Kathmandu: The Inland Revenue Department (IRD), Lazimpat, Kathmandu, has introduced an exciting new scheme offering consumers a 10% refund on VAT for payments made via electronic means. This initiative, effective from 7 September 2024, aims to promote the use of digital payment systems and increase transparency in VAT transactions.

According to the Value Added Tax Act, 2052, Section 25, consumers who make electronic payments for certain goods and services will be eligible for this cash incentive. As per the IRD’s recent decision on 2081/05/21, consumers purchasing services from designated establishments, such as bars, restaurants, and hotels, can avail themselves of this refund.

Eligible Services for 10% VAT Refund:

• Services provided by bars and liquor-serving establishments.
• Services from restaurants.
• Services offered by hotels, motels, lodges, and guesthouses.

Key Conditions:

• Only VAT-registered businesses issuing electronic invoices approved by the IRD are eligible.
• Payments made through debit/credit cards, QR codes, or mobile wallets qualify for the refund.
• Sellers must automatically refund 10% of the VAT paid to the consumer’s bank account.
• Banks, financial institutions, and payment service providers are required to adjust their systems to facilitate the VAT refund process.

This move is part of the government’s ongoing effort to enhance digital payments while offering consumers a financial incentive for supporting transparent VAT practices. Consumers and businesses are encouraged to participate in this system and reap the benefits of the VAT refund program.