Nepal raises the VAT deregistration turnover limit in section 11(1)(f) from NPR 2 million to NPR 3 million

What changed in detail

The Finance Act 2081 (Act No. 5 of 2081) was published in the Nepal Gazette (Rajpatra, Khanda 74, Atiriktanka 16, Part 2) on Shrawan 1, 2081, which is 16 July 2024. Section 1(2) brings section 34 into force immediately.

Section 34(2) amends clause (f) (च) of section 11(1) of the Value Added Tax Act 2052, replacing the words “twenty lakh rupees” (NPR 2 million) with “thirty lakh rupees” (NPR 3 million). Section 11 governs the cancellation of VAT registration, so the turnover limit in that clause rose from NPR 2 million to NPR 3 million.

The registration threshold itself is set in the VAT Rules and was not changed by the Act.

What it means

The NPR 3 million figure in section 11(1)(f) has applied since 16 July 2024; the weekly feed records no later amendment to it. Because each year’s Finance Act can amend the VAT Act, check the current consolidated text before relying on it.

This is a deregistration rule, not a registration threshold. It is easy to read “VAT threshold raised to NPR 3 million” and assume businesses below that figure no longer need to register; the Act does not say that. The same Finance Act set the same NPR 3 million figure for non-resident digital and air transport suppliers, which is a separate test.