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Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha has expressed serious concern after consumers complained that Value Added Tax (VAT) was added to electricity bills for mid June electricity consumption, following the implementation of the Economic Act, 2026, which imposed VAT on electricity from July 17.

The complaints emerged after electricity bills issued during the first week of Shrawan included VAT on electricity consumed in Asar. In response, Minister Shrestha directed the Nepal Electricity Authority (NEA) to clarify the legal and practical aspects of the issue and ensure that consumers are not treated unfairly.

The minister stressed that the implementation of the tax should not place an unnecessary financial burden on consumers and instructed the NEA to resolve the confusion without delay.

Following the minister’s directive, the NEA said it has formally sought an official legal interpretation from the Inland Revenue Department (IRD) on whether VAT should apply to electricity consumed in mid June but billed in mid July. The authority has also requested clarification on whether VAT applies to the minimum demand charge.

According to the NEA, it will make any necessary billing adjustments in upcoming electricity bills based on the official opinion received from the Inland Revenue Department. The authority said this is expected to resolve the confusion and address consumers’ concerns.

Urjasanchar