward shall be divided between them pro rata.”
(14) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in Section 15:
(15) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, the Excise Duty Officer may punish such a person with a fine as follows:
(a) In the event of re-determination of the price or determination of additional price pursuant to Sub-section (4) of Section 7, cent percent amount of the amount of excise duty to be added,
(b) In the event of making sale or storage of goods or services subject to excise duty without obtaining the license, from Five Thousand Rupees to Fifteen Thousand Rupees.
(c) In the event of violation of the provision of Section 10A., the amount of 0.05 percent of the leviable excise duty per day or One Thousand Rupees for each return, whichever is the higher.
(d) In the event of failure to maintain updated accounts as referred to ins Sub-section (1) of Section 10B., Ten Thousand Rupees and Five Thousand Rupees for each instance in the event of no allowing the accounts of transactions to be inspected,
(e) In the event of violation of Sub-section (2) of Section 10B., upto Five Thousand Rupees,
(f) In the event of violation of Sub-section (3) of Section 10B., Ten Thousand Rupees,
(g) In the event of obstruction in the act as referred to in Sub-section (3) of Section 10D., Five Thousand Rupees for each instance,
(h) If, upon examination pursuant to Section 10G., the difference between the liquors released and the alcohol content of waste material or substance is more than One percent, cent percent of the amount of revenue leaked,
(i) If the ceiling of production of goods or services subject to the excise duty is specified and the production ceiling is not met, cent percent of the amount of excise duty to be added,
(j) In the event of violation of Section 4B., Ten Thousand Rupees for each instance,
(k) In the event of violation of this Act or the Rules framed under this Act, One Thousand Rupees for each instance.
(16) The following Section 17A. shall be inserted after Section 17:
“17A. Provision on payment by installment: Where any taxpayer makes a request in writing for the payment of any arrear excise duty by installment, permission may be given to pay the same by installment for One year.” (17) The following Section 19 shall be substituted for Section 19:
“19. Provisions relating to administrative review and appeal:

(1) A person who is not satisfied with any decision by the Excise Duty Officer of excise duty assessment and recovery thereof may make an application for administrative review to the Department against the decision within Thirty days of the date of receipt of a notice of that decision. Provided that a person may make an appeal in the Revenue Tribunal against the decision of punishment of imprisonment for any offences as referred to in Sub- sections (1), (2), (3) and (4) of Section 16. (2) In cases where the time limit for making application pursuant to Sub-section (1) expires and any person makes an application for the extension of time limit within Seven days from the date of expiration of the time limit, the Department may extend the time limit for a period not exceeding Thirty days from the date of
expiration of the time limit.
(3) If the claim of the applicant appears to be true upon examining the evidence and documents including the application made by the taxpayer pursuant to Sub-section
(1), the Director General may, by executing a memorandum setting out the clear reasons, void that excise duty assessment order and direct the concerned Excise Duty Officer to make re-assessment of excise duty.
(4) The Department shall make decision on the application within Sixty days after the date of making of application pursuant to Sub-section (1).
(5) The taxpayer who makes an application pursuant to sub-section (1) has to pay undisputed amount of excise duty and amount of fine, out of the amount of excise duty assessed, and furnish a cash deposit of One Third of the amount of excise duty in controversy and amount of fine.
(6) If the Department does not give decision within the time limit as referred to in Sub-section (4), the concerned person may appeal in the Revenue Tribunal.
(7) A person who makes an application for administrative review or an appeal pursuant to this Section shall register a copy of the application or appeal with the concerned Office no later than Fifteen days.
(8)The implementation of the decision set forth in sub-section (1) of Section 16 shall not be deemed to have
been affected by the reason of making an application for administrative review or appeal appeal pursuant to sub- section (1).”
(18) The following Section 23 shall be substituted for Section 23:
“23. Department to be responsible for implementation and administration: The Department shall be responsible for the implementation and administration of this Act.”
(19) The following Section 25A. Shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.”
(20) Section 8 shall be repealed.
(23) The following Schedule shall be inserted in the Excise Duty Act, 2058 (2002)

 

 

Note:

(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on the chassis of ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may, as required and in consultation with the Customs Department, interpret and specify the harmonized codes of the products/goods on which excise duty is leviable.
(3) The amount of excise duty on the import of a motor vehicle may be deducted from the excise duty payable on the sale of that vehicle.
(4) Exemption of excise duty shall be granted, on the recommendation of the Department of Industries, to the raw maters imported by industries and used to produce goods as referred to in sub-heading 7213.91.10 of heading 7213.
(5) The Director General may, for statistical purposes, add a digit to the eight digit sub-heading for the purposes of the rate of excise duty.
(6) In the event of cocktail of any liquors, the rate of tariff set forth in serial number 10 shall be applicable.
(7) No local production of marble shall be subject to excise duty.
(8) excise duty shall be levied on the goods of personal use imported enjoying the customs duty exemption facility under the Luggage and Baggage Order Facility

Financial Act, 2066 (2010)
Date of Authentication and Publication
2066.3.29 (13 July 2009)
An Act Made to Implement Proposals Relating to Finance of the Government of Nepal

Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal; Now, therefore, be it enacted by the Constitution Assembly pursuant to Sub-articles (1) of Article 83 of Interim Constitution of Nepal,2063 (2007).
1. Short title and commencement : (1) This Act may be called the “Financial Act, 2067 (2010).” (2) Sections 1, 2, 3, 4, 5 and 10 of this Act shall be deemed to have come into force immediately and the other Sections on 1 Shrwan 2066(17 July 2009).

30. Amendment to the Excise Duty Act, 2058 (2002 ): Of the Excise Duty Act, 2058(2002):
(1) Of Section 2: (a) The following Clause (g) shall be substituted for Clause
(g):

“(g) “Production” means the act of manufacturing, making or preparing a product subject to excise duty.
(b) The following Clause (h1) shall be inserted after Clause
(h):

“(h1) “Tobacco product” means tobacco or cigarette containing mixtures of tobacco substance, pan parag, khaini or similar substance which is chewed or put in mouth, and this expression also includes cigarette, bidi, cigar etc.”
(c) The following Clause (j) shall be substituted for Clause (j):
“(j) “factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(d) The following Sub-clause (3) shall be substituted for Sub- clause (3) of Clause (k):
“(3) price fixed as per Sub-section (2) of Section 7, in the case of a product to be imported.”
(e) The following Clauses (o1), (o2), (o3), (o4), (o5), (o6), (o7), (o8) and (o9) shall be inserted after Clause (o):
(ol) “liquors” means any alcoholic substance prepared by fermenting any grains, fruits or any other stratchful substance or by other method, which has an alcoholic strength by volume of more than o.5 percent, and this expression includes liqueurs, spirit, country liquor, whisky, rum, gin, brandy, vodka, beer, wine, sherry, sampan, cider, perry, mid, malt, industrial alcohol, rectified spirit, malt spirit, ENA and heads spirit.
(o2) “ready-made liquors” means all kinds of alcoholic fluids prepared from mixtures with alcoholic strength by volume of less than 57.06 percent.
(o3) “L.P” means the strength of pure ethanol in London proof.
(o4) “L.P. liter” means the volume of 57.06 percent pure ethanol per liter.
(05) “U.P.” means the strength less than London proof.
(06) “O.P.” means the strength more than London proof.
(07) “Physical control system” means the system of production, release, import and export of a product subject to excise duty under the control of the Excise Duty Officer or employee designated by him or her.
(08) “Self-release system” means the system of production, release, import and export of a product subject to excise duty other than that based on the physical control system.
(09) “Determination of excise duty” means the determination of excise duty made pursuant to this
Act.
(2) The following Section 3 shall be substituted for Section 3:
“3. To levy excise duty: In manufacturing or producing and
discharging from any enterprise, importing any products or
services subject to excise duty and selling any services, the
excise duty as set forth in the Schedule shall be levied.”
(3) The following Sections 3A. and 3B. shall be inserted after
Section 3:
“3A. Determination and recovery of excise duty:

