As per the public notice issued by the Inland Revenue Department, 50% of the VAT amount is to be deposited by the service receiver and remaining 50% is to be paid by the contractor or supplier or consultant. This provision is applicable for all the contracts or supply of goods & services made to the Nepal Government or entities that are fully or partially owned by the Nepal Government.
Nothing has been changed to do with the VAT return in case the 50% of VAT amount is deposited by the government entity. The full amount of invoice (taxable value) and VAT on that (which is 100% of VAT amount) is to be considered while filing the VAT return. When it is done, the total liability is a full amount of VAT. But it is reduced when the Government entity deposits the 50% of VAT amount. But we need to ensure that the amount (50% of VAT) is deposited on time or not. 50% of VAT will itself be deducted from the total liabilities of VAT payable in the return if deposited the remaining 50% of VAT.
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