ICAN STUDY MATERIAL /CAP-Il CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 _ Industrial Enterprises Act, 2076 Date of Authentication & Publication 28" Magh, 2076 ‘Act Number 19 of the Year 2076 (2020) An Act made for the Amendment & Consolidation of Prevailing laws relating to Industrial Enterprises Preamble: Whereas, for the increment in production of industrial goods or service and employment opportunities by making industrial eavironment of the country investment friendly and competitive, it is expedient to amend and consolidate the prevailing laws relating to industrial enterprise for constructing dynamic and strong economy by emphasizing import substitution & export promotion respectively through the optimum mobilization of resources available in the country, and executing convenient, predictable and effective management of industrial sector; Now, therefore, be this Act enacted by the federal parliament, Chapter 1 Preliminary, 1. Short title and commencement: (1) This Act may be called “Industrial Enterprises Act, 2076.” (2) This Act shall come into force immediately Unless the subject or context otherwise requires, in this Act: (a) “Industry” means the industry as referred to in section 17. (b) “Industry Registration Body” means the Department and this term also refers to the department or office of the Provincial Government looking after the industry administration. (c)“One Stop Service Centre” means the One Stop Service Centre as referred to in section 37. (d)“Transactions” means the production and distribution activities of goods ot services carried out by industries in accordance with their objective and this term also includes other transactions related to such production and distribution. (c) “Fund” means the fund as refe:red to in section 51 Resource Person: CA. Pramod Lingden, MBS, LLB Page 1 of 50ICAN STUDY MATERIAL /CAP- (P-ll & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT (f) “Cottage Industry” means the industry as referred to in clause (b) of sub-section (1) of section 17. (2) “Large Industry” means the industry as referred to in clause (e) of sub-section (1) of section 17. (h) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act (i) “Export Oriented Industry” means the industry, except energy based industries, exporting more than at least 40% of its production (j) “Board” means the Industrial and Investment Promotion Board constituted under section 20. (k)“Intellectual Property” means the intellectual property including patent, design, trademark, service mark, geographical indication sign, trade secret and the term also includes the matters defined as copyright under the prevailing law. (I) “Medium Industry” means the industry as referred to in clause (d) of sub-section (1) of section 17, (mm) “Ministry” means the Ministry of the Government of Nepal looking after the matters related to industry (n) “National Priority Industry” means the industry as referred to in section 19. (o)“Micro Enterprise” means the industry as referred to in clause (a) of sub-section (1) of section 17. (p) “Department” means the Department of Industry. (q) “Small Industry” means the industry as referred to in clause (c) of sub-section (1) of section 17. (r) “Fixed Capital” means the assets as referred to in section 18. Resource Person: CA. Pramod Lingden, MBS, LLB Page 2 of 50ICAN STUDY MATERIAL /CAP-Il, CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 Chapter - 2 Provision relating to Registration and Regulation of Industry 3. Industry to be Registered: (1) No one shall establish or operate, or cause to establish or operate industry without registration of industry under this Act. (2)Notwithstanding anything contained in sub-section (1), industry which is in operation at the time of commencement of this Act after being registered under industrial enterprise relevant prevailing laws shall not be required to re-register under this Act (3) Industry established as a branch industry prior to commencement of this Act shall, by completing the process prescribed under this Act, be registered as a separate industry within 1 year from the date of commencement of this Act. (4) May be established and operated as a unit industry, in case: + Any industry desires for producing its production or any part of it at different | place than the previously si:uated place of the industry, or “Industry not desirous to register a separate industry within the time limit pursuant to sub-section (3), such branch industry (5) While establishing a unit pursuant to sub-section (4), process equivalent to a new industry establishment other than registration shall be fulfilled. (6) Records of production and transactions from the unit pursuant to sub-section (4) shall be prepared and retained by the concerned unit, and such records shall also be sent to the head office of the industry. 4. Provision related to the Registration of Industry: (1)A person, firm or company desirous to establish following industries under this Act shall submit particulars and documents as prescribed along with the application in the prescribed format to the Department: (a) Industries requiring permission as specified in schedule-1, (b) Industries to be established at foreign investment, (c) Industries related to matters as specified in schedule-S of the constitution of Nepal (d) Industries with working area of two or more provinces (e) Industries related to educational consultancy services regarding diplomatic affairs (2) Activities related to industry administration including the registration, renewal and regulation of other industries except the industries under sub-section (1) shall be done from the concerned provincial government. Provided that, permission shall be obtained with respect to industries requiring permission. Resource Person: CA, Pramod Lingden, MBS, LLB Page 3 of 50ICAN STUDY MATERIAL /CAP-II, CAP-1I1 6 MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 (3) Notwithstanding anything contained in sub-section (2), in relation to industries which are to be registered, renewed and regulated from the provincial government, the Federation shall perform activities Telated to the industry administration including the registration, renewal and regulation of such industries until the concerned provincial government does not manage laws (4) Notwithstanding anything contained in sub-section (1) and (2), | ¢ Industries manufacturing atomic energy, radioactive materials, ] | # Industries related to atomic energy and uranium based energy ~ shall be established and operated from the Government of Nepal only. (5)Particulars or documents to be submitted under sub-section (1) along with application may be submitted through electronic medium (online) and documents related to it may be authenticated by digital signature. (6) Industry Registration Body shall, upon the inquiry on the application received under sub-section (1) if deems the necessary particulars and document to be