30 June, Kathmandu. Now, every businessman has to mention Harmonized Code (HS Code) compulsorily while deducting VAT bill for selling imported goods.
The government has amended the Value Added Tax Regulations 2053 and made such a provision. Sub-rule (1) of rule 17 of the regulation and schedule 5, 5B and 6 included in the format of the tax invoice have been amended by the new amendment.
By amending rule 17 (1) of the regulation, it has been arranged that ‘in case of imported goods, the harmonized code of at least the first four digits of the goods as mentioned in the customs declaration’ should also be disclosed in the tax bill.
According to the same arrangement, a column has been added to mention the HS code before the details of the items to be sold in the revised schedules. In such a situation, now any seller has to mention the HS code while paying the bill after selling the imported goods.
When goods are imported or exported, they are indicated with numbers to indicate which goods they are, called the Harmonized (HS) code. This code is basically used for customs purposes and the issue of how much customs duty will be imposed on which goods is decided on the basis of this code.
However, in order to reduce revenue evasion, to control smuggling and to track imported goods, various countries of the world have made a legal arrangement to mention the HS code in the value added tax bill. The neighboring country of India also has this arrangement.
Nepal has also made a rule that the HS code should be mentioned in the VAT bill deducted when selling imported goods.
Format of Old VAT Bill:
Format of New VAT Bill:
‘This arrangement is seen to be effective in seeing how much the importer has brought and sold,’ Deputy Director General of the Internal Revenue Department Seventak Pokharel said, ‘This arrangement is expected to help eliminate the use of fake VAT bills and reduce smuggling.’
A chartered accountant said that even the retailers who are registered for VAT have to cut the bill with HS code and its compliance is very complicated.
“From importers, wholesalers to retailers, HS code has to be mentioned compulsorily when selling imported goods. It does not cause any problem to importers and big businessmen, but it can add trouble to retailers,” said the CA. ‘
Pokharel, the deputy director general of the department, says that since the HS code is mentioned on the bill itself when the bill is billed from the importer, the retailers also bill accordingly.
“The HS code is mentioned in the bill that you get when you buy the goods, the same should be mentioned when you sell it, it will not increase the hassle,” he said.
