VAT bills for gyms in Nepal: a plain-language guide

PAN bill or VAT bill?

Every business in Nepal needs a PAN. Only businesses registered for VAT charge it. Registration becomes compulsory once annual turnover crosses the threshold set in law, and a business can also register voluntarily. The practical difference on your counter:

• Not VAT-registered: you issue a PAN bill. It shows your PAN and the amount — no VAT line at all. Adding VAT you are not registered for is not allowed.
• VAT-registered: you issue a tax invoice showing the taxable amount, VAT at 13% as a separate line, the total, and your PAN.

The price on your wall vs the bill

Gyms quote prices two ways: "Rs 2,500 a month, all inclusive" or "Rs 2,500 plus VAT". Both are fine to advertise. But the bill must still separate the taxable amount from the VAT. For a VAT-inclusive price, that means working backwards:

• Inclusive price Rs 2,500 ÷ 1.13 = Rs 2,212.39 taxable amount
• VAT = Rs 2,500 − Rs 2,212.39 = Rs 287.61
• Total on the bill = Rs 2,500.00

For a "plus VAT" price, it goes forward instead: Rs 2,500 taxable, Rs 325 VAT, Rs 2,825 total.

Discounts come off before VAT

If you give a member Rs 300 off a Rs 2,500 plan, you only earned Rs 2,200. VAT is charged on that discounted amount — Rs 286, not Rs 325. Calculating VAT on the full price and then subtracting the discount means paying tax on money you never received.

Keep old bills as they were issued

If you register for VAT halfway through the year, the bills you issued before still have no VAT, and they must stay that way. Whatever system you use should record the rate on each bill at the moment it is issued, so changing a setting later does not quietly rewrite your history.

Where software helps

None of this is hard for one bill. It is hard for three hundred members, each with a different plan, discount and payment method. FitYantra's billing treats VAT as a per-gym switch: off, bills are PAN bills; on, every bill shows 13% separately, discounts reduce the taxable amount first, inclusive prices are split automatically, and each bill keeps the rate it was issued with.

Frequently asked questions

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