(1) The producer or manufacturer of goods or services subject to excise duty shall be liable to determine and recover the excise duty under this Act. Provided that, the concerned Customs Office shall determine and recover the excise duty of the goods to be imported.
(2) If any product is subject to excise duty at the sale and distribution in addition to its production or importation, the importer or seller shall be liable to determine and recover the excise duty under this Act.
(3) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product. Provided that, the excise duty paid by any industry subject to the self-release system on the purchase or import of raw materials may be deducted from the excise duty payable while selling the finished product.
(4) The excise duty paid on the purchase or import of any goods or services subject to excise duty for commercial purposes may be deducted from the excise duty payable while selling such goods or services.
(5) The excise duty paid on the goods damaged due to arson, theft, accident, disruptive act or expiration of date of goods may be deducted as specified by the Department.

3B. Not to levy excise duty:

(1) No excise duty shall be levied on any goods or services subject to excise duty pursuant to Section 3, in the following circumstances.
(a) If any goods or services are exported from Nepal or any goods other than liquors and cigarette are sold to a licensed bonded warehouse and duty free shop, on such goods or services.
(b) No excise duty shall be levied on the cigarette and liquors sold by the licensed bonded warehouse to any person or body enjoying diplomatic and tariff privilege, as recommended by the Government of Nepal, Ministry of Foreign Affairs. Provided that:
(1) Nothing contained herein shall bar the sale and distribution of goods by a bonded warehouse other than cigarette and liquors, without charging excise duty.
(2) In importing any goods subject to excise duty to be sold by a bonded warehouse, there shall be furnished a cash deposit or bank guarantee for the amount of excise duty leviable on such goods.
(2) The procedures for the release or refund of the cash deposit or bank guarantee as referred to in Clause
(b) of Sub-section (1) shall be as prescribed by the Department.
(3) If any goods manufactured or prepared within Nepal and already exported from Nepal are re- imported because of rejection by the concerned party or other reason, and the same goods are to be exported within Three months of the import, the goods may be released against the deposit of the excise duty leviable at the time of such return, and the deposit shall be refunded by the concerned Customs Office after the re-export of such goods.”
(4) The following Section 4 shall be substituted for Section 4: “4. Recovery of excise duty: Except as otherwise provided in this Act, the excise duty shall be collected on the goods and services subject to excise duty pursuant to this Act as follows:
(a) In the case of goods produced by an industry subject to the physical control system, at the time of production and discharge from the enterprise for sale;
(b) In the case of any product and service to be sold under the automatic discharge system, at the time of issue of invoice;
(c) In the case of goods to be imported, at the customs point at the time of entering of such goods into Nepal;
(d) In the case of services to be imported, as
prescribed by the Department. (2) Notwithstanding anything contained in Sub-section
(1), the Department may so prescribe, in the case of any goods or services, that the excise duty has to be collected at the time of production of such goods or delivery of such services.”
(5) The following Sections 4A., 4B., 4C. and 4D. shall be inserted after Section 4:
“4A. Obligation to pay excise duty: The following person shall be liable to pay the excise duty pursuant to this Act:
(a) In the case of a product or service to be produced within the country, the producer or manufacturer
thereof;
(b) In the case of a product to be imported, the person receiving the product as mentioned in the bill of lading, airway bill.
(c) In the case of auction of a product subject to excise duty, the person taking over that product;
(d) In the event of resale of any goods, other than liquors and cigarette sold by a duty free shop or the use of such goods in other purpose, the person reselling or reusing them;
(e) In the event of conversion of goods from a condition of being exempted from excise duty into a condition of being subject to excise duty, the person who has ownership of such product;
(f) In the circumstances other than those set forth in Clauses (a) through (e), the person as specified by the Department.

4B. Time limit for payment of excise duty:

(1) The excise duty recovered pursuant to this Act shall be paid as follows:
(a) In the case of goods subject to the physical control system, at the time of discharge of such goods;
(b) In the case of any goods or services to be sold under the automatic discharge system, within the 25 th day of the month following the issue of invoice;
(c) In the case of goods to be imported, at the time of entering of such goods into Nepal;
(d) In the case of services to be imported, as prescribed by the Department.
(2) In the event of failure to pay the excise duty within the time limit as referred to in Clause (b) of Sub- section (1), there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.

4C. Exemption from excise duty:

(1) No excise duty shall be levied on any goods to be imported by a person or body enjoying diplomatic facility on the recommendation of the Ministry of Foreign Affairs.
(2) Notwithstanding anything contained in Sub- section (1), the excise duty shall also be exempted in the following circumstances:
(a) In transferring any motor vehicles that were imported by any foreign mission or donor agency with the enjoyment of the diplomatic facility or tariff facility to the project itself in consonance with the approval annual
programme of the project and converting their number plates into governmental ones or in transferring, with the approval of the Ministry of Finance, any motor vehicles that were imported in the name of any project
with the enjoyment of full or partial tariff facility (except those imported on inventory or bank guarantee) to any local body, community school, community hospital or governmental body after the completion of the project;
(b) If any diplomatic body (mission), project or other body (governmental as well as non- governmental organization) intends to scrap and cancel the registration of any motor vehicle that it has imported with the enjoyment of the tariff facility and that is more than Fifteen years old after the year of initial production, with the approval of the Ministry of Finance, the excise duty shall not be levied on such a motor vehicle.
(c) If the owner of a motor vehicle imported for personal use with the enjoyment of partial customs tariff facility dies and the motor vehicle has to be transmitted to the husband or wife of the owner of motor vehicle, the excise duty shall not be levied on such a motor vehicle.

4D. Control of sale and distribution: The Government of Nepal may, if it so considers necessary, control the sale and distribution of goods subject to excise duty and manage such sale and distribution as prescribed.”
(6) The following Section 7 shall be substituted for Section 7:
“7. Fixation of price of product or service subject to excise duty:

(1) In cases where the excise duty is to be levied on any product or service according to value (ad valorem), the excise duty shall be levied taking the following price as the basis:-
(a) The factory price which a manufacturer determines at the time of selling a product subject to excise duty;
(b) In the case of service, the price of the service at the time of selling it; or
(c) The price specified by the Department on the basis of production/ manufacturing cost.
(2) In respect of a product to be imported into Nepal, the excise duty shall be levied on the price fixed by adding the customs tariff on such a product to the price fixed for the purpose of collecting customs tariff.
(3) Excise duty on service shall be collected by fixing the price as per the invoice.
(4) For purposes of collecting excise duty, the Department may, as per necessity, re-fix the price or fix additional price.”
(7) The following Section 9 shall be substituted for Section 9:
“9. Provisions relating to license:

(1) No one shall manufacture, import, sell or store a product subject to excise duty or deliver service subject to excise duty to any other person, without obtaining the license pursuant to this Act or the Rules framed under this Act. Provided that, no excise duty license is required to manufacture, import, sell or store a product subject to excise duty or deliver service subject to excise duty by an industry subject to automatic release system, except the manufacturing of bricks, stone crusher, bidi, tobacco, khaini, pan masala, gudkha, khandsari industry and import of molasses and Gund and import of goods subject to excise duty under the diplomatic facility on the recommendation of the Ministry of Foreign Affairs.

