VAT on Air Travel Services (2080-81)​

Provisions Regarding VAT Implications on Air Transport Services in Nepal (2080-81)

  1. Business providing Air Transport Services shall be registered in VAT within 30 days of exceeding the threshold limit of Rs. 20,00,000.00 worth of taxable transaction.
  2. Air Transport Service Provider should give an application for the VAT Registration. A copy of license from the regulatory body shall also be attached along with the application in case of the International Air Transport Service Provider.
  3. Input VAT Credit shall be allowed in case of the goods remaining in stock at times of registration. Such credit shall be allowed only for the goods purchased a year ago from the date of registration. The details regarding such credit shall be provided within 15 days of registration.
  4. Travel Agency Business should issue an invoice on the amount of purchase of air tickets from the service provider including profit and commission. In case the air service provider has sold the tickets to the travel agencies on final consumer’s price, Travel agencies should not add their profit and commission in the ticket price. However, in such case, travel agency shall issue an invoice to the air service provider mentioning of the service charge or commission.
  5. In case of Domestic Air Transport Service, VAT shall be imposed on the Ticket Price. In case of International Air Transport Service, those who are leaving from Nepal, VAT shall be imposed on the ticket price up to the destination. Regardless of such flight tickets are booked from Nepal or outside Nepal, VAT is imposed on the ticket price when the person is flying from the airport of Nepal.
  6. In case of Two-Way tickets, VAT shall not be imposed on the ticket price of the person arriving to Nepal from other countries. VAT shall not be imposed on the tickets booked from Nepal by the person flying from other countries.
  7. International Air Transport Service Provider need not take permission to issue electronic invoices. However, the authorized body shall be informed about the software used to issue electronic invoices.
  8. VAT collected on such service provided shall be set off with the VAT paid on purchase and any excess shall be deposited within 25 days of the next month. However, person carrying out annual taxable transaction less than 1 crore has the option to deposit VAT in every four months.
  9. No VAT shall be imposed on the air tickets purchased before the implementation of VAT on such services and person flying after the implementation of this Act. However, such details shall be maintained and provided to IRD.
  10. In case any tickets are cancelled, ticket amount is refunded by any reason shall be set off accordingly maintaining Debit and Credit Note.


One Comment on VAT on Air Travel Services (2080-81)​

    December 1, 2023

    The implementation of VAT on air travel services seems like a fair step towards achieving financial stability, benefiting both the economy and travelers in the long run.


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