Section 5: Value added Tax to be levied

1) Notwithstanding anything contained in this Act, the value-added tax shall be levied on the following transactions: –

(a) On goods and services supplied within Nepal,

(b) On goods and services imported into Nepal,

(c) On goods and services exported outside of Nepal.

2) The tax shall be levied on the value of each taxable transaction.

3) Notwithstanding anything contained in Sub-section (1), the tax shall not be levied on the transaction of goods and services as referred to in Schedule -1. In addition, the tax paid before the purchase of such goods and services shall not be allowed to be deducted pursuant to Section 17 and refunded pursuant to Section 24.