(2) A person, firm, company or organization that intends to obtain the license referred to in Sub-section (1) has to make an application to the Excise Duty Officer for the license, in such format and accompanied by such fee as prescribed.
(3) In cases where an application is made to the Excise Duty Officer for the license pursuant to Sub- section (2), the Department or the Excise Duty Officer designated by the Department shall issue the license in the prescribed format if it appears proper upon making necessary examination on such an application.
(4) The term of the license issued pursuant to Sub- section (3) shall remain valid until one Fiscal Year.
(5) A licensee who intends to obtain the renewal of license has to obtain the renewal within the month of Shrawan after the expiration of the period specified pursuant to Sub-section (4) by paying the fees as prescribed. Provided that, if any licensee so intends, the licensee may obtain the renewal by for three Fiscal Years by paying the renewal fees at the same time.
(6) A licensee who fails to obtain the renewal within the period as referred to in Sub-section (5) has to pay the fine of Twenty Five percent of the renewal fees for obtaining the renewal within the first Three months of the expiration of such a period, that of Fifty percent of the renewal fees for obtaining the renewal within Three months thereafter, that of Seventy Five percent of the renewal fees for obtaining the renewal within Three months thereafter and that of cent percent of the renewal fees for obtaining the renewal within the last day of the month of Ashad thereafter.
(7) If a licensee intends to obtain the renewal of license after the expiration of the period specified in Sub- section (6), the licensee may obtain the renewal by paying the cent percent additional license fees for each Fiscal Year and due amounts, in addition to the license fees as prescribed.
(8) If any person does transaction without obtaining the license as referred to in Sub-section (1), the person shall not be exempted from the fees chargeable for the license and for its renewal.”
(8) The following Section 10. shall be substituted after Section 10:
10. Power to cancel license : The Department may cancel the license in the following circumstances:-
(a) In cases where the terms and conditions specified in the license are found violated,
(b) In cases where it appears to be contrary to public interest.
(c) Not to pay the leviable excise duty.
(9 ) The following Sections 10A., 10B., 10C., 10D., 10E., 10F.,
10G., 10H. and 10I shall be inserted after Section 10:
“10A. To furnish excise duty returns: A person who has obligation to determine and recover the excise pursuant to
Section 3A. has to furnish the returns of transaction subject to excise duty for each month to the Excise Duty Officer or the prescribed excise duty returns by a registered post within Twenty Five days. Such returns have to be furnished irrespective of whether transaction subject to excise duty has been carried on in that month or not.

10B. To maintain accounts:

(1) A person who has obligation to furnish the excise duty returns pursuant to Section 10A. has to maintain accounts of the production and sale of goods or services subject to excise duty, of purchase, consumption of raw materials, subsidiary raw materials with specification of their price and quantity and of closing balance, along with the prescribed details, and shall provide such details as and when the Excise Duty Officer so demands for inspection.
(2) The accounts of purchase, production, release, sale and balance as referred to in Sub-section (1) shall be got certified by the concerned Excise Duty Officer and used for the purpose of maintaining accounts.
(3) The licensee has to safely retain the accounts of transaction for until Six years.
(4) For the implementation of this Act, the Excise Duty Officer may, by giving a notice in writing, seek information as to the transaction of goods and services subject to excise duty.

10C. Records processed by computer to be eligible as evidence:

(1) Notwithstanding contained in the laws prevailing, the records relating to excise duty of any person processed by the computer installed in the Department or offices thereunder or offices designated to administer the excise duty shall be eligible as evidence for purposes of excise duty, except as otherwise proved.
(2) The Department may so prescribe that the data relating to the goods or services subject to excise duty can be automatically retrieved by the Department or the office designated by the Department.
(3) The Department may make necessary arrangements on the submission of excise duty returns and payment of excise duty through electronic medium.”

10D. Power of Excise Duty Officer to determine excise duty:
(1) The Excise Duty Officer may determine the excise duty in any of the following circumstances:
(a) In the event of failure to submit the excise duty returns within the time limit,
(b) In the event of submission of incomplete or erroneous excise duty returns,
(c) In the event of submission of false excise duty returns,
(d) In the event of existence of a reliable ground for the Excise Duty Officer to believe that lesser amount of excise
duty has been shown or the amount of excise duty is not accurate,
(e) Where there is a ground and reason for the Excise Duty Officer to believe that the sales price has been under-
invoiced and it is necessary to re- determine the price or to determine additional price pursuant to Sub-
section (4) of Section 7,
(f) If the ceiling of production of goods or services subject to the excise duty is specified pursuant to or under this
Act, the production ceiling is not met,
(g) If the difference between the liquors released and the alcohol content of waste material or substance if more
than One percent,
(h) In the event of evasion of excise duty,
(i) If any person does transaction of goods subject to excise duty without obtaining the license. Provided that, except in the condition of Clause (c) and (h), excise duty shall be assessed within Four years from the date of submission of the details of excise duty.
(2) In determining the excise duty pursuant to Sub- section (1), the Excise Duty Officer shall give a time-limit
of Fifteen days to the concerned person to defend him/herself.
(3) The Department may make monitoring of the determination of excise duty made pursuant to Sub-section
(1). If any error is found upon monitoring, the Department may order the redetermination of excise duty.
(4) The Excise Duty Officer shall have the following powers for the purposes of determination of excise duty pursuant to Sub-section (1) or examination of the excise duty returns submitted duty pursuant to Section

10A.:
(a) To examine the goods, places, documents, accounts and records related with the liability of excise duty,
(b) To search the place of transaction of any person or other places where evidences related with the acts deemed offence under this Act can be found,
(c) To seek information from the persons who prepare any records, books, accounts and documents or fill up
details therein in the course of discharge of their duty,
(d) To take possession of or take elsewhere any documents, books and records situated in the place of transaction of goods and services subject to excise duty or other place related thereto,
(e) To make audit of excise duty in the place of transaction or office or other appropriate place,
(f) The Excise Duty Officer may seek information of any matter from a bank or financial institution or any person
in relation to the transaction of goods and services subject to excise duty.
(5) It shall be the duty of such a bank and financial institution or person to give information as sought by the Excise Duty Officer pursuant to this Section.

10E. Power to have expert’s service: The Department may obtain the service of liquor export, brewing expert, chemical expert and other expert, as required, for the effective implementation of this Act.

