06/04/2020
Notification by Nepal Government in Response to Covid-19
Taxation
As per decision of Nepal Government as on 18th Chaitra 2076, following reliefs are provided:
Income Tax
Time extension of filing of TDS return of Falgun month and related TDS deposit which was due on 25th Chaitra 2076 to 25thBaisakh 2077.
Extension of time limit of filing Revised Estimated Tax return and depositing second installment tax which was to be deposited by end of Chaitra 2076 to end of Baisakh 2077.
Person donating any amount in fund established by Nepal Government, State and Local level for prevention, control and treatment of infection of Covid-19 in F.Y 2076-77 will be eligible to deduct such amount as expense while calculating taxable income for such year.
VAT
Time extension of filing of monthly (Falgun), bimonthly (Magh-Falgun) and quardrimester (Mangsir-Falgun) VAT returns and VAT payments related to those returns which were due on 25th Chaitra 2076 to 25thBaisakh 2077.
If time limit of any application for VAT refund was to end during the time of lockdown, same limit is extended to Baisakh 2077.
Excise
Time extension of filing of Excise return of Falgun month and related tax payment which were due on 25th Chaitra 2076 to 25thBaisakh 2077.
Customs
Exemption of Custom Duty u/s 2(ma) for following items (items under point (a) and (b) must have reached Customs Point till 15thBaisakh 2077):
Import of medicines, medical supplies and equipment approved and notified by Ministry of health and population for prevention, control and treatment of infection of Covid-19.
Import of Face masks (Sub heading 63.07.90.90), Sanitizer (Sub heading 38.08.94.00) and surgical gloves (Sub heading 40.15.11.00).
Import of Induction stove (Sub heading 85.16.60.00)
Items imported in under point (a) and (c) should be affixed with a sticker and the date of supply should be visible. These items should be sold at price not exceeding its MRP declared by Ministry of Health and Population.
If there is any misuse of materials purchased under clause (a), the exempted duties and taxes will be recovered as penalty.
Miscellaneous
Time extension of filing return of Education Service Charges u/s 8(2), Telephone Ownership Tax u/s 14(2) and Telecom Service Charges u/s 15(3) of FA 2076 to 25thBaisakh 2077.
Other matters
OCR
The date of submission of any information or reports to be submitted to the Office of Company Registrar has been extended till Baisakh end 2077 including those reports and information demanded by the office.
SEBON
The time limit to clear the remaining amount after transactions in securities market has been extended up to Baisakh 2077.
Similarly, time extension of submission of details as per Securities Act by listed companies to end of Baisakh 2077.
Transport related matter
Time limit for renewal of driving license, vehicle, pollution control, and route permits has been extended up to the end of Baisakh 2077. Also, fees, taxes or late fines on such delayed payments to be waived off.
Private firms
Time limit of renewal of private firms which was to be renewed by end of Chaitra 2076 has been extended up to end of Baisakh 2077 and fees, taxes or late fines on such delayed payments to be waived off.
Wages, Salary and Remuneration
In case of formal employment, the employer shall provide the wages or salary or remuneration continuously to its workers and employees.
In case of non-operational tourism sector entities, the employer shall provide wages or salary or remuneration to its workers and employees (working in daily or monthly wages or salary basis) of / upto Chaitra 2076 in advance within Chaitra end 2076.
Government of Nepal shall deposit the amount as to be submitted by the employer and employee’s contribution to the Social Security Fund (SSF) for those entities and employees listed in the SSF scheme for the month of Chaitra 2076.
Time extension of deposit of Principal and interest amount of loan taken from Employees Provident fund and Citizen Investment Trust to end of Baisakh 2077. Also, provision of rebate in interest rate.
If request for extension of time limit of any public procurement agreement entered by government before lockdown is done, such limit can be extended up to one month. In case of such time extension,if bank guarantees are expiring on Chaitra 2077, the bank issuing such guarantee should extend such guarantee up to one month after lockdown is over without any additional fees.
