Excise Duty Registration Process in Nepal

Introduction to Excise Duty Registration

Excise duty is an indirect tax levied on the manufacture, sale and consumption of certain goods in Nepal. The Excise Act 2058 (2002) and Excise Regulation 2059 (2003) govern the administration of excise duty in the country. Excise duty registration is a mandatory process for businesses involved in the production, import, export, sale or storage of excisable goods in Nepal.

The main purpose of excise duty registration is to bring manufacturers and traders of excisable goods under the excise duty system and ensure proper collection of excise revenue. It allows the government to monitor and regulate the production and sale of goods that are subject to excise duty.

Elements of Excise Duty Registration in Nepal

• It is administered by the Inland Revenue Department under the Ministry of Finance
• Registration is compulsory for manufacturers, importers and traders dealing with excisable goods
• A unique excise duty registration number is issued upon registration
• Separate registration is required for each factory/manufacturing unit
• Registration needs to be renewed annually

The excise duty registration process involves submitting an application along with required documents to the relevant Inland Revenue Office. Upon verification and approval, an excise duty registration certificate is issued which authorizes the business to deal in excisable goods.

Who Needs to Register for Excise Duty?

The following types of businesses and individuals are required to register for excise duty in Nepal as per the Excise Act:

Manufacturers of excisable goods: Any person or entity engaged in the production, processing or packaging of goods that are subject to excise duty must obtain registration before commencing manufacturing activities.

Importers of excisable goods: Businesses that import excisable goods into Nepal for commercial purposes need to register for excise duty.

Exporters of excisable goods: Entities involved in exporting excisable goods from Nepal require excise registration.

Wholesalers and distributors: Businesses that store and sell excisable goods on a wholesale basis are required to register.

Retailers: Retail sellers of certain excisable goods like liquor and tobacco products need excise registration.

Contract manufacturers: Entities that manufacture excisable goods on contract basis for other companies need to register.

The registration requirement applies to both individuals and business entities like sole proprietorships, partnerships, companies etc. dealing with excisable goods. Even small scale manufacturers and traders are required to register if they deal with excisable commodities.

Procedure for Excise Duty Registration

• Step 1: Determine eligibility
• Step 2: Prepare required documents
• Step 3: Submit registration application
• Step 4: Pay registration fees
• Step 5: Obtain excise duty registration certificate

The process for obtaining excise duty registration in Nepal involves the following key steps:

Step 1: Determine eligibility

• Assess if your business activities involve manufacture, import, export or sale of excisable goods
• Review the list of excisable goods and services provided in the Excise Act and Regulations
• Confirm that your annual turnover exceeds the registration threshold, if applicable

Step 2: Prepare required documents

• Collect all necessary documents as per the checklist provided by Inland Revenue Department
• This typically includes business registration documents, PAN certificate, VAT registration (if applicable), property ownership/rental documents etc.
• Get documents certified/notarized as required

Step 3: Submit registration application

• Obtain the excise duty registration application form from the local Inland Revenue Office
• Fill the form with accurate business and product details
• Attach all required supporting documents
• Submit the completed application to the designated Inland Revenue Office

Step 4: Pay registration fees

• Pay the prescribed registration fees at the Inland Revenue Office
• Obtain payment receipt

Step 5: Obtain excise duty registration certificate

• The tax office will verify the application and documents
• An inspection of business premises may be conducted
• If approved, the excise duty registration certificate will be issued
• The certificate contains the unique excise registration number

What products need Excise Duty Registration?

The Excise Act 2058 and annual Finance Acts specify the goods and services that are subject to excise duty in Nepal. Some key categories of products that require excise duty registration include:

1. Alcoholic beverages: Beer, wine, spirits, liquors etc.
2. Tobacco products: Cigarettes, cigars, chewing tobacco, snuff etc.
3. Petroleum products: Petrol, diesel, kerosene, aviation fuel etc.
4. Motor vehicles: Cars, motorcycles, scooters, commercial vehicles etc.
5. Electronic goods: Mobile phones, televisions, refrigerators, air conditioners etc.
6. Non-alcoholic beverages: Carbonated drinks, energy drinks etc.
7. Cosmetics and personal care products: Perfumes, beauty products, hair care items etc.
8. Cement and steel products
9. Paints and varnishes
10. Plastic products
11. Matches and lighters
12. Playing cards
13. Lubricating oils and greases
14. Tires and tubes
15. Electrical appliances
16. Sanitary ware
17. Marble and granite products
18. Certain food products like chewing gum
19. Telecommunication services
20. Health club and fitness center services

The list of excisable goods is revised annually through the Finance Act. The excise rates also vary for different product categories. Some goods may be exempt from excise duty based on factors like end-use, import purpose etc.

