Excise duty in Nepal: rates, health risk tax, returns and liquor rules (2083/84)

Who charges excise, and on what

• Goods under self-release: the producer charges excise on its own tax invoice (Rules Schedule 13) when the goods leave, and deposits it with the monthly return (Act s4, Rules r6(4)).
• Liquor, spirit, molasses, wine, cider and beer are under physical control: excise is collected at release under an officer's supervision; a microbrewery pays monthly in advance on its installed capacity (Finance Act 2083).
• Cigarettes, tobacco, khaini, gutkha and pan masala pay the excise before release, on an approved demand form (Rules r6(2क)).
• Imports: the customs office collects excise at the import rate (Act s3क).
• No service is excisable at present.
• VAT is charged on the price including the excise and the health risk tax.

Excise rates 2083/84: examples from the schedule

The Finance Act 2083 (s56(16)) replaced the Excise Act's schedule from Shrawan 1, 2083: 854 tariff lines, 372 dropped (much of wood, electronics and electric vehicles) and nine added. Its notes set many domestic-production rates apart from the import rate:

Health risk tax (स्वास्थ्य जोखिम कर)

Excise credit on purchases

A producer credits the excise it paid on raw materials against the excise on its sales (s3क). The Finance Act 2083 removed the bar on subsidiary raw materials and packing materials, so they are creditable too; raw materials and parts imported customs-free, and goods bought for resale or own use, are not. A tobacco or physical-control producer credits only the excise on the raw material actually consumed (Schedule 4च box 3.2).

The monthly excise return and registers

Return form

Schedule 4ङ for self-release producers of non-tobacco goods; Schedule 4च for tobacco and nicotine producers and physical-control establishmentsRules r13ग

Due

Within 25 days of the end of each Bikram Sambat month, nil months too, until the licence is cancelledr13ग, r5क

Amounts

Whole rupees; goods taxed by quantity attach opening stock, production, sales and closing stockSchedules 4ङ/4च

Purchase and sales books

Schedule 4ग and 4घ, which may be merged with the VAT booksr13क(1)(ग)

Daily production and stock account

Schedule 4: opening, production, sales with excise, closing with exciser13क(1)(क)-(ख)

Liquor and cigarette registers

Schedules 5-12, 9क and 9ख (batch, bulk-spirit, bottle sales, removal forms)r13क, r14, r16

Records

Kept six yearsAct s10ख(3)

Stock losses

Liquor 0.5% by the licensee plus 0.5% claimed in the return (1% at most), beer 2%, spirit maturing over three years 2% a year in strength and 3% in volumeRules r23

Licences, stamps and prices

• Producing, importing, selling or storing excisable goods needs an excise licence (Act s9). A licence lasts one fiscal year and is renewed within Shrawan, only when no excise is owed.
• Late renewal adds a share of the fee for each three months past Shrawan: traders 25%, 50%, 75%, then 100%; producers and importers 50%, 100%, then 200% (Act s9(6)-(6क); Liquor Rules r6).
• Licence fees (Rules Schedule 2, 27th amendment): a new spirit, beer or ethanol producer pays Rs 25 lakh and renews at Rs 2.5 lakh; a cigarette producer Rs 50 lakh and Rs 3 lakh; producers of other excisable goods Rs 60 for each Rs 1 lakh of fixed capital, at least Rs 11,000 and at most Rs 60,000.
• Excise stamps (now also digital excise tickets) are put on liquor, beer caps or cartons, cigarettes, cigars and every packet of oral tobacco and pan masala before sale; only stamped goods may be sold (Act s10ञ1, Rules r30).
• Producers and importers of liquor, beer and tobacco publish distributor, wholesale and retail prices and print the maximum retail price; a new brand or size needs prior approval (Rules r29; Finance Act 2083 schedule note 14).
• The discount ban on liquor, beer and tobacco now applies only to sellers not registered for VAT (Act s4ङ, Finance Act 2083).
• IRD may apply a track-and-trace system to liquor and tobacco from production to sale (Act s10ट1, Finance Act 2083).

Selling liquor: the Liquor Act and Rules

• No production, sale, storage, import or export of liquor without a licence under the Excise Act; bars, restaurants and shops serving liquor need one too (Liquor Act s3-s6).
• Liquor is sold only from 10 a.m. to 10 p.m., and not where the excise officer has banned it (Liquor Rules r10, r11).
• Never sold to anyone under 18, nor by anyone under 18; never to a pregnant woman; never in plastic pouches (Liquor Act s4क; Excise Rules Schedule 3).
• Only bottles with the excise stamp across cap and bottle are sold; unstamped stock is confiscated and the seller fined (Schedule 3 conditions).
• Every purchase and sale invoice is kept; liquor shops other than hotels and restaurants deal only in liquor and tobacco, and department stores sell them from a separate room.
• A licence may be renewed for up to three years at once; one not renewed may be cancelled (Liquor Rules r6, Act s6ग).

Excise penalties

Excise and the health risk tax owed for past returns can be settled under the Finance Act 2083 amnesty: file the return and pay the excise with 1% by the end of Poush 2083 (14 January 2027) and the late fee and fine are waived (s43).

How BRAccount handles excise

BRAccount charges excise only on items the organisation produces, at the schedule's domestic rate on the bill's date (the Finance Act 2082 schedule before 17 July 2026, the 2083 schedule after), adds the health risk tax and the VAT on both, and keeps the 4ङ/4च return, the purchase and sales books, the daily stock account and the stamp register.

Questions

Sources

• अन्तःशुल्क ऐन, २०५८ (Excise Act 2058)
• अन्तःशुल्क नियमावली, २०५९ (Excise Rules 2059), 27th amendment
• आर्थिक ऐन, २०८३ (Finance Act 2083), Nepal Gazette 2083/03/30
• मदिरा ऐन, २०३१ (Liquor Act 2031)
• मदिरा नियमहरू, २०३३ (Liquor Rules 2033), 4th amendment
• BRAccount's page-by-page reading of the Excise Act, the Excise Rules (85 pages), the Finance Act 2083 schedule and the Liquor Act and RulesThe schedule's 854 lines are built into BRAccount; each figure here is cited to its section.