Tourism entrepreneurs file writ against govt’s decision to impose VAT on air tickets

KATHMANDU, July 27: Tourism entrepreneurs have knocked on the doors of the Apex Court and filed a case against the government's decision to impose value-added tax (VAT) on air tickets.

Stating that the VAT imposed on the sale of air tickets will have a negative impact on the tourism business, the Nepal Association of Tour and Travel Agents (NATTA) filed a case against the government in the Supreme Court on Thursday. Prior to the action, tour agents as well as airline operators had been opposing the government's decision over the same.

President of NATTA, Ramesh Thapa said that they had to go to court as the imposed VAT on air tickets would have a serious impact on the ongoing tourism business. 

Thapa said that the implementation of VAT is not easy as the nature of air transport services and its business is different from other services. Stating that the notice issued by the Inland Revenue Department was unclear, VAT was imposed out of whims without conducting any proper study nor the effects of the decision. Thapa also clarified that they had no objection to the government’s decision to impose a five percent tax on tour packages.