Documents Required for Excise Duty Registration

1. Completed excise duty registration application form
2. Copy of PAN (Permanent Account Number) certificate
3. Copy of VAT registration certificate (if applicable)
4. Copy of company registration certificate (for companies)
5. Copy of partnership deed (for partnerships)
6. Copy of citizenship certificate of proprietor/partners/directors
7. Two passport size photographs of proprietor/partners/directors
8. Copy of property ownership documents or rental agreement of business premises
9. Location map of business/factory premises
10. List of plant and machinery installed (for manufacturers)
11. Details of products to be manufactured/traded
12. Projected annual production/sales figures
13. Copy of industry registration certificate (for manufacturers)
14. Copy of import export code (for importers/exporters)
15. Memorandum and Articles of Association (for companies)
16. Board resolution authorizing excise registration (for companies)
17. Sample labels/packaging of products (if available)
18. Bank statements of last 6 months
19. Income tax returns of last 2 years
20. Audit reports of last 2 years (for companies)

The exact list of required documents may vary slightly based on the nature of business and type of excisable goods involved. It’s advisable to obtain the latest document checklist from the local Inland Revenue Office before submitting the application.

All documents need to be self-attested by the applicant. Notarized/certified copies may be required for some documents. The tax office may ask for original documents for verification during the registration process.

Timeframe for Excise Duty Registration

The typical timeframe for completing the excise duty registration process in Nepal is as follows:

Preparation of documents: 1-2 weeks

• Collecting and organizing all required documents
• Obtaining necessary certifications and attestations

Submission of application: 1-2 days

Cost of Excise Duty Registration

The costs associated with excise duty registration in Nepal include:

Here’s the information organized into a table format:

Category	Details
Basic Registration Fee	NPR 10,000
Additional Fee per Product Category	NPR 1,000
Renewal Fee (Annual)	NPR 5,000
Security Deposit	Varies based on business nature and scale
	Typically NPR 50,000 – NPR 500,000
Professional Fees	Tax consultant/lawyer: NPR 15,000 – 30,000

The actual costs can vary significantly based on factors like:

• Type and number of excisable products
• Scale of manufacturing/trading operations
• Location of business premises
• Any special licenses or permits required

Excise Duty Renewal in Nepal

Excise duty registration in Nepal needs to be renewed annually. The renewal process, costs, required documents and timeline are as follows:

Process:

1. Obtain renewal application form from local Inland Revenue Office
2. Fill the form with updated business details
3. Attach required documents
4. Submit application before expiry of current registration
5. Pay renewal fees
6. Obtain renewed excise duty certificate

Cost:

• Basic renewal fee: NPR 5,000
• Additional fee per product category: NPR 500
• Late renewal penalty: 25% of renewal fee per month of delay

Documents required:

1. Completed renewal application form
2. Copy of existing excise registration certificate
3. Copy of latest excise returns filed
4. Proof of renewal fee payment
5. Updated list of products manufactured/traded
6. Any changes in business details since last renewal

Timeline:

• Renewal application should be submitted at least 15 days before expiry of current registration
• Renewal process usually takes 7-10 working days if all documents are in order
• Renewed certificate is typically valid for one year from date of expiry of previous registration

Laws and Authorities Governing Excise Duty

The key laws and authorities governing excise duty in Nepal are:

Here’s the information organized into a two-column table:

Laws	Authorities
Excise Act 2058 (2002)	Inland Revenue Department (IRD)
Excise Regulation 2059 (2003)	Ministry of Finance
Finance Act (Annual)	Department of Revenue Investigation
	Revenue Tribunal

Excise Duty Registration Practices in Nepal

The Inland Revenue Department is gradually moving towards online registration and renewal processes to improve efficiency.

Industry-specific requirements: Certain industries like alcohol and tobacco face stricter registration and control measures due to higher revenue risks.

Regular audits: Registered businesses are subject to periodic audits and inspections to ensure compliance with excise regulations.

Conclusion

Excise duty registration is a critical compliance requirement for businesses dealing with excisable goods in Nepal.

• It’s mandatory for manufacturers, importers, exporters and traders of excisable goods
• The process involves submitting an application with various supporting documents
• Registration needs to be obtained before commencing business activities
• The registration certificate needs to be renewed annually
• Costs include registration fees, security deposits and documentation expenses
• The Inland Revenue Department is the primary authority for excise registration