Insurance
For those insurance policies whose insurance period has ended in the period affected by covid 19, insurance Companies to renew the policies if insurance holders apply in written letter via electronic medium.
In case of Life Insurance Premium, it shall be accepted without interest upto Baisakh end, 2077.
The time limit for renewal of license of Insurance agent and Surveyors which were due for renewal by Chaitra end has been extended up to the end of Baisakh, 2077. No any late fees and fine/penalty will be imposed.
In case of Non-life insurance; if insurance claim received currently even through electronic medium shall be accepted. When condition becomes normal, company shall appoint surveyor to assess the insurance claim.
Bank
BFIs categorized as A, B and C Class is required to maintain their cash reserve ratio of 3% against the existing 4%.
Interest Rate (Bank Rate) on loan disbursed from NRB to BFIs as per the provisions of the prevailing Act has been fixed at 5% against existing 6%.
The Standing Liquidity Facility (SLF) which works as ceiling limit of Interest Corridor has been fixed at 5% (Previously 6%), Repo Rate which works as Tactical Rate has been fixed to 3.5% (Previously 4.5%) and Lower limit for Collection of Deposit has been fixed at 2% (Previously 3%).
The limit of refinancing fund created by NRB has been fixed at NRs. 60 Billion (Previously 50 billion).
Loans and Advances (including credit card) need not to be categorized in lower category due to the reason of delay / non-collection of installments which become due during the month of Chaitra 2076 but get collected within Ashad 2077.
If any borrower wishes to make payment regards to point no.5 within Chaitra 2076, a 10% rebate on interest shall be provided to such borrowers. Such rate shall not be below than the current base rate.
It is not compulsory to categorize the loan in the watch list for the month of Chaitra, on the basis of non-renewal of loan which was due for renewal during the month.
The tenure of all type of short term loans that are to be repaid during Chaitra 2076has been extended by further 60 days.
Tourism and Transportation Sector’ borrowers who were regular in repayment of loans and interest up to end of Poush 2076 shall be facilitated with new loans on requirement basis within 5 days of application by charging maximum 0.25% of loan as processing fee.
New loans shall be provided to the firm/company by fulfilling necessary requirements within 5 days for the purpose of import of medical supplies and equipment, food supplies and other items for COVID-19 control & prevention.
Transactions from electronic means such as service enable, pin reset, password reset, authentication, verification and others shall be encouraged by accepting the requests from customer’s telephone / email without any delay and ensuring proper risk management. Charges will not be levied on such service upto Ashad 2077.
BFIs allowing capitalization of the interest on loans up Poush and Chaitra end, 2076with approval from NRB can further capitalize the interest up to end of Ashad, 2077.
Institutions issuing bank guarantee can make payment to beneficiary within 7working days after the date of issuance of notice by GoN in ‘Infectious Disease Act, 2020’. Also, bank guarantee must be renewed without charging any fees during this period on request for renewal from the customers.
The amount contributed by the BFIs to the Corona Infection Prevention, control &Treatment Fund established by Central & Province Government of Nepal will be eligible spending of Corporate Social Responsibility (CSR).
The loan disbursed to private health service providers for expansion of their service capacity to enable them in the treatment of COVID 19 can be considered as loan disbursed for priority sector lending.
In view of the aggregate impact on financial system, no penalty will be levied on non-compliance of the regulatory/ supervisory financial ratios which is required to be complied for the month of Chaitra 2076.
Those small and medium enterprises which are affected by COVID-19 pandemic shall be given priority for use of NRB’s refinancing facility. This type of facility is also provided for Working capital loan.
Countercyclical buffer requirement as per the provisions of Capital Adequacy Framework 2015 has been deferred.
Disbursement of concessional loan will be done within 7 days of application made by those persons who were not able to travel for foreign employment, although having visa approval / permission and wish to operate / start industry or business after normalization of impact of COVID-19.
