The Finance Bill 2083 introduces one of the most extensive packages of tax concessions, waivers, and settlement windows Nepal has seen in recent years. Across income tax, VAT, excise, and customs, the Bill offers businesses and individuals a structured opportunity to regularise outstanding dues, resolve pending disputes, and step into the tax net — with penalties and interest waived where conditions are met. Most windows close by end of Poush 2083. Here is what you need to know.
Why This Budget Matters for Businesses
Budget 2083 arrives against an unusual backdrop: the economic disruption of the GenZ movement, a legacy of businesses and individuals outside the tax net, and a large stock of pending tax disputes and unresolved arrears across income tax, VAT, and excise. The Finance Bill 2083 responds with a broad amnesty-style framework — not unconditional forgiveness, but structured relief tied to compliance action before specific deadlines.
Sections 25 to 53 of the Bill contain the concession and waiver provisions. Sections 25 to 51 came into force on Jestha 15, 2083. Sections 52 and 53 take effect from Shrawan 1, 2083. The provisions fall into five broad categories, each addressed below.
1. Relief for GenZ Movement–Affected Businesses
Three provisions directly address the disruption caused by the GenZ movement and offer targeted relief to affected industries and businesses.
Loss of Uninsured Business Inventory — Section 26
Businesses that lost uninsured inventory during the movement may claim the cost as a deductible expense for FY 2082/83 under Section 15 of the Income Tax Act 2058. The corresponding VAT paid on those goods may also be deducted under Section 17 of the VAT Act. The prerequisite is an on-site loss report (sarjamin muchulka) submitted to the concerned Inland Revenue Office within the prescribed time under VAT Rule 39A.
50% Customs and Excise Waiver for Restoration Imports — Section 27(1)
Industries and businesses whose buildings, furniture, machinery, or equipment were damaged by arson or vandalism during the movement may import replacement goods at a 50% discount on applicable customs duty and excise duty. The relief is available on the basis of an insurance surveyor’s report confirming the goods damaged.
Star hotels that had already used their one-time customs duty exemption under Schedule-4 of the Customs Duty Act 2081 may use that facility once more for restoration imports, without double benefit (Section 27(2)). Casino businesses damaged during the movement are relieved of royalty and renewal fees for the period they were not in operation (Section 27(3)).
Excise Ticket Write-Off — Section 33
Excise tickets wholly or partly destroyed by burning during the movement, or otherwise rendered unusable, may be destroyed and written off through an on-site verification process conducted under the coordination of the concerned Inland Revenue Office chief, with representatives of the District Administration Office and the District Treasury Controller Office present.
2. Tax Settlement Windows — Pay the Tax, Waive the Rest
The Bill’s most widely applicable provisions offer a consistent formula: pay the outstanding principal tax plus 1%, and all interest, penalties, late fees, and additional charges are waived. These windows cover three distinct situations.
Returns Filed but Tax Unpaid — Section 44
Taxpayers who have already filed their VAT, income tax, or excise returns but have amounts outstanding as of Jestha 15, 2083 may settle by paying the balance plus 1% by end of Poush 2083. All fees, additional charges, penalties, interest, and late fees are waived on settlement.
Tax Assessed but Unpaid — Section 45
Where the Inland Revenue Department or its offices completed a tax assessment (including amended assessments and excise assessments) by Jestha 15, 2083, and the assessed amount remains unpaid, the same formula applies: pay the assessed amount plus 1% by end of Poush 2083, and all fees, additional charges, penalty, and remaining interest or late fees are waived. Telecommunication service providers are excluded from this provision.
Pending Disputes — Withdraw and Settle — Section 46
Taxpayers with assessments currently under administrative review at the IRD, or before any court or judicial body, may withdraw the case and settle on the same 1% additional formula by end of Poush 2083. The Government of Nepal may also withdraw cases where it is the appellant at the Supreme Court level, if the taxpayer settles. Telecommunication service providers are excluded.
Revenue Leakage Cases — Section 50
Income tax and VAT cases filed under the Revenue Leakage (Investigation and Control) Act 2052 and currently pending in court may also be settled: deposit the assessed claim amount plus 1% and apply to the concerned office by end of Poush 2083. The Government may then waive the penalty and withdraw the case.
Post-Clearance Audit Assessments — Section 34
Importers who have not paid customs duty assessed through post-clearance audit by end of Baishakh 2083 — or who have such cases pending at the Revenue Tribunal or other courts — may pay the full customs duty, excise, and VAT assessed, withdraw any pending case, and have all penalty and interest up to the date of application waived. Deadline: end of Poush 2083.
3. Bringing Taxpayers Into the Net
Several provisions are explicitly designed to bring previously non-compliant individuals and entities into the tax system with a clean slate.