10F. Power to specify ceiling of production of goods and services subject to excise duty:

(1) The rate of production ceiling of ethanol, spirit or ENA required to be obtained from grains, molasses or Khudo used by an industry producing Anhydrous ethanol, rectified spirit or ENA shall be determined in accordance with the procedures as prescribed.
(2) If it appears that the production is less than the rate of ceiling prescribed pursuant to Sub-section (1), the production of highest quality liquors to be produced by the industry shall be deemed to have been made from the ethanol, spirit or ENA in such different quantity.
(3) The Department may specify the rate of ceiling of production of other goods and services subject to excise duty.

10G. To test the volume of alcohol: The Excise Duty Officer may at any time test or examine the content of alcohol of
the liquors discharged with approval and of the waste substance and quality thereof. The alcohol content shall not be different more than One percent or quality shall not be altered significantly.

10H. Recovery of due excise duty: If any person does not pay the excise duty to be paid within the time limit as referred to in this Act, the concerned Excise Duty Officer my recover the same by way of any or all of the following
measures:
(g) Deducting the amount, if any, refundable to such a person,
(h) By having deduction of such amount from the amount payable by the Government of Nepal or any corporate body owned by the Government of
Nepal or local body to such a person,
(i) By having deduction of such amount from the interest of such a person in a bank, financial institution or other institution, Explanation : For the purposes of this Clause, the term ‘interest” includes deposits and investments
held in a bank, financial or other institution.
(j) By withholding the sale, export, import and other business by and of such a person,
(k) By seizing the movable and immovable property of such a person,
(l) By auction selling any or all of the movable and immovable properties of such person at one time or
at different times as prescribed.

10I. Delay fee: In the event of failure of a person to pay the excise duty within the time limit as referred to in this Act after the determination of the excise duty or for any other reason, except a circumstance as referred to in Clause (a) of Sub-section (1) of Section 4, there shall be charged a delay fee by 0.05 percent on the due and payable amount of excise duty per day.”
(10) The word “release” shall be substituted for the work “export” contained in Section 11.
(11) The following proviso shall be inserted in Clause (d) of Sub- section (3) of Section 12: “Provided that such suspension shall not exceed seven days; and decision shall be made no later than Sixty days after the making of such suspension.” (12) Of Section 13,
(a) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in various
places of Sub-section (1).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The Department may give an information incentive expense of a maximum of Ten Thousand Rupees as prescribed to a person who provides information of the offence as referred to in this Section.
(5) The details of the person giving information of offence pursuant to this Section shall be kept secret.”
(13) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in various places of Sub- section (1) of Section 14 and the following Clauses (a), (b) and (c) shall be substituted for Clauses (a), (b) and (c) of the same Sub-section:
“(a) Ten per cent of the amount in controversy to the informer,
(b) Twenty per cent of the amount in controversy to one who seizes and hands over a product only;
(c) Thirty per cent of the amount in controversy to one who arrests and hands over the person, along with the proof.
Provided that, in cases where the informer who gives information or clue be more than one person, the reward shall be divided between them pro rata.”
(14) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in Section 15:
(15) Of Section 16:
(a) The following Clause (b) shall be substituted for Clause
(b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) where any person commits any of the following offences, the Excise Duty Officer may punish such a person with a fine as follows:
(l) In the event of re-determination of the price or determination of additional price pursuant to Sub-section (4) of Section 7, cent percent amount of the amount of excise duty to be added,
(m) In the event of making sale or storage of goods or services subject to excise duty without obtaining the license, from Five Thousand Rupees to Fifteen Thousand Rupees.
(n) In the event of violation of the provision of Section 10A., the amount of 0.05 percent of the leviable excise duty per day or One Thousand Rupees for each return, whichever is the higher.
(o) In the event of failure to maintain updated accounts as referred to ins Sub-section (1) of Section 10B., Ten Thousand Rupees and Five Thousand Rupees for each instance in the event of no allowing the accounts of transactions to be inspected,
(p) In the event of violation of Sub-section (2) of Section 10B., upto Five Thousand Rupees,
(q) In the event of violation of Sub-section (3) of Section 10B., Ten Thousand Rupees,
(r) In the event of obstruction in the act as referred to in Sub-section (3) of Section

10D., Five Thousand Rupees for each instance,

(s) If, upon examination pursuant to Section
10G., the difference between the liquors released and the alcohol content of waste material or substance is more than One percent, cent percent of the amount of revenue leaked,

(t) If the ceiling of production of goods or services subject to the excise duty is specified and the production ceiling is not met, cent percent of the amount of excise
duty to be added,
(u) In the event of violation of Section 4B., Ten
Thousand Rupees for each instance,
(v) In the event of violation of this Act or the Rules framed under this Act, One Thousand Rupees for each instance.
(16) The following Section 17A. shall be inserted after Section 17:
“17A. Provision on payment by installment: Where any taxpayer makes a request in writing for the payment of any arrear excise duty by installment, permission may be given to pay the same by installment for One year.”
(17) The following Section 19 shall be substituted for Section 19:
“19. Provisions relating to administrative review and appeal:

(1) A person who is not satisfied with any decision by the Excise Duty Officer of excise duty assessment and recovery thereof may make an application for administrative review to the Department against the decision within Thirty days of the date of receipt of a notice of that decision. Provided that, a person may make an appeal in the Revenue Tribunal against the decision of punishment of imprisonment for any offences as referred to in Sub- sections (1), (2), (3) and (4) of Section 16. (2) In cases where the time limit for making application pursuant to Sub-section (1) expires and any person makes an application for the extension of time limit within Seven days from the date of expiration of the time limit, the Department may extend the time limit for a period not exceeding Thirty days from the date of expiration of the time limit.
(3) If the claim of the applicant appears to be true upon examining the evidence and documents including the application made by the taxpayer pursuant to Sub-section
(1), the Director General may, by executing a memorandum setting out the clear reasons, void that excise duty assessment order and direct the concerned Excise Duty Officer to make re-assessment of excise duty.
(4) The Department shall make decision on the application within Sixty days after the date of making of application pursuant to Sub-section (1).
(5) The taxpayer who makes an application pursuant to Sub-section (1) has to pay undisputed amount of excise duty and amount of fine, out of the amount of excise duty assessed, and furnish a cash deposit of One Third of the amount of excise duty in controversy and amount of fine.
(6) If the Department does not give decision within the time limit as referred to in Sub-section (4), the concerned person may, after the expiration of that time- limit, make an appeal to the Revenue Tribunal or if the person is not satisfied with the decision made by the Department, the person may make such an appeal in the
Revenue Tribunal within Thirty Five days after the date of receipt of notice of the decision.
(7) A person who makes an application for administrative review or an appeal pursuant to this Section shall register a copy of the application or appeal with the concerned Office no later than Fifteen days.
(8) The implementation of the decision set forth in Sub-section (1) of Section 16 shall not be deemed to have been affected by the reason of making an application for administrative review or appeal pursuant to Sub-section (1).”
(18) The following Section 22A. shall be inserted after Section 22:
“22A. Deemed to be excise duty: Any charge, delay fee or fine
imposable pursuant to this Act shall be deemed to be the excise duty imposable pursuant to this Act.” (19) The following Section 23 shall be substituted for Section 23:
“23. Department to be responsible for implementation and administration: The Department shall be responsible for
the implementation and administration of this Act.”
(20) The following Section 25A. shall be inserted after Section 25:
“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.”
The following Schedule shall be inserted in the Excise Duty Act, 2058 (2002):

 

 

 

