This clarification comes following public confusion over the implementation of the government’s Finance Act 2083, which introduced VAT on electricity. Under the Finance Act 2083, the NEA was registered for VAT effective Shrawan 1, 2083. Bills issued throughout Shrawan 1 included VAT. However, the majority of these bills reflected electricity consumed during Ashar. Consumers were unsure whether the new tax applied retroactively to electricity used prior to Ashar 32 cutoff.
Following coordination with the Inland Revenue Department, the NEA confirmed that electricity consumed prior to Shrawan falls under "basic necessity items" and is 100% exempt from VAT. Any extra VAT paid on Shrawan bills for Ashar usage has been recorded as an advance payment. This overpaid VAT will be automatically deducted from the total amount due in the Bhadra billing cycle.
Moving forward, VAT will only apply to electricity consumed on or after Shrawan 1. This charge will appear on the bills issued at the end of Shrawan.
The NEA issued a formal public notice assuring millions of affected customers that they will automatically receive relief and do not need to take further manual action.
