Understanding Nepal’s Vehicle Import Taxes & Their Impact

What is Vehicle Import Tax?

When someone brings any vehicle such as a  car, bike, or any other vehicle from another country to Nepal, they must pay a special fee to the government which is called an vehicle import tax. This import tax is the reason which, if you have noticed, makes vehicles more expensive than they originally cost in other countries where they were brought from.

For example, if a car costs NPR 20 lakhs in India, it might cost over NPR 40 lakhs in Nepal after paying all the taxes, basically doubling the price. This is because the government adds several types of taxes on top of the original price to collect money for the country which they use for developing the country.

In Nepal, vehicle import tax is one of the main reasons why cars and bikes are so expensive to buy. If you understand how these taxes work, it can help you choose the right vehicle for your needs. 

Types of Vehicle Import Taxes in Nepal

In Nepal, when someone brings a vehicle from another country, they don’t just need to pay one tax when bringing, rather they need to pay many different types of taxes. All of these taxes together make up the full vehicle import tax in Nepal.

Each tax adds more and more cost to the vehicle, and thus making imported cars or bikes become so expensive. These taxes are set by the government and depend on things like engine size, fuel type (petrol, diesel, or electric), and the kind of vehicle (bike, car, bus, etc.).

Here are the main types of vehicle import taxes:

• Custom Duty – This is the first big vehicle import tax imposed by the government. It’s a tax that importers need to pay just for bringing the vehicle into Nepal.
  
  

• Excise Duty – This type of vehicle import  tax depends on the engine size and fuel type. Bigger engines and fuel vehicles usually have higher excise duty than smaller engine ones.
  
  

• VAT (Value Added Tax) – This is a 13% tax added on top of the total value after the other taxes thus making imported vehicles so much more expensive to buy.
  
  

• Road Infrastructure Tax – This type of vehicle import  tax is collected to be used by the government to help build and maintain roads.
  
  

• Registration Tax – After all taxes are paid, the vehicle must still also be registered in Nepal, which yep also costs money.

After adding all these prices you can imagine how much the price the importer will need to buy to import vehicles so it's no wonder that there are vehicles which are double or more priced than the original price from where the vehicle was brought.

How Vehicle Import Taxes Are Calculated

We briefly just discussed the type of vehicle import tax in Nepal now lets see how they are calculated along with some examples too.

Here’s how it works:

Step-by-Step Breakdown:

• Customs Duty (about 40%-80%)
  This is the first and biggest vehicle import  tax. It depends on the size of the engine (CC) and the type of vehicle—petrol, diesel, or electric. For example, petrol cars usually have higher customs duties than ev cars.

• Excise Duty (ranges from 15% to 80%)
  This vehicle import tax is added after customs duty. It also depends on the engine power and fuel type. Vehicles with bigger engines or that use more fuel get taxed more.

• VAT (Value Added Tax – 13%)
  This is the standard tax added to almost everything we buy in Nepal, including vehicles. After calculating other taxes and getting a total price, 13 % VAT is added to the price.

• Road Construction & Infrastructure Tax (Rs. 1 to 4 lakhs)
  A fixed vehicle import tax is also added for supporting road development in Nepal.

• Environment Tax (small amount)
  This vehicle import tax is to help control pollution. EV cars in Nepal are either free or have very low amounts to pay here.

Now let’s take an example to understand this vehicle import tax in Nepal more thoroughly, let’s say you want to import a petrol car.

 Here's how it might look:

• Base Price of the car: NPR 20 lakhs

• Customs Duty (60%): NPR 12 lakhs

• Excise Duty (50% on base + customs): NPR 16 lakhs

• VAT (13%): NPR 6.1 lakhs

• Other fees: NPR 1.5 lakhs

• Total Price in Nepal: NPR 55.6 lakhs
  
  

Impact of Vehicle Import Taxes on Vehicle Prices

The vehicle import tax in Nepal is added when importing vehicles to Nepal and has a huge effect on how much you end up paying as a customer. These extra charges spent on vehicle import tax in Nepal can sometimes double or even triple the original price of a vehicle making it way more expensive to buy. That’s why a car that costs NPR 25 lakhs abroad might end up costing over NPR 50 lakhs here.

