Section 17: Classification of industries

1) For the purposes of this Act, industries are classified into the following:

(a) Micro-industry: An industry with the following conditions other than an industry requiring permission under section 8 is considered to be a micro-enterprise:

(1) with a fixed capital not exceeding two million rupees, excluding house and land;

(2) the entrepreneur himself or herself is involved in the operation and management of the industry;

(3) with a maximum of nine workers, including the entrepreneur;

(4) with annual transactions of less than ten million rupees;

(5) with the capacity of electric energy, fuel or other oil engine to be consumed by the engine, equipment or machine, if any, used being twenty KW or less.

(b) Cottage industry: An industry in the following condition is considered to be a cottage industry:

(1) based on traditional skills and technology;

(2) labour-oriented and based on specific skills or local raw materials and local technology, arts and culture;

(3) with the capacity of electric energy to be consumed by the engine, equipment or machine, if any, used being up to fifty KW;

(4) any industry mentioned in Schedule 2.

(c) Small industry: An industry with the fixed capital not exceeding one hundred fifty million rupees, other than a micro enterprise and cottage industry.

(d) Medium industry: An industry with a fixed capital exceeding one hundred fifty million rupees but not exceeding five hundred million rupees.

(e) Large industry: An industry with a hundred million rupees.

2) The industries mentioned in subsection (1) are classified into the following on the basis of the nature of goods or services to be produced from such industries:

(a) Energy-based industry: Industries mentioned in Schedule-3 engaged in the business of energy generation,

(b) Manufacturing industry: Industries manufacturing goods by using or processing raw materials, subsidiary raw materials or semi-processed raw materials,

(c) Agriculture and forest product-based industry: Industries mentioned in Schedule-4 manufacturing any goods from agriculture or forest product based raw materials or related to agriculture or forest products,

(d) Mining industry: Industries producing any metal or mineral substance other than metal by excavating or processing minerals,

(e) Infrastructure industry: Industries mentioned in Schedule-5 building and operating physical infrastructures,

(f) Tourism industry: Industries mentioned in Schedule-6 related to tourism services,

(g) Information technology, communication technology and information dissemination technology-based industry: Industries mentioned in Schedule-7 providing services of information, communication or information dissemination technology by using technology for the collection, processing and dissemination of information,

(h) Service industry: Industries mentioned in Schedule-8 producing or providing services.

3) In the case of an increase in the capital, capacity of, addition, change or alteration of the objective of, any industry under section 12, the industry is considered to be ipso facto classified into the
corresponding class under subsection (1).

4) Notwithstanding anything contained elsewhere in this section, the Government of Nepal may, on recommendation of the Board, make provisions to include any industry in the classification of industries or place any industry included in any one class under another appropriate class, by publishing a notice in the Nepal Gazette.

5) If any of such cooperatives as prescribed registered under the prevailing law intends to register an industry retaining the ownership of that cooperative, it may register the industry under this Act.

6) If the industries registered prior to the commencement of this Act intend to be classified under this Act, the industry registration body may update the classification by fulfilling the procedures as prescribed.
7) The Government of Nepal may make necessary alteration in the classification under subsection (1) or (2) by publishing a notice in the Nepal Gazette.