Supreme Court intervenes: VAT on air tickets temporarily suspended

KATHMANDU: In a significant development, the Supreme Court issued an interlocutory order on Sunday, directing the government to halt the implementation of value-added tax (VAT) on air tickets. This order came as a response to a writ petition submitted by the Nepal Association of Tours and Travels Agent (NATTA), seeking relief from the newly proposed VAT measure.

Justice Anil Kumar Singha, presiding over a single bench, issued the order and summoned the government officials for further discussions on the matter.

NATTA, on July 17, had approached the apex court seeking a mandamus with certiorari against the government’s decision to impose VAT on air tickets. The imposition of VAT was part of Finance Minister Dr. Prakash Sharan Mahat’s budget presentation for the current fiscal year.

Tourism entrepreneurs, represented by NATTA, vehemently argued that the introduction of VAT on air tickets would not bode well for the tourism industry.

They expressed concerns that this move could adversely impact their businesses and burden travel companies and passengers alike. Citing potential repercussions on the tourism sector, NATTA firmly pressed for the suspension of the VAT implementation.

With the Supreme Court’s interlocutory order in place, the government is temporarily restrained from proceeding with the VAT implementation until further deliberations take place.

This move is expected to provide a respite for the tourism industry, giving both the authorities and stakeholders an opportunity to engage in constructive dialogue and reach a balanced resolution.