Steps to File for GST in Nepal

Goods and Services Tax (GST) is a crucial aspect of Nepal’s tax system. Whether you’re a business owner or an individual, understanding the GST registration process is essential. This guide will walk you through the steps to file for GST in Nepal, providing clear and concise information to help you navigate the process smoothly.

Who is Required to Register for GST?

GST registration is mandatory for certain businesses and individuals in Nepal. The following entities must register for GST:

1. Companies with an annual turnover exceeding the specified threshold
2. Importers and exporters of goods and services
3. Businesses providing taxable goods or services
4. Government agencies and non-governmental organizations engaged in commercial activities
5. Foreign companies operating in Nepal
6. E-commerce platforms and online businesses
7. Professionals offering specialized services

It’s important to note that even if your business falls below the turnover threshold, you may still choose to register voluntarily to take advantage of certain benefits.

What Documents are Needed for GST Registration?

To ensure a smooth GST registration process, gather the following documents:

1. Permanent Account Number (PAN) certificate
2. Company registration certificate
3. Memorandum and Articles of Association (for companies)
4. Partnership deed (for partnerships)
5. Proof of business address
6. Recent passport-sized photographs of proprietors or partners
7. Bank account details

Having these documents ready will streamline your application and help avoid delays in the registration process.

How to Apply for GST Registration Online?

Applying for GST registration online in Nepal is a straightforward process. Follow these steps:

1. Visit the Inland Revenue Department (IRD) website
2. Create an account or log in if you already have one
3. Select the “GST Registration” option
4. Fill out the online application form with accurate information
5. Upload the required documents
6. Review your application for errors
7. Submit the application and pay the registration fee

The online system will generate a unique application reference number. Keep this number safe, as you’ll need it to track your application status.

What is the Threshold for GST Registration?

Understanding the GST registration threshold is crucial for businesses in Nepal. The current threshold is:

• Annual turnover of NPR 5,000,000 (five million Nepalese Rupees) for goods
• Annual turnover of NPR 2,000,000 (two million Nepalese Rupees) for services

If your business meets or exceeds these thresholds, you must register for GST. However, businesses below the threshold can still opt for voluntary registration if they wish to claim input tax credits or expand their operations.

How Long Does the GST Registration Process Take?

The GST registration process in Nepal typically takes:

1. Online application submission: 1-2 days
2. Document verification: 3-5 working days
3. Field verification (if required): 2-3 working days
4. GST number issuance: 1-2 working days

In total, you can expect the process to take about 7-12 working days. However, this timeline may vary depending on the completeness of your application and the current workload of the tax authorities.

To ensure a speedy process:

• Double-check all information before submission
• Respond promptly to any queries from the tax department
• Follow up regularly on your application status

What are the Penalties for Late GST Registration?

Failing to register for GST on time can result in significant penalties. The Inland Revenue Department imposes the following fines for late registration:

1. A fixed penalty of NPR 10,000 for non-registration
2. An additional fine of NPR 1,000 per month for each month of delay
3. Interest charges on unpaid taxes during the unregistered period
4. Potential legal actions for prolonged non-compliance

To avoid these penalties:

• Keep track of your business turnover
• Register promptly when you meet the threshold
• Seek professional advice if unsure about your registration obligations

Remember, voluntary disclosure and registration can sometimes lead to reduced penalties, so it’s always better to come forward proactively.

Relevant Articles:

• How to Renew Your Company in Nepal
• PAN Registration in Nepal
• Steps to Register a New Business in Nepal

How to Obtain a GST Registration Certificate?

Once your GST registration is approved, obtaining your certificate is a crucial step. Here’s how to get your GST registration certificate:

1. Log in to your IRD account on the official website
2. Navigate to the “GST Registration” section
3. Click on “Download Certificate” or a similar option
4. Save the digital copy of your certificate
5. Print multiple copies for your records and display

Your GST registration certificate contains important information:

• Your unique GST identification number
• Business name and address
• Date of registration
• Type of business activity

Keep your certificate safe and display it prominently at your business location. You’ll need to provide this number on all your tax invoices and official communications related to GST.

What are the Responsibilities After GST Registration?

After successfully registering for GST, you have several ongoing responsibilities:

1. Maintain accurate financial records and invoices
2. Charge GST on applicable goods and services
3. File regular GST returns (usually monthly or quarterly)
4. Remit collected GST to the government on time
5. Keep your registration details updated
6. Comply with GST audits when required
7. Issue proper tax invoices to customers

Fulfilling these responsibilities ensures compliance with GST regulations and helps avoid penalties. Consider using accounting software or hiring a professional to manage your GST-related tasks effectively.

How to File GST Returns in Nepal?

Filing GST returns is a regular obligation for registered businesses. Here’s a step-by-step guide:

1. Gather all financial records for the tax period
2. Calculate your total sales and purchases
3. Determine the GST collected and paid
4. Log in to the IRD’s online portal
5. Select the appropriate GST return form
6. Fill in the required information accurately
7. Review the return for any errors
8. Submit the return and pay any due taxes

File your returns on time to avoid late filing penalties. The due date is typically the 25th of the month following the tax period. If you’re unsure about any aspect of filing, consult with a tax professional or the IRD helpline.

What is the Process for GST Deregistration?

There may come a time when you need to deregister from GST. The process involves:

1. Assessing eligibility for deregistration (e.g., business closure, falling below threshold)
2. Submitting a deregistration application to the IRD
3. Providing reasons for deregistration and supporting documents
4. Settling any outstanding GST liabilities
5. Undergoing a final GST audit (if required)
6. Receiving confirmation of deregistration from the IRD

Deregistration doesn’t absolve you from past GST obligations. Ensure all returns are up to date and any due taxes are paid before applying for deregistration.

By following this comprehensive guide, you’ll be well-equipped to navigate the GST registration process in Nepal. Remember to stay informed about any changes in GST regulations and seek professional advice when needed to ensure ongoing compliance.