Kathmandu. The Value Added Tax (VAT) will not be levied on electricity consumed before July 1.

After the controversy arose on this issue, the Inland Revenue Department has clarified that VAT will not be levied on the issue. The department has cleared the confusion between consumers and businessmen.

According to the Department, the Finance Act, 2083 BS has made provision for charging 5 percent VAT from the end consumer and 13 percent from other consumers. This provision came into effect only from July 1, 2083.

Even if the bill of electricity consumed up to Ashad 2083 BS is issued on or after July 1, 2083 BS, VAT will not be levied on the electricity consumed before mid-July.

The Department has clarified that VAT will be levied on the electricity consumption from 1st July, 2083 BS as the minimum charges and demand charges are also part of the electricity service.