Non-PAN Holders — Section 40(1)
Individuals who earned taxable income without ever obtaining a PAN may now obtain a PAN, file returns for FY 2079/80 through 2082/83, pay the tax due, and have all fees and interest waived. Returns and tax for years prior to 2079/80 need not be filed at all. Deadline: end of Poush 2083.
Inactive PAN Holders — Section 40(2)
Taxpayers who obtained a PAN but then had no income or business activity — and who have not filed returns since FY 2081/82 or earlier — may either deregister or reactivate by filing the FY 2082/83 return and paying the tax. Prior years’ returns are not required. PANs not dealt with by the deadline will be automatically cancelled by the system; reactivation after that point will require settling all outstanding returns, tax, fees, and interest.
Active Taxpayers with Outstanding Dues — Section 40(3)
Active PAN holders with tax and returns outstanding may pay the outstanding tax plus 1% and file the return by end of Poush 2083. All fees and interest are waived.
VAT-Registered Persons with Uncollected or Unfiled VAT — Section 41
VAT-registered persons who conducted taxable transactions but did not collect or did not file VAT may regularise by filing returns through Chaitra 2082 and paying the tax plus 1% by end of Poush 2083. All interest, additional fees, and penalties are waived.
Excise Duty — Unlicensed and Non-Renewing Operators — Section 43
Persons who traded in excisable goods without collecting excise may file the required return, pay the excise plus 1%, and have late fees and penalties waived by end of Poush 2083. Excise licensees who failed to renew may regularise for FY 2082/83 by paying the renewal fee by end of Ashoj 2083, with renewal fees and penalties for remaining years waived. Licences not renewed by then are automatically cancelled.
Companies Under the Companies Act — Section 48
Companies registered under the Companies Act 2063 that have not filed returns, renewed, or paid required taxes, fees, or charges may file FY 2082/83 returns and pay the current year’s dues by end of Asoj 2083. All prior tax, fees, charges, interest, and penalties are waived — whether the company wishes to continue operating or to deregister.
4. Sector-Specific and Entity Waivers
Several provisions apply to defined categories of entities rather than taxpayers generally.
Associations and Non-Profits — Section 38
Non-profit organisations registered under the Associations Registration Act 2034 — whether or not they hold a tax-exempt status under the Income Tax Act 2058 — may file FY 2082/83 returns by end of Poush 2083 and have all tax, interest, and fees on taxable income from donations, contributions, and gifts waived. Organisations whose only income is donations need not file returns at all.
Universities, Diplomatic Bodies, and Development Partners — Section 37
Universities, diplomatic bodies, development partners, and non-resident investors are relieved of the obligation to file income returns or pay income tax (beyond withholding at source) up to FY 2082/83. Community schools and community health institutions that file FY 2082/83 returns and pay the tax by end of Poush 2083 are relieved of all prior returns and have earlier tax, interest, and fees waived.
UN, International Organisation, and Diplomatic Mission Staff — Section 47
Resident persons employed in UN offices, internationally recognised bodies, or foreign diplomatic missions without Vienna Convention exemption — who received remuneration but have not filed returns or paid income tax — may obtain a PAN, file returns and pay tax for FY 2079/80 through 2082/83 plus 1%, and have all interest and fees waived by end of Mangsir 2083. Prior years are fully forgiven.
Insurance Agents — Section 39
Insurance agents who did not collect VAT for FY 2082/83 or earlier have the applicable tax, interest, additional fees, and penalty automatically waived. No return filing is required.
Gold and Jewellery Traders — Section 31
Sellers who did not collect luxury fee on gold and gold ornaments or VAT on diamonds, gems, and stones before Bhadra 2, 2082 have those amounts automatically waived — no return or application is required. Persons who did not collect VAT on the manufacture and repair of gold and silver ornaments for FY 2082/83 or earlier also have the tax, interest, and fees on those amounts waived.
Paneer Sellers — Section 42
Unpaid VAT on past sales of milk-based paneer is waived in full. No action required.
Foreign-Aid Project Contractors — Section 28
Non-resident construction or service providers working on projects under foreign-aid agreements between the Government of Nepal and donor agencies — where the agreement or its implementation letter provides for income tax exemption — receive income tax exemption on income from fiscal years prior to 2082/83, including any branch-level tax that would otherwise apply.
NEA Hydropower Projects — Section 29
For Nepal Electricity Authority hydropower projects financed under agreements with the European Investment Bank or the Asian Infrastructure Investment Bank — where no tax exemption exists in the agreement — master-list imports attract only 1% customs duty. All remaining taxes, charges, fees, and duties are waived and converted into Government of Nepal equity in NEA.
5. Customs, Excise, and Other Specific Measures
50% Customs Duty Cut on Fuel — Section 35
Motor spirit petrol (HS 2710.12.10), kerosene (HS 2710.19.10), and high-speed diesel (HS 2710.19.30) importers benefit from a 50% reduction in customs duty from Jestha 15, 2083. Simultaneously, a new 10% green tax is imposed on the import of petrol and diesel. The Government retains the authority to modify or remove both measures by gazette notification at any time.
