KATHMANDU, Dec 8: The Inland Revenue Department (IRD) has explicitly stated that there will be no value-added tax (VAT) on products such as potatoes, onions, and apples produced in Nepal. In the current fiscal year's budget, the government had imposed VAT on certain items that were previously exempt from VAT.
Protests erupted at the Kalimati Fruit and Vegetable Market Development Committee as traders claimed that the government had imposed VAT on domestic products. In response to this, wholesale traders at Kalimati ceased the import and sale of potatoes and onions, resulting in a shortage and a significant price hike in the market in the capital city.
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However, the IRD in a notice on Friday made it clear that no VAT will be levied on domestic products.
"The IRD has taken note of various media reports indicating a disruption in the supply of agricultural products, including potatoes and onions, due to the imposition of Value Added Tax (VAT) on locally produced items," stated the IRD's notice. "In line with Nepal's policy to promote and protect domestic agricultural products, this notification informs all concerned that VAT has not been imposed on potatoes, onions, and apples produced in Nepal."