NEA to Adjust VAT Paid on Asar Electricity Bills in Next Billing Cycle

The Nepal Electricity Authority (NEA) has announced that the Value Added Tax (VAT) collected on electricity consumed during Asar will be adjusted in customers' Bhadra electricity bills. The decision follows clarification from the Inland Revenue Department after confusion arose over the implementation of VAT under the Finance Act 2083. Although NEA was registered for VAT from Shrawan 1, 2083, many bills issued in Shrawan covered electricity consumed during Asar, creating uncertainty over whether VAT should apply to that period. According to the NEA, the Inland Revenue Department has confirmed that electricity consumed up to Asar 32 is exempt from VAT, as it falls under essential goods supplied before the authority's VAT registration took effect. Customers who have already paid VAT on their Asar electricity bills will have the amount treated as an advance payment and automatically adjusted against their Bhadra bills. The authority also clarified that VAT will apply only to electricity consumed from Shrawan 1 onward, with the tax reflected in bills issued at the end of Shrawan or during Bhadra. The move is expected to provide relief to millions of electricity consumers who had paid the additional tax.