Kathmandu, Shrawan 10 - The Nepal Electricity Authority (NEA) has formally requested the Inland Revenue Department's opinion on a contentious billing issue: whether Value Added Tax (VAT) can be charged on electricity that was consumed in Ashad but billed only in Shrawan.
The dispute arose when customers observed that invoices issued in the first week of Shrawan included VAT despite the fact that the electricity being invoiced had been utilized the previous month, before the tax went into force.
According to the Finance Act 2083, VAT on energy went into force on Shrawan 1. Because these bills, dated after Shrawan 1, cover usage prior to that date, concerns have been raised about the constitutionality of charging the new tax retrospectively. Responding to mounting public concern, Minister of Energy, Water Resources, and Irrigation Biraj Bhakta Shrestha asked the NEA to investigate the legal implications of the situation and guarantee that consumers are not unduly taxed financially as a result.
Acting on the minister's directions, the NEA has written to the Inland Revenue Department to clarify two points: whether VAT applies to electricity consumed in Ashad but invoiced in Shrawan, and if the minimum demand charge indicated on electricity bills should be subject to VAT.
The NEA has confirmed that any corrections resulting from the department's reaction will be incorporated in subsequent billing cycles. The Inland Revenue Department's decision is anticipated to determine whether customers who were charged VAT on pre-Shrawan electricity usage will see modifications to their future bills.
Source: Online Khabar