For example, one of the reasons people often talk about vehicle import tax in Nepal is because it makes owning a car or bike feel like a luxury, not a need. 

Here’s how import taxes affect vehicle prices:

1. Petrol and Diesel Vehicles Become Expensive

• Vehicles with large engines (like SUVs or pickup trucks) are taxed heavily making them very expensive then the original price in which they were brought on.

• Fuel-based cars are hit with high customs and excise duties also making it very expensive to buy.

• These extra costs make petrol price in Nepal even more painful, especially when added to expensive vehicles.
  
  

2. EVs Are Cheaper in Comparison

• In comparison we have EV cars in Nepal which are getting popular because they have lower import taxes applied, you can learn more in our article Government Incentives that EV Owners in Nepal need to know.

• For example, an EV with a base price of NPR 25 lakhs may only be taxed around 10%-30%.
  
  

3. Limited Choices for Customers

• Because of high taxes, many international car brands avoid bringing budget models into Nepal as only few people will be able to buy such expensive brand cars.

So, when buying a vehicle in Nepal, remember that a big chunk of what you’re paying goes into taxes—not just the vehicle itself. That’s why understanding import taxes is key to making a smart choice.

If you liked this article and want to read more such transportation related articles then you can check out our transportaion related page in our website Atal Auto where we post such transportation related articles frequently.

Government Policies and Changes in Vehicle Import Tax in Nepal

The government of Nepal plays a big role in deciding how much vehicle import tax is added to vehicles that come from other countries. These vehicle import tax in Nepal can change depending on the government’s budget, environment plans, and goals to reduce pollution. So, staying updated on these policy changes is important for anyone looking to buy a car or want to stay updated about car related news.

In recent years, the government has made some changes to help promote EV cars in Nepal. At the same time, taxes on fuel-powered vehicles have mostly stayed high or even increased more than before.

Here are some of the key policies and changes:

1. Electric Vehicles (EVs)

• To support cleaner transportation, the government has reduced the vehicle import tax in Nepal for electric cars and bikes.

• This means that EV cars in Nepal now cost much less than they used to, making buying an EV a worthwhile investment especially considering the long term savings it provides.

• Policies also encourage the building of EV charging stations in Nepal, making it easier to use electric cars every day.
  
  

2. Higher Vehicle Import Tax on Petrol and Diesel Vehicles

• Cars that use petrol or diesel still face heavy vehicle import  taxes and are expensive.

• The goal is to reduce pollution and push more people towards using electric vehicles.

• This also connects to the rising petrol price in Nepal, which makes running these vehicles more expensive.
  
  

3. Special Cases 

• Sometimes, the government provides tax cuts or changes for specific vehicle types like ambulances or public buses.

In short, government policies can make a big difference in what kind of vehicles are affordable in Nepal. Whether you're a buyer or someone in the auto industry, understanding these rules helps you make smarter decisions.

If you have any questions or are confused about anything feel free to contact us we are always here to help you!

Conclusion

Understanding the vehicle import tax in Nepal is super important if you're thinking about buying a vehicle or are working in the vehicle business. These taxes are not small at all, they can make a big difference in the final price of a car or bike. That’s why it's important to learn how they work, what types of taxes there are, and how they are calculated.

If you’re planning to buy a car, especially an imported one, you should check not just the showroom price, but also how much extra you’ll pay due to import duties and taxes. The rules are different depending on whether it’s a petrol car, a diesel SUV, or an EV (electric vehicle).

You can also check out our price list page where we have posted price list of many brands of cars that are for sale and if you are interested in buying a car you can jump straight in our used cars page where we have detailed list of second hand that are ready for sale at an unbelievable low price, ready for you to try your hands on and take home with you.