Note:
(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on the chassis of ambulances, corpse carrying vehicles and battery tempos.
(2) The Department may, as required and in consultation with the Customs Department, interpret and specify the harmonized codes of the products/goods on which excise duty is leviable.
(3) The procedures of collection of the excise duty leviable on the motor vehicles purchased and in stock until Fiscal Year 2065/066 shall be as mentioned in the Finance Act, 2065.
(4) Exemption of excise duty shall be granted, on the recommendation of the Department of Industries, to the raw
maters imported by industries and used to produce goods as referred to in sub-heading 7213.91.10 of heading 72.13.
(5) The Director General may, for statistical purposes, add a digit to the eight digit sub-heading for the purposes of the rate of excise duty.
(6) In the event of cocktail of any liquors, the rate of tariff set forth in serial number 10 shall be applicable.
(7) Prepared liquors of 70 UP strength may be made by using rectified spirit of serial number 16 only.
(8) No local production of marble shall be subject to excise duty.
(9) Excise duty shall be levied on the goods of personal use imported enjoying the customs duty exemption facility under the Luggage and Baggage Order Facility.
(10) Fifteen Percent Excise duty shall be levied to the local production of motor cycles.
(11) No excise duty shall be levied on the electric motor vehicles

Financial Act, 2067 (2011)
Date of Authentication and Publication
2067.11.03 (15 Feb.2011)

An Act Made to Implement Proposals Relating to Finance of the Government of Nepal

Preamble : Whereas, it is expedient to levy some charges, taxes, duties, cesses and fees, continue or alter the existing ones and also to amend the laws in force relating to revenue administration in order to implement the proposals relating to finance of the Government of Nepal; Now, therefore, be it enacted by the Constitution Assembly pursuant to Sub-articles (1) of Article 83 of Interim Constitution of Nepal,2063 (2007).
1. Short title and commencement : (1) This Act may be called the “Financial Act, 2067 (2011).”
(2) This Act shall come into force immediately.

31. Amendment to the Excise Duty Act, 2058 (2002 ) : Of the Excise Duty Act, 2058(2002):
(1) Of Section 2:
(a) The following Clause (g) shall be substituted for Clause (g):
“(g) “Production” means the act of manufacturing, making or preparing a product subject to excise duty.
(b) The following Clause (h1) shall be inserted after Clause
(h): “(h1) “Tobacco product” means tobacco or cigarette containing mixtures of tobacco substance, pan parag, khaini or similar substance which is chewed or put in mouth, and this expression also includes cigarette, bidi, cigar etc.”
(c) The following Clause (j) shall be substituted for Clause (j):
“(j) “Factory price” means the price fixed by adding only the expenditure incurred in manufacturing a product subject to excise duty and the profit of the enterprise, excluding the excise duty or any other tax chargeable on such product.”
(d) The following Sub-clause (3) shall be substituted for Sub- clause (3) of Clause (k):
“(3) Price fixed as per Sub-section (2) of Section 7, in the case of a product to be imported.”
(e) The following Clauses (o1), (o2), (o3), (o4), (o5), (o6), (o7), (o8) and (o9) shall be inserted after Clause (o): (ol) “Liquors” means any alcoholic substance prepared by fermenting any grains, fruits or any other stratchful substance or by other method, which has an alcoholic strength by volume of more than o.5 percent, and this expression includes liqueurs, spirit, country liquor, whisky, rum, gin, brandy, vodka, beer, wine, sherry, sampange, cider, perry,
mid, malt, industrial alcohol, rectified spirit, malt spirit, cylend spirit, denatured spirit, ENA and heads spirit.
(o2) “Ready-made liquors” means all kinds of alcoholic fluids prepared from mixtures with alcoholic strength by volume of less than 57.06 percent.
(o3) “L.P” means the strength of pure ethanol in London proof.
(o4) “L.P. liter” means the volume of 57.06 percent pure ethanol per liter.
(05) “U.P.” means the strength less than London proof.
(06) “O.P.” means the strength more than London proof.
(07) “Physical control system” means the system of production, release, import and export of a product subject to excise duty under the control of the Excise Duty Officer or employee designated by him or her.
(08) “Self-release system” means the system of production, release, import and export of a product subject to excise duty other than that based on the physical control system.
(09) “Determination of excise duty” means the determination of excise duty made pursuant to this Act.
(2) The following Section 3 shall be substituted for Section 3:
3. To levy excise duty: In manufacturing or producing and discharging from any enterprise, importing any products or services subject to excise duty and selling any services, the excise duty as set forth in the Schedule shall be levied.”
(3) The following Sections 3A. and 3B. shall be inserted after Section 3:

3A. Determination and recovery of excise duty:

(1) The producer or manufacturer of goods or services subject to excise duty shall be liable to determine and recover the excise duty under this Act. Provided that, the concerned Customs Office shall determine and recover the excise duty of the goods to be imported.
(2)If any product is subject to excise duty at the sale and distribution in addition to its production or importation, the importer or seller shall be liable to determine and recover the excise duty under this Act.
(3) The excise duty paid on the raw materials used in the making of a product subject to excise duty may be deducted from the excise duty to be paid while exporting the finished product. Provided that, the excise duty paid by any industry subject to the self-release system on the purchase or import of raw materials may be deducted from the excise duty payable while selling the finished product.
(4) The excise duty paid on the purchase or import of any goods or services subject to excise duty for commercial purposes may be deducted from the excise duty payable while selling such goods or services.
(5) The excise duty paid on the goods damaged due to arson, theft, accident, disruptive act or expiration of date of goods may be deducted as specified by the Department.

3B. Not to levy excise duty:

(1) No excise duty shall be levied on any goods or services subject to excise duty pursuant to Section 3, in the following circumstances.
(a) If any goods or services are exported from Nepal or any goods other than liquors and cigarette are sold to a licensed bonded warehouse and duty free shop, on such goods or services.
(b) No excise duty shall be levied on the cigarette and liquors sold by the licensed bonded warehouse to any
person or body enjoying diplomatic and tariff privilege, as recommended by the Government of Nepal, Ministry of Foreign Affairs. Provided that: (1) Nothing contained herein shall bar the sale and distribution of goods by a bonded warehouse other than cigarette and liquors, without charging excise duty.
(2) In importing any goods subject to excise duty to be sold by a bonded warehouse, there shall be furnished a cash deposit or bank guarantee for the amount of excise duty leviable on such goods.
(2) The procedures for the release or refund of the cash deposit or bank guarantee as referred to in Clause (b) of Sub-section (1) shall be as prescribed by the Department.
(3) If any goods manufactured or prepared within Nepal and already exported from Nepal are re-imported
because of rejection by the concerned party or other reason, and the same goods are to be exported within Three months of the import, the goods may be released against the deposit of the excise duty leviable at the time of such return, and the deposit shall be refunded by the concerned Customs Office after the re-export of such goods.”

