The Government of Nepal has issued specific regulatory guidelines regarding the implementation and collection of the 3% "Education Service Fee" (ESF) applicable to private educational institutions.
As outlined in the legal annex, these measures are designed to formalize the revenue collection process and provide clear pathways for dispute resolution between institutions and tax authorities.
Below is a breakdown of the key regulatory updates based on the official documentation:
- Who is Liable: All private-sector educational entities including schools, colleges, universities, and technical institutes must collect a 3% fee on student charges.
- Exemptions: Educational institutions operating under "public educational trusts" are exempt from this levy.
- Compliance Deadlines: Institutions are required to collect the fee via official invoices and must deposit the funds, along with detailed statements, with the Inland Revenue Office within 25 days of the end of each four-month period.
- Penalties for Evasion: Failure to deposit the fee incurs a 15% annual interest charge, and failure to submit statements results in a penalty of 1,000 rupees per statement. Tax officers are authorized to assess fees and impose fines of 25% on identified unpaid amounts.
- Dispute and Appeal Process: Institutions dissatisfied with a tax assessment have 30 days to apply for an administrative review by the Director General of the Inland Revenue Department. If disputes remain unresolved, institutions have the right to appeal to the Revenue Tribunal within 35 days of a final decision or the expiration of the decision deadline.
- Administrative Oversight: The Inland Revenue Department is responsible for the overall administration and collection procedures of the Education Service Fee.
