Tax category: Nepal Export
Category for export customers, zero rated under Schedule 2 of the VAT Act.
In detail
Nepal Export is the category for customers outside Nepal who pay in convertible foreign currency, whose supplies are zero rated under Schedule 2 of the VAT Act. Its Tax Rules load VAT 0% (Export - Schedule 2) - YFF, which still adds a VAT row at 0% so the invoice is counted as an export in the VAT return rather than dropped. Zero rating is different from exemption: you charge no VAT but keep the right to recover input VAT on the purchases behind the sale. Keep the customs export declaration with the invoice, because the IRD asks for it before refunding input VAT. Marking a domestic customer as Export wrongly removes 13% from your output VAT.
Formula
VAT = Net amount x 0 / 100 = Rs 0; input VAT on related purchases remains recoverable
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Debtors - YFF (Foreign customer) | Rs 1,33,000 | |
| Rendering of Services - YFF | Rs 1,33,000 | |
| 2261 - VAT Payable - YFF | Rs 0 |
How to record it in BRAccount
- 01Go to Selling > Customer, open the foreign customer and set the billing currency, for example USD.
- 02Set Tax Category to Nepal Export and Save.
- 03Open Invoicing > Sales Invoice > New for that customer; VAT 0% (Export - Schedule 2) loads.
- 04Attach the customs export declaration under Attachments.
- 05Submit. The invoice posts with a zero VAT row and appears in the VAT return as an export.
When to use it
Set on foreign customers who pay in convertible currency.
Example from the demo books
A USD tour package invoiced at 0% VAT with a customs export declaration.