(4) The following Section 4 shall be substituted for Section 4: “4. Recovery of excise duty: Except as otherwise provided in this Act, the excise duty shall be collected on the goods and services subject to excise duty pursuant to this Act as follows:
(a) In the case of goods produced by an industry subject to the physical control system, at the time of production and discharge from the enterprise for sale;
(b) In the case of any product and service to be sold under the automatic discharge system, at the time of issue of invoice;
(c) In the case of goods to be imported, at the customs point at the time of entering of such goods into Nepal;
(d) In the case of services to be imported, as prescribed by the Department.
(2) Notwithstanding anything contained in Sub-section
(1), the Department may so prescribe, in the case of any goods or services, that the excise duty has to be collected at the time of production of such goods or delivery of such services.”
(5) The following Sections 4A., 4B., 4C. and 4D. shall be inserted after Section 4:

“4A. Obligation to pay excise duty: The following person shall be liable to pay the excise duty pursuant to this Act:
(a) In the case of a product or service to be produced within the country, the producer thereof;
(b) In the case of a product to be imported, the person receiving the product as mentioned in the bill of lading, airway bill, invoice or application made for examination and clearance;
(c) In the case of auction of a product subject to excise duty, the person taking over that product;
(d) In the event of resale of any goods, other than liquors and cigarette sold by a duty free shop or the use of such goods in other purpose, the person reselling or reusing them;
(e) In the event of conversion of goods from a condition of being exempted from excise duty into a condition of being subject to excise duty, the person who has ownership of such product;
(f) In the circumstances other than those set forth in Clauses (a) through (e), the person as specified by the Department.

4B. Time limit for payment of excise duty:

(1) The excise duty recovered pursuant to this Act shall be paid as follows:
(a) In the case of goods subject to the physical control system, at the time of discharge of such goods;
(b) In the case of any goods or services to be sold under the automatic discharge system, within the 25 th day of the month following the issue of invoice;
(c) In the case of goods to be imported, at the time of entering of such goods into Nepal;
(d) In the case of services to be imported, as prescribed by the Department.
(2) In the event of failure to pay the excise duty within the time limit as referred to in Clause (b) of Sub- section (1), there shall be charged a delay fee by 0.05 percent on the due and payable amount per day.

4C. Exemption from excise duty:

(1) No excise duty shall be levied on any goods to be imported by a person or body enjoying diplomatic facility on the recommendation of the Ministry of Foreign Affairs.
(2) Notwithstanding anything contained in Sub- section (1), the excise duty shall also be exempted in the following circumstances:
(a) In transferring any motor vehicles that were imported by any foreign mission or donor agency with the enjoyment of the diplomatic facility or tariff facility to the project itself in consonance with the approval annual
programme of the project and converting their number plates into governmental ones or in transferring,
with the approval of the Ministry of Finance, any motor vehicles that were imported in the name of any project with the enjoyment of full or partial tariff facility (except those imported on inventory or bank guarantee) to any local body, community school, community hospital or governmental body after the completion of the project;
(b) If any diplomatic body (mission), project or other body (governmental as well as non-governmental
organization) intends to scrap and cancel the registration of any motor vehicle that it has imported with the
enjoyment of the tariff facility and that is more than Fifteen years old after the year of initial production,
with the approval of the Ministry of Finance, the excise duty shall not be levied on such a motor vehicle.
(c) If the owner of a motor vehicle imported for personal use with the enjoyment of partial customs tariff facility dies and the motor vehicle has to be transmitted to the husband or wife of the owner of motor vehicle,
the excise duty shall not be levied on such a motor vehicle.
(3) An industry producing goods by using 90 percent or more native worn and torn or unusable goods shall enjoy exemption of excise duty leviable on such goods or products.

4D. Control of sale and distribution: The Government of Nepal may, if it so considers necessary, control the sale and distribution of goods subject to excise duty and manage such sale and distribution as prescribed.”
(6) The following Section 7 shall be substituted for Section 7:
“7. Fixation of price of product or service subject to excise duty:

(1) In cases where the excise duty is to be levied on
any product or service according to value (ad valorem), the excise duty shall be levied taking the following price as the basis:
(a) The factory price which a manufacturer determines at the time of selling a product subject to excise duty;
(b) In the case of service, the price of the service at the time of selling it; or
(c) The price specified by the Department on the basis of production/ manufacturing cost.

(2) In respect of a product to be imported into Nepal, the excise duty shall be levied on the price fixed by adding the customs tariff on such a product to the price fixed for the purpose of collecting customs tariff.
(3) Excise duty on service shall be collected by fixing the price as per the invoice.
(4) For purposes of collecting excise duty, the Department may, as per necessity, re-fix the price or fix additional price.”
(7) The following Section 9 shall be substituted for Section 9:
“9. Provisions relating to license:

(1) No one shall manufacture, import, sell or store a product subject to excise duty or deliver service subject to excise duty to any other person, without obtaining the license pursuant to this Act or the Rules framed under this Act.
Provided that, no excise duty license is required to manufacture, import, sell or store a product subject to excise duty or deliver service subject to excise duty by an industry subject to automatic release system, except the manufacturing of bricks, stone crusher, bidi, tobacco, khaini, pan masala, gudkha, khandsari industry and import of molasses and Gund and import of goods subject to excise duty under the diplomatic facility on the recommendation of the Ministry of Foreign Affairs.
(2) A person, firm, company or organization that intends to obtain the license referred to in Sub-section (1) has to make an application to the Excise Duty Officer for the license, in such format and accompanied by such fee as prescribed.
(3) In cases where an application is made to the Excise Duty Officer for the license pursuant to Sub- section (2), the Department or the Excise Duty Officer designated by the Department shall issue the license in the prescribed format if it appears proper upon making necessary examination on such an application.
(4) The term of the license issued pursuant to Sub- section (3) shall remain valid until one Fiscal Year.
(5) A licensee who intends to obtain the renewal of license has to obtain the renewal within the month of Shrawan after the expiration of the period specified pursuant to Sub-section (4) by paying the fees as prescribed. Provided that, if any licensee so intends, the licensee may obtain the renewal by for three Fiscal Years by paying the renewal fees at the same time.
(6) A licensee who fails to obtain the renewal within the period as referred to in Sub-section (5) has to pay the fine of Twenty Five percent of the renewal fees for obtaining the renewal within the first Three months of the expiration of such a period, that of Fifty percent of the renewal fees for obtaining the renewal within Three months thereafter, that of Seventy Five percent of the renewal fees for obtaining the renewal within Three months thereafter and that of cent percent of the renewal fees for obtaining the renewal within the last day of the month of Ashad thereafter.
(7) If a licensee intends to obtain the renewal of license after the expiration of the period specified in Sub- section (6), the licensee may obtain the renewal by paying the cent percent additional license fees for each Fiscal
Year and due amounts, in addition to the license fees as prescribed.
(8) If any person does transaction without obtaining the license as referred to in Sub-section (1), the person shall not be exempted from the fees chargeable for the license and for its renewal.”
(8) The following Section 9A. shall be inserted after Section 9:
“9A. Power to suspend license:

(1) If a licensee gives up doing transaction of goods or services subject to excise duty, the licensee has to make an application, accompanied by the reason, to the Excise Duty Officer for the suspension of the license.
(2) If an application is received pursuant to Sub- section (1), the Excise Duty Officer shall make decision to suspend or not to suspend the license of that licensee, and if it appears necessary to suspend the license, suspend it
and give information thereof to the licensee within Thirty days after the receipt of the application.
(3) The licensee who so gets information of the suspension of the license pursuant to Sub-section (2) shall
not be required to furnish details as referred to in Section

10A. after the next month of the suspension.
(4) The licensee shall not be required to obtain the renewal of license pursuant to Section 9 during the period of suspension of license pursuant to Sub-section (2).”
(9) The following Clause (d) shall be inserted after Clause (c) of Section 10:
“(d) In cases where the licensee organization is dissolved or the licensee makes an application for the cancellation of license.”
(10) The following Sections 10A., 10B., 10C., 10D., 10E., 10F., 10G., and 10H. shall be inserted after Section 10:
“10A. To furnish excise duty returns: A person who has obligation to determine and recover the excise pursuant to Section 3A. has to furnish the returns of transaction subject to excise duty for each month to the Excise Duty Officer or the prescribed excise duty returns by a registered post within Twenty Five days. Such returns have to be furnished irrespective of whether transaction subject to excise duty has been carried on in that month or not.

