. KATHMANDU — The Rastriya Swatantra Party (RSP) has introduced a multi-rate system in the Value Added Tax (VAT) for the first time.

Finance Minister Dr. In the budget brought by Swarnim Wagle, VAT has been levied on electricity tariff and on the services of ride-share companies. Under the multiple rate of VAT, 5 percent VAT has been levied on electricity tariff and ride shares.

VAT on electricity tariff will increase the price of daily consumables and construction materials. Until now, companies registered with VAT could avail VAT credit on the goods and services purchased by them.

No industry or establishment will be allowed to take credit on the VAT of electricity tariff levied by the government through the budget.TAG_OPEN_p_21 On the basis of the bill, customers in the industrial sector pay more tariffs. The VAT imposed in this way will increase the cost of production of electricity-consuming goods like sticks, cement, etc. The government has made a provision not to give credit on the VAT levied on electricity bills, but can only show the expenses. Due to this provision, the industries registered in VAT will not be able to get credit on the VAT paid on electricity tariff, so it will have an impact on the price of the finished goods.

The cost of medicines and dairy products industries that are not registered with VAT will also be costlier with the VAT levied on electricity tariff. Industries that get VAT credit will also not get credit on VAT paid on electricity bills, and industries such as medicines that do not have VAT registration will also not get credit.

In the case of consumers, VAT will not be levied on consumption up to 50 units.TAG_OPEN_p_19 VAT will be levied on the consumption of more than 50 units. This will increase the expenses of households, especially those living in urban and Terai areas.

} “The current export trade will also be affected due to the policy of imposing VAT on electricity and not giving credit on it,” said an industrialist. ‘

} The unrest in the Middle East has led to a sharp increase in the prices of daily consumables. At the same time, the price of rice, lentils, flour and medicines to be taken during the illness will increase due to the increased VAT of electricity by the government. The government has added 3 percent additional fee to those seeking treatment in private hospitals.