Brick kilns come under VAT net

After a long debate and persuasion for last 18 years, brick kilns have accepted to be registered in the Value Added Tax (VAT).
Inland Revenue Department (IRD) today distributed certificates to 97 brick kiln operators, which came under VAT network.
“The process of bringing brick manufacturing kilns under the VAT network delayed due to misunderstanding since last 18 years,” said IRD director general Tanka Mani Sharma at the certificates distribution ceremony, here today.
He also hoped that the they will now be able to maintain a cordial relation in future.

The government will be able to mobilise around Rs 2 billion in VAT from some 500 brick kilns across the country.

Earlier the government has made it mandatory for brick kilns to be registered in VAT within October 17. The government has also decided to waive the VAT, fines and interest of the brick manufacturers prior to October 17, if they registered themselves within the deadline.

“The department will take action against those firms, which do not cooperate and register in the VAT by the deadline, Sharma said, wishing them a successful business. “Earn profits and also pay tax.”

The long-standing confusion has been solved in active participation of the brick manufacturers, who have already been paying excise duty.

But the government has scrapped excise duty from the current fiscal year.

Brick kilns in the Kathmandu valley have been paying Rs 150,000 excise duty annually, while the ones out of the valley have been paying Rs 112,000 annually as manufacturing tax.

It is estimated that there are some 700 brick kilns across the country.