10B. To maintain accounts:

(1) A person who has obligation to furnish the excise duty returns pursuant to Section 10A. has to maintain accounts of the production and sale of goods or services subject to excise duty, of purchase, consumption of raw materials, subsidiary raw materials with specification of their price and quantity and of closing balance, along with the prescribed details, and shall provide such details as and when the Excise Duty Officer so demands for inspection.
(2) The accounts of purchase, production, release, sale and balance as referred to in Sub-section (1) shall be got certified by the concerned Excise Duty Officer and used for the purpose of maintaining accounts.
(3) The licensee has to safely retain the accounts of transaction for until Six years.
(4) For the implementation of this Act, the Excise Duty Officer may, by giving a notice in writing, seek information as to the transaction of goods and services subject to excise duty.

10C. Records processed by computer to be eligible as evidence:

(1) Notwithstanding contained in the laws prevailing, the records relating to excise duty of any person processed by the computer installed in the Department or offices thereunder or offices designated to administer the excise duty shall be eligible as evidence for purposes of excise duty, except as otherwise proved.
(2) The Department may so prescribe that the data relating to the goods or services subject to excise duty can be automatically retrieved by the Department or the office designated by the Department.
(3) The Department may make necessary arrangements on the submission of excise duty returns and payment of excise duty through electronic medium.”

10D. Power of Excise Duty Officer to determine excise duty:
(1) The Excise Duty Officer may determine the excise duty in any of the following circumstances:
(a) In the event of failure to submit the excise duty returns within the time limit,
(b) In the event of submission of incomplete or erroneous excise duty returns,
(c) In the event of submission of false excise duty returns,
(d) In the event of existence of a reliable ground for the Excise Duty Officer to believe that lesser amount of excise duty has been shown or the amount of excise
duty is not accurate,
(e) Where there is a ground and reason for the Excise Duty Officer to believe that the sales price has been under-invoiced and it is necessary to re-determine the price or to determine additional price pursuant to Sub-section (4) of Section 7,
(f) If the ceiling of production of goods or services subject to the excise duty is specified pursuant to or under this Act, the production ceiling is not met,
(g) If the difference between the liquors released and the alcohol content of waste material or substance if more than
One percent,
(h) In the event of evasion of excise duty,
(i) If any person does transaction of goods subject to excise duty without obtaining the license.
(2) In determining the excise duty pursuant to Sub- section (1), the Excise Duty Officer shall give a time-limit of Fifteen days to the concerned person to defend himself or herself.
(3) The Department may make monitoring of the determination of excise duty made pursuant to Sub-section
(1). If any error is found upon monitoring, the Director General may order the redetermination of excise duty.
(4) The Excise Duty Officer shall have the following powers for the purposes of determination of excise duty pursuant to Sub-section (1) or examination of the excise duty returns submitted duty pursuant to Section
10A.:
(a) To examine the goods, places, documents, accounts and records related with the liability of excise duty,
(b) To search the place of transaction of any person or other places where evidences related with the acts deemed offence under this Act can be found,
(c) To seek information from the persons who prepare any records, books, accounts and documents or fill up
details therein in the course of discharge of their duty,
(d) To take possession of or take elsewhere any documents, books and records situated in the place of transaction of goods and services subject to excise duty or other place related thereto,
(e) To make audit of excise duty in the place of transaction or office or other appropriate place,
(f) The Excise Duty Officer may seek information of any matter from a bank or financial institution or any person
in relation to the transaction of goods and services subject to excise duty.
(5) It shall be the duty of such a bank and financial institution or person to give information as sought by the Excise Duty Officer pursuant to this Section.

10E. Power to have expert’s service: The Department may obtain the service of liquor export, brewing expert,
chemical expert and other expert, as required, for the effective implementation of this Act.

10F. Power to specify ceiling of production of goods and services subject to excise duty:

(1) The rate of production ceiling of ethanol, spirit or ENA required to be obtained from grains, molasses or Khudo used by an industry producing nhydres ethanol, rectified spirit or ENA shall be determined in accordance with the
procedures as prescribed.
(2) If it appears that the production is less than the rate of ceiling prescribed pursuant to Sub-section (1), the production of highest quality liquors to be produced by the industry shall be deemed to have been made from the ethanol, spirit or ENA in such different quantity.
(3) The Department may specify the rate of ceiling of production of other goods and services subject to excise duty.

10G. To test the volume of alcohol: The Excise Duty Officer may at any time test or examine the content of alcohol of the liquors discharged with approval and of the waste substance and quality thereof. The alcohol content shall not be different more than One percent or quality shall not be altered significantly.

10H. Recovery of due excise duty: If any person does not pay the excise duty to be paid within the time limit as referred to in this Act, the concerned Excise Duty Officer my recover the same by way of any or all of the following
measures:
(a) Deducting the amount, if any, refundable to such aperson,
(b) By having deduction of such amount from the amount payable by the Government of Nepal or any corporate body owned by the Government of Nepal or local body to such a person,
(c) By having deduction of such amount from the interest of such a person in a bank, financial institution or other institution, Explanation: For the purposes of this Clause, the term ‘interest” includes deposits and investments held in a bank, financial or other institution.
(d) By withholding the sale, export, import and other business by and of such a person,
(e) By seizing the movable and immovable property of such a person,
(f) By auction selling any or all of the movable and immovable properties of such person at one time or at different times as prescribed.
(g) By auctioning the goods in stock.