Waiver of Old Sales, Entertainment, Hotel, and Contract Tax Arrears — Section 30
Outstanding amounts under the Excise Duty Act 2015 and the old hotel, entertainment, contract, and sales taxes (replaced by the VAT Act) are automatically waived. Income tax arrears of inactive non-PAN holders assessed under the Income Tax Act 2031 may be written off by the concerned office.
Expired or Unusable Goods Write-Off — Section 32
Raw materials and finished or semi-finished goods held in industrial premises that are expired or unusable may be destroyed and written off through a supervised on-site process by end of Poush 2083, without claiming excise refund. Reusable items may be permitted for reuse after recording.
Shipping Container Fee Waiver — Section 36
Domestic and foreign shipping companies with containers that have been sitting in customs premises for a long time — whether or not confiscated — may apply to take them back free of all fees and demurrage, by end of Mangsir 2083.
Bank Guarantee Release / Cash Deposit Refund — Section 51
Industries that imported raw materials under the bank guarantee or passbook facility, manufactured finished goods, but could not export in time may still qualify for bank guarantee release or cash deposit refund — provided they export the finished goods, receive the foreign currency, and apply with documentary evidence by end of Mangsir 2083.
Diplomatic Vehicle Transfers — Section 52
Foreign missions or donor agencies wishing to transfer vehicles imported under diplomatic or duty privilege — manufactured within the last ten years — to a Government of Nepal body may do so by end of Poush 2083 with full exemption from customs duty, VAT, excise, and road construction fee. This provision takes effect from Shrawan 1, 2083.
Annual Finance Act Dues — Section 49
Persons liable under annual Finance Acts who underpaid or failed to file may settle by paying the outstanding amount plus 1% with the required return by end of Mangsir 2083. Penalties, interest, and fees are waived. Assessed dues and pending court cases also qualify under the same formula. Casinos with no pending litigation may regularise their licences for FY 2083/84 on payment of a 15% renewal-fee penalty.
Key Deadlines at a Glance
The table below summarises the critical deadlines across the main provisions. Most windows close at end of Poush 2083 — acting early is advisable to allow time to gather documentation and obtain PAN registration if needed.
| Deadline | Provisions Covered |
|---|---|
| End of Ashoj 2083 | Companies Act regularisation / deregistration (Section 48); Excise licence renewal for continuing businesses (Section 43(2)) |
| End of Mangsir 2083 | Shipping container returns (Section 36); Bank guarantee / cash deposit (Section 51); UN/diplomatic mission staff tax settlement (Section 47); Annual Finance Act dues (Section 49) |
| End of Poush 2083 | Most settlement windows: filed-but-unpaid tax (Section 44); assessed dues (Section 45); pending disputes (Section 46); revenue leakage cases (Section 50); non-PAN / inactive PAN / active taxpayer income tax (Section 40); VAT waiver (Section 41); excise waiver (Section 43(1)); NGO / association waiver (Section 38); community schools (Section 37); post-clearance audit (Section 34); expired goods destruction (Section 32); diplomatic vehicle transfers (Section 52) |
What This Means in Practice
The Finance Bill 2083 concession framework is genuinely broad — broader than most recent budgets — but it is not self-executing. Each provision has specific eligibility conditions, documentary requirements, and deadlines. The 1% addition formula is straightforward, but determining whether a particular taxpayer qualifies, which provisions apply to their situation, and what documentation is needed requires careful review.
For businesses with outstanding assessments or pending disputes, this window may represent the most cost-effective resolution available: settling at principal plus 1% is almost certainly cheaper than continued litigation or accruing further interest. The decision to withdraw a sub-judice case is, however, irreversible — it should only be made after a clear-eyed analysis of the merits and likely outcome of the case.
For individuals and entities currently outside the tax net, the combination of PAN registration, four-year return filing, and interest/fee waiver represents a clean path to compliance that is unlikely to be offered again on these terms.
Detailed Provision Reference — Bilingual (Nepali/English)
The full bilingual provision-by-provision reference document — including the complete Nepali and English text of each concession with eligibility criteria, applicable relief, and effective dates — is available below.
If your business or organisation has outstanding tax dues, pending disputes, or compliance gaps that may be addressed under the Finance Bill 2083 concessions, you should assess your position and act before the relevant deadlines.
Get in touch with our team to know more →
This article is prepared by Shankar Associates, Chartered Accountants based on the Finance Bill 2083 as introduced. Final provisions are subject to enactment. This article is intended for general informational purposes and does not constitute legal or tax advice. For guidance specific to your organisation’s position under these provisions, please contact professionals in the matter.