Indirect Taxes
2017 & 2021/2022
2025/2026 Schedule
Excise Rates — Overview
| Aspect | 2017 | 2021/2022 |
|---|---|---|
| Rate range | 30%–75% | 20% (food/beverage); 100% (tobacco and spirits) |
| Scope | Primarily restricted to domestically manufactured alcoholic beverages. Government also collects fees for liquor exports and excise permit fees for import of beer. | Expanded base: food/beverage items (pasta, juice, ice cream, nuts, sugar, water) added at 20%; tobacco at 100% |
| Policy mechanism | Domestic levy on select produced/imported items | "Excise equalization rates" applied on top of the 7% GST for products the government wishes to discourage (alcohol, tobacco) |
| Tobacco | Not levied (excise restricted to domestic alcohol in 2017) | 100% — applied as excise equalization rate on top of GST |
Excise Rates — Table A.2 (2017)
| Item | Rate |
|---|---|
| Liquor (rum, whisky, brandy) — Superior Brand | 30% |
| Liquor (rum, whisky, brandy) — Medium Brand | 60% |
| Liquor (rum, whisky, brandy) — Other Brands | 75% |
Excise Rates — Table A.4 (2021/2022)
| Item | Rate |
|---|---|
| Other nuts incl. areca and betel nuts | 20% |
| Sugar, incl. molasses and sugar confectionery (gum, chocolate) | 20% |
| Pasta | 20% |
| Fruit juice | 20% |
| Ice cream | 20% |
| Water beverage | 20% |
| Beverages (nonalcoholic), spirits and vinegar | 100% |
| Tobacco and its substitutes | 100% |
Tobacco Excise — 2017 vs. 2021/2022 Detail
| Feature | 2017 | 2021–2022 |
|---|---|---|
| Excise duty rate | Not applicable — excise restricted to domestic alcohol | 100% |
| Tax classification | N/A | Excise equalization rate |
| Application method | N/A | Applied on top of the standard 7% GST rate |
| Policy objective | N/A | Discourage use of products deemed harmful or socially undesirable |
| Revenue impact | No specific tobacco excise revenue reported | Contributed to "additional revenue from tobacco products" noted in FY2021-2022 |
Key Compliance Notes — Excise Tax Act 2025
Alcohol Content Basis: For beer, wine, and liquor, tax is calculated on the litre of alcohol content, not total liquid volume. | Annual Adjustments: From 1 July 2026, all specific sums (Nu. 1200, Nu. 1500, etc.) are adjusted annually to reflect CPI changes. | Registration Fees: Nu. 100,000/brand for imported liquors; Nu. 35,000 for domestic liquors. | GST Interaction: Products are also subject to standard 5% GST at point of sale in addition to excise rates.
Excise Tax Rate Schedule — Key Products (Effective 1 January 2026)
| Product | BTC Code | Commodity Description | Unit | Rate (2026) |
|---|---|---|---|---|
| Beverages — Alcoholic | ||||
| Wine | 2204.10.00 | Sparkling wine of fresh grapes | LTR | Nu. 1,200 / litre alcohol |
| Beer | 2203.00.00 | Beer made from malt | LTR | Nu. 1,200 / litre alcohol |
| Liquor (Whisky) | 2208.30.00 | Whiskies | LTR | Nu. 1,200 / litre alcohol |
| Liquor (Rum) | 2208.40.10 | Rum | LTR | Nu. 1,200 / litre alcohol |
| Alcoholic Beverages (other) | 22.07 / 22.08 | Ethyl alcohol (undenatured/denatured) | LTR | Nu. 1,200 / litre alcohol |
| Beverages — Non-Alcoholic | ||||
| Carbonated Drinks | 2202.10.20 | Aerated waters (added sugar/flavours) | LTR | 50% |
| Tobacco & Related | ||||
| Cigarette | 2402.20.00 | Cigarettes containing tobacco | NMB | Nu. 10 |
| Bedi (Biri) | 2403.19.20 | Biri | NMB | Nu. 10 |
| Chewing Tobacco | 2403.99.10 | Khani (chewing tobacco) | KGM | Nu. 1,500 |
| Other Tobacco | 2403.11.00 | Water pipe tobacco | KGM | Nu. 10,000 |
| Doma (Betelnut) | 2106.10.20 | Supari (betel nut cuts/powder) | KGM | Nu. 2,000 |
| Doma Khamtog | 2106.10.10 | Pan masala | KGM | Nu. 2,000 |
| Electronic Cigarettes | 85.43 | Electronic cigarettes | NMB | 100% |
| Motor Vehicles — Passenger Cars | ||||
| Family Car (Petrol ≤1,000 cc) | 8703.21.00 | Spark-ignition motor cars | NMB | 35% |
| Family Car (Petrol >3,000 cc) | 8703.24.00 | Spark-ignition motor cars >3,000 cc | NMB | 60% |
| Family Car (Diesel ≤1,500 cc) | 8703.31.00 | Diesel/semi-diesel | NMB | 50% |
| Family Car (Diesel >3,000 cc) | 8703.33.20 | Diesel/semi-diesel >3,000 cc | NMB | 70% |
| Family Car (Hybrid ≤1,500 cc) | 8703.40.10 | Hybrid motor cars | NMB | 2% |
| Family Car (Electric) | 8703.80.00 | Only electric motor for propulsion | NMB | 0% |
| Motor Vehicles — Goods & Special Purpose | ||||
| Goods Transport (Petrol ≤5T) | 8704.31.00 | Spark-ignition goods vehicles | NMB | 2% |
| Goods Transport (Electric) | 8704.60.00 | Only electric motor for propulsion | NMB | 0% |
| Tractors (all types) | 87.01 | Tractors | NMB | 0% |
| Motorcycles | ||||
| Motorbikes (≤50 cc) | 8711.10.00 | Motorcycles not exceeding 50 cc | NMB | 10% |
| Motorbikes (>800 cc) | 8711.50.00 | Motorcycles exceeding 800 cc | NMB | 50% |
| Motorbikes (Electric) | 8711.60.00 | Electric motor propulsion | NMB | 0% |