The Nepal Electricity Authority (NEA) has formally sought legal clarification from the Inland Revenue Department (IRD) following widespread public complaints over the inclusion of Value Added Tax (VAT) on electricity bills for power consumed before the new VAT provision came into effect.

Under the Finance Act 2026 (2083 BS), VAT on electricity became effective from Shrawan 1. However, consumers raised concerns after electricity bills issued during the first week of Shrawan included VAT on electricity consumed in Asar, triggering confusion over the implementation of the new tax.

In response, Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha directed the NEA to examine both the legal and practical aspects of the issue and ensure that consumers are not unfairly burdened by the tax implementation.

Following the minister's directive, the NEA requested an official legal opinion from the Inland Revenue Department on whether VAT should apply to electricity consumed before the law came into force but billed afterward. The authority has also sought clarification on whether VAT is applicable to the minimum demand charge.

The NEA said any necessary adjustments to future electricity bills will be made based on the official interpretation provided by the Inland Revenue Department, with the aim of resolving consumer concerns and ensuring compliance with tax laws.