KATHMANDU, June 14: The government has made it mandatory for traders to state the Harmonised System code when they issue VAT bills for imported goods.
Amending the Value Added Tax Regulation 1997, the government has introduced the new rule. “Now traders need to reveal the four-digit HS code as stated on the short-declaration form issued on imported goods,” reads the revised rule.
Landmark legal reform bills passed
The HS code, which is administered by the World Customs Organization, is a unique numerical value used to classify internationally traded products. The new rule of VAT bill is expected to help track domestic trading of imported goods and control cross-border smuggling.
Likewise, the government has increased the VAT threshold for businesses involved in service trade. According to the new provision, any business of service trade carrying out an annual transaction of Rs 3 million and above will have to be registered under VAT. As of now, the threshold has been maintained at Rs 2 million. The new rule will be applicable also for businesses based on joint trade of goods and services.
The existing provision of VAT on transport businesses and merchandise businesses are left unchanged. According to the law, both the transporters and merchandise businesses will be mandatory to be registered under VAT if their annual transactions cross Rs 5 million.