10I. Delay fee: In the event of failure of a person to pay the excise duty within the time limit as referred to in this Act after the determination of the excise duty or for any other reason, except a circumstance as referred to in Clause (a) of Sub-section (1) of Section 4, there shall be charged a delay fee by 0.05 percent on the due and payable amount of excise duty per day.”
(11) The word “release” shall be substituted for the work “export” contained in Section 11.
(12) The following proviso shall be inserted in Clause (d) of Sub- section (3) of Section 12:
“Provided that, such suspension shall not exceed seven days; and decision shall be made no later than Sixty days after the making of such suspension.” (13) Of Section 13,
(a) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in various
places of Sub-section (1).
(b) The following Sub-sections (4) and (5) shall be inserted after Sub-section (3):
“(4) The Department may give an information incentive expense of a maximum of Ten Thousand Rupees as prescribed to a person who provides information of the offence as referred to in this Section.
(5) The details of the person giving information of offence pursuant to this Section shall be kept secret.”
(14) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in various places of Sub- section (1) of Section 14 and the following Clauses (a), (b) and (c) shall be substituted for Clauses (a), (b) and (c) of the same Sub-section:
“(a) Ten per cent of the amount in controversy to the informer,
(b) Twenty per cent of the amount in controversy to one who seizes and hands over a product only;
(c) Thirty per cent of the amount in controversy to one who arrests and hands over the person, along with the proof. Provided that, in cases where the informer who gives information or clue be more than one person, the reward shall be divided between them pro rata.”
(15) The words “Inland Revenue Office” shall be substituted for the words “Excise Duty Office” contained in Section 15: (16) Of Section 16:
(a) The following clause (b) shall be substituted for clause (b) of Sub-section (1):
“(b) To produce or import a product subject to excise duty without obtaining the license,”
(b) The following Sub-section (5) shall be inserted after Sub- section (4):
“(5) Where any person commits any of the following offences, the Excise Duty Officer may punish such a person with a fine as follows:
(a) In the event of re-determination of the price or determination of additional price pursuant to Sub-section (4) of Section 7, cent percent amount of the amount of excise duty to be added,
(b) In the event of making sale or storage of goods or services subject to excise duty without obtaining the license, from Five Thousand Rupees to Fifteen Thousand Rupees.
(c) In the event of violation of the provision of Section 10A., the amount of 0.05 percent of the leviable excise duty per day or One Thousand Rupees for each return, whichever is the higher.
(d) In the event of failure to maintain updated accounts as referred to ins Sub-section (1) of Section 10B., Ten Thousand Rupees and Five Thousand Rupees for each instance in the event of no allowing the accounts of transactions to be inspected,
(e) In the event of violation of Sub-section (2) of Section 10B., upto Five Thousand Rupees,
(f) In the event of violation of Sub-section (3) of Section 10B., Ten Thousand Rupees,
(g) In the event of obstruction in the act as referred to in Sub-section (3) of Section

10D., Five Thousand Rupees for each instance, (h) If, upon examination pursuant to Section 10G., the difference between the liquors released and the alcohol content of waste material or substance is more than One percent, cent percent of the amount of revenue leaked,
(i) If the ceiling of production of goods or services subject to the excise duty is specified and the production ceiling is not met, cent percent of the amount of excise duty to be added,
(j) In the event of violation of Section 4B., Ten Thousand Rupees for each instance,
(k) In the event of violation of this Act or the Rules framed under this Act, One Thousand Rupees for each instance.
(17) The following Section 17A. shall be inserted after Section 17:
“17A. Provision on payment by installment: Where any taxpayer makes a request in writing for the payment of any arrear excise duty by installment, permission may be given to pay the same by installment for One year.”
(18) The following Section 19 shall be substituted for Section 19:

“19. Provisions relating to administrative review and appeal:

(1) A person who is not satisfied with any decision by the Excise Duty Officer of excise duty assessment and recovery thereof may make an application for administrative review to the Department against the decision within Thirty days of the date of receipt of a notice of that decision.  Provided that, a person may make an appeal in the Revenue Tribunal against the decision of punishment of imprisonment for any offences as referred to in Sub- sections (1), (2), (3) and (4) of Section 16. (2) In cases where the time limit for making application pursuant to Sub-section (1) expires and any person makes an application for the extension of time limit within Seven days from the date of expiration of the time limit, the Department may extend the time limit for a period not exceeding Thirty days from the date of
expiration of the time limit.
(3) If the claim of the applicant appears to be true upon examining the evidence and documents including the application made by the taxpayer pursuant to Sub-section
(1), the Director General may, by executing a memorandum setting out the clear reasons, void that excise duty assessment order and direct the concerned Excise Duty Officer to make re-assessment of excise duty.
(4) The Department shall make decision on the application within Sixty days after the date of making of application pursuant to Sub-section (1).
(5) The taxpayer who makes an application pursuant to Sub-section (1) has to pay undisputed amount of excise duty and amount of fine, out of the amount of excise duty assessed, and furnish a cash deposit of One Third of the amount of excise duty in controversy and amount of fine.
(6) If the Department does not give decision within the time limit as referred to in Sub-section (4), the concerned person may, after the expiration of that time- limit, make an appeal to the Revenue Tribunal or if the person is not satisfied with the decision made by the Department, the person may make such an appeal in the Revenue Tribunal within Thirty Five days after the date of receipt of notice of the decision.
(7) A person who makes an application for administrative review or an appeal pursuant to this Section shall register a copy of the application or appeal with the concerned Office no later than Fifteen days.
(8) The implementation of the decision set forth in Sub-section (1) of Section 16 shall not be deemed to have been affected by the reason of making an application for administrative review or appeal pursuant to Sub-section(1).” (19) The following Section 22A. shall be inserted after Section 22:

“22A. Deemed to be excise duty: Any charge, delay fee or fine imposable pursuant to this Act shall be deemed to be the excise duty imposable pursuant to this Act.”

The following Section 23 shall be substituted for Section 23:
“23. Department to be responsible for implementation and administration: The Department shall be responsible for the implementation and administration of this Act.”
The following Section 24 shall be substituted for Section 24:

“24. This Act to prevail on excise duty provision : Notwithstanding anything contained in the laws in force, except in cases where the Financial Act to be enforced in every year amends this Act and provides for imposition,
assessment, increase, decrease, exemption, or remission of excise duty, no other Act may make any amendment to, or alter tax provisions referred to in this Act or make other excise duty related provisions.”
The following Section 25A. shall be inserted after Section 25:

“25A. Power to frame and issue manual: The Department may frame and issue necessary Manuals, subject to this Act and the Rules framed under this Act.The following Schedule shall be inserted in the Excise Duty Act, 2058 (2002):

 

 

 

 

 

 

 

 

 

Note:

(1) Notwithstanding anything contained above in the rate of excise duty, no excise duty shall be levied on the chassis of ambulances, corpse carrying vehicles and battery tempos.
(2) The procedures of collection of the excise duty leviable on the motor vehicles purchased and in stock until Fiscal Year 2065/066 shall be as mentioned in the Finance Act, 2065.
(3) Exemption of excise duty shall be granted, on the recommendation of the Department of Industries, to the raw maters imported by industries and used to produce goods as referred to in sub-heading 7213.91.10 of heading 72.13.
(4) In the event of cocktail of any liquors, the rate of tariff set forth in serial number 10 shall be applicable.
(5) Prepared liquors of 70 UP strength may be made by using rectified spirit of serial number 16 only.
(6) No local production of marble shall be subject to excise duty.
(7) No excise duty shall be levied on the goods of personal use imported enjoying the customs duty exemption facility under the Luggage and Baggage Order Facility.
(8) Exemption of 50 percent excise duty shall be granted to the local production of motor cycles and that of 25 percent to the local production of other motor vehicles.
(9) No excise duty shall be levied on the electric motor vehicles.
(10) Eighty percent exemption of excise duty leviable pursuant to this excise duty tariff shall be granted to the production of brandy by the local fruits based industries established in the least developed regions as mentioned in Schedule-9 of the Industrial Policy, 2067.
(11) The Director General may, for statistical purposes, add a digit to the eight digit sub-heading for the purposes of the rate of excise duty.
(12) The Department may, as required and in consultation with the Customs Department, interpret and specify the harmonized codes of the products/goods on which excise duty is leviable.

(Source: Nepal Law Commission)

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