FAQs

Industries that falls under cottage industries are:

• Handloom, tailoring, press work
• Woolen carpets, pashmina shawls, woolen garments, knitting work
• Carpentry, wooden designs, artwork, bamboo items, cane-based artwork and furniture, handmade papers
• Gold, silver, copper, and precious stone ornaments
• Leatherwork from hides tanned at the local level
• Stone sculpture work, statues, pottery work, painting, and artwork
• Handmade gift items of all kinds
• Making of traditional agricultural tools, utensils, etc
• Industry should fixed assets of up to two lakhs rupees, and consumes energy less than 5 kilowatts.

The valuation of fixed asset in an industry shall consist of the following assets

1. Land, physical infrastructure constructed in space, under-ground, water or under water,
2. Physical infrastructures above land ch (such as: sewerage, internal road, water distribution system, drinking water infrastructure),
3. Factory Office, factory building, building or godown,
4. Residential buildings constructed for employee or workers,
5. Electricity distribution and equipment’s related with such distribution,
6. Machinery, equipment, tools and reserved fittings,
7. Means of transportation,
8. Electrical equipment and office equipment,
9. Furniture, fixture,
10. Communication system and related system & equipments.

In addition to the mentioned assets, technical consultation and supervision expenses, pre-investment and festival operating expenses, and construction periods, which will be or are capitalized in various stages of construction phases, are designated to be recognized as a fixed asset of the industry.

Industries producing explosives including arms and ammunitions and gun powder,
1. Security Printing, Currency & Coins manufacturer,
2. Cigarette, bidi, cigar, chewing tobacco and industries producing other goods of a similar nature utilizing tobacco as the basic raw material and industry producing electric cigarettes (vape),
3. Microbrewery, Alcohol, beer producing industries,
4. Stone, ballast, sand excavation processing industry,
5. Industries producing radio communication equipment,
6. Industries mining of precious minerals and petroleum products ,
7. Liquefied petroleum gas (L.P.
8. refilling industries,
9. All kinds of industries that produce drone products or provide services through drone,
10. Other industries that need to take permission as prescribed by the prevalent laws.

Notwithstanding anything contained in prevailing law, registration charges shall not be levied for the registration of micro enterprises.
Micro Industries already under operation at the time of commencement of this Act and being registered pursuant to this Act are entitled to 100% income tax exemption.

Industries registered under the ownership of female entrepreneurs only are entitled to following additional benefits and concessions:

1. 35% exemption in existing industry registration fees.
2. 20% exemption in existing rate of registration of industrial property used inside the industries.
3. Female entrepreneur shall be given priority while allocating the areas inside industrial estate or industrial area.
4. In case such industries require loan for exporting produced goods, export finance will be provided to the industry depending upon the financial status of the transaction of the industry through banking channel from the “Financing Female Entrepreneurs Fund”.

Following exemption, facilities and concession shall be provided in addition to the exemption, benefits and facilities stated above:

1. Industries based on forest products may be provided with possessory right pursuant to existing laws over forest in any specified region through lease or promissory guarantee with prescribed conditions.
2. No fees or royalty shall be charged in electricity produced by industry for its own consumption. Such industry willing to sell surplus electricity to any other industry, may sell so pursuant to prevailing laws in the rate agreed upon by both parties.
3. Government of Nepal may provide additional exemptions and facilities to “Export based industries and prescribed industries established inside Special Economic Zone or inside Government or Private industrial Estate” by publishing notice in Nepal Gazette.
4. Government of Nepal on the recommendation of Industries and Investment Promotion Board may provide additional exemptions and facilities by publishing a notice in Nepal Gazette to National Priority industries; or industry making optimum use of domestic raw materials, labour or skill; or industries established by inventing new technology or goods inside Nepal.
5. Government of Nepal may provide exemptions in demand charge added in electricity cost under prescribed conditions and procedures.
6. Government of Nepal may provide grants in the form of seed capital to cooperatives, micro industry, small and cottage industries to establish industries inside Under Developed Region under prescribed conditions.
7. Industries operating under foreign investment may be given approval to import goods produced by the head office located in foreign countries for production, market development and promotion of new goods for a prescribed time period under prescribed terms and conditions.
8. Except for tobacco and liquor industries, government of Nepal may provide incentives, exemptions, benefits or concessions to the production oriented industries, industries related to agriculture and forest products and minerals industry.
9. The exemption may be provided on the custom duty to be levied to the micro and cottage and small scale industries while importing novel technologies including machineries, tools and equipment as required for enhancing capacity of such industries.
10. The Government of Nepal may make special arrangement in relation to providing incentives, exemptions, benefits or concessions to the industries operating inside industrial zone, product specific zone and industrial cluster.
11. The Government of Nepal may provide incentives, exemptions, benefits or concessions to the industries established in the under developed, undeveloped and least developed regions.