Tax Office Enforces Operating Guidelines for Jewelry Skill Promotion Fee

The Inland Revenue Department has introduced a formal procedural guideline to regulate the collection and administration of the skill promotion fee imposed on domestic sales of gold and silver jewelry, national media outlets reported on Tuesday.

The measure executes Section 14 of the Finance Act 2083, which established a 0.5 percent skill promotion levy on precious metal jewelry and ornaments sold to ultimate consumers in Nepal. IRD Information Officer Keshav Raghubanshi confirmed that the new procedural manual governs administration, collection, book-keeping, reporting, audits, and appeals, according to reports by Newspolar, Nagarik News, Kendrabindu, and Nepal News.

Under the guidelines, gold and silver traders must collect the 0.5 percent fee directly from buyers at the exact point of sale. Jewellers are required to issue standardized invoices and record transactions on an accrual accounting basis. Regardless of whether any sales occur during a given month, businesses must file their monthly returns with the relevant tax office by the 25th day of the subsequent month.

Failing to submit these monthly statements on schedule will incur a daily penalty of 0.05 percent of the due levy or Rs 1,000 per filing, whichever sum is greater. Retailers must also remit the collected funds into the designated government revenue code 11413 by the 25th of each month, with overdue deposits subject to a 15 percent annual interest rate.

The regulatory directive also resolves longstanding confusion regarding customer jewelry trade-ins. When a buyer exchanges old gold or silver ornaments for new items of equivalent weight and value, no skill promotion fee will be assessed. However, if the transaction involves additional weight, the 0.5 percent fee applies to the added metal's value as well as all associated making charges and wastage fees (jyala-jarti).

To prevent illicit trading, the guideline mandates that members of the public selling bullion or used ornaments to jewellers present official government identification—such as a citizenship certificate, national identity card, driving licence, or Permanent Account Number (PAN)—alongside valid proof of initial purchase. Sellers offering items purchased overseas must provide customs documentation.

In addition, all jewelry artisans (karigars) must register for a PAN. Traders transporting precious metals between retail stores and workshops must carry officially stamped challans in the prescribed format. Outlets must also display notice boards detailing the fee rules. Tax officials retain the power to reassess evaded amounts, and businesses found concealing sales, splitting transactions, or evading the levy face an additional 25 percent penalty on top of the determined assessment.