inadequate, inform the applicant immediately for submitting the inadequate particulars or documents by prescribing period of maximum ninety days. (7)industry Registration Body may refuse registration application disclosing the reason: If the applicant does not submit particulars or documents demanded under sub- | section (6), or r If the process pursuant to this Act or rules framed under this Act is not ca tobe completed. Tn case decision has been done for such refusal, its written information shall be given to the concerned applicant disclosing reason within 5 days of decision made. (8) A person, firm or company desirous to establish other industries except specified ‘under sub-section (1) shall submit an application for industry registration to the Industry Registration Body of concemed province along with particulars and documents provided in the provincial law 5, Industry Registration Certificate to be Provided: (1) While carrying out an inquiry upon the application submitted pursuant to Section 4, if necessary documents and details are found to have been fulfilled, the Industry Registration Body shall issue industry registration certificate at prescribed format by registering the industry as demanded by the applicant within five days of receiving such particulars or documents. (2) While issuing industry registration certificate pursuant to sub-section (1), the industry registration certificate shall disclose, inter alia, the following particulars: (a) Date of certificate issued, (b) Period for commencing commercial production or transaction, (c) Tef'ms and conditions to be abided by the industry, Resource Person: CA. Pramod Lingden, MBS, LLB Page 4 of 50ICAN STUDY MATERIAL /CAP-HI, CAP~Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 Se (a) Other terms and conditions decided by the Industry Registration Body as per nature. (3) Notwithstanding anything contained in sub-section (1), with respect to micro enterprise, an application may be filed to Industry Registration Body for the registration of the industry within | year from the date of operation of such industry. 6. May file complain: (i)In case the Industry Registration Body refuses to register the industry, any party not satisfied with it may complain within 30 days: _ ( To the Ministry with respect to the decision made by the Department, and | & Torthe concerned provincial ministry looking after the industry with | respect to the decision made by the Industry Registration Body of the province (2)The complaint hearing body shall conduct necessary inquiry upon the complaint received under sub-section (1) and make necessary decision relating to it within 30 days of the complaint received. (3) Other provision related to the complaint shall be as prescribed. 7. To mitigate adverse environmental effects: (If Industry registered under section 5 requires for conducting environmental impact assessment (EIA) or initial environmental examination (IEE) under prevailing law, the establishment, commencement of commercial production and transaction of such industry shall be done only after the approval of report related to it (2) Notwithstanding anything contained in sub-section (1), while making increase in capital, increase in capacity, addition in objective, change in objective, change of place or transfer of industry, if it requires for conducting environmental impact assessment (EIA) or initial environmental examination (IEE) under prevailing law, the same shall also be done. (3) While operating an industry, it shall be the duty of the concerned industry for mitigating the adverse environmental effect that incurred or may incur on the environment (4) The Industry Registration Body may monitor as necessary in relation to whether mitigation of environmental effect done or not and may provide direction, punishment or send recommendation to the concern authority for punishment (5) While submitting an application for industry registration by the industry not requiring environmental impact assessment (EIA) or initial environmental examination (IEE), it shall self-declare that: [Basis and reason for not requiring environmental impact assessment (EIA) or initial environmental examination (IEE), and “Necessary measures shall be adopted for mitigating adverse effect that _may incur while establishing and operating its industry. | Resource Person: CA. Pramod Lingden, MBS, LLB Page 5 of 50ICAN STUDY MATERIAL /CAP-HI, CA) Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 8. Permission to be obtained: (1) Notwithstanding anything contained in this chapter, permission shall be obtained from the Board prior to the registration of industry specified in schedule 1 Provided that, permission from Government of Nepal, the Council of Ministers shall be obtained before registering the industry specified at serial number | of the same schedule. (2)Any person desirous to register an industry requiring permission pursuant to sub-section (1) shall apply to the Board through the Industry Registration Body in the prescribed format along with prescribed particulars. (3)The Industry Registration Body, if finds the necessary particulars or documents included upon the examination of application and documents related to it, shall submit it to the Board for decision along with its opinion within 7 days. (4)The Board shall, in relation to the application received under sub-section (2), make decision at matter whether the permission to be granted or not within 30 days. (5)While making decision to grant the permission pursuant to sub-section (4), the Board may specify necessary additional terms & conditions and standards. (6)The Department shall, in case the decision to grant permission has been made from the Board, make available the permission at prescribed format along with the information of decision to the concerned applicant within five days from such decision cate. (7)The person receiving the permission under sub-section (6) shall apply to the Industry Registration Body for the registration of industry within the time period specified in the permission letter. In case application is not submitted in this way within the stipulated time period, such permission letter shall be ipso facto void. (8)in case decision for not to grant permission has been made from the Board, the Department shall provide its information to the applicant within five days from the decision date (9) Applicant receiving permission under sub-section (6) is restricted to transfer right, sell or change ownership by any way prior to the operation of industry, commencement of its commercial production or transaction. Provided that, in case any applicant dies prior to the operation of industry or commencement of its commercial production or transaction, his or her heir under prevailing law shall not be hindered for conducting the remaining activities at status of the appiicant. 9, Information of industry operation, commencement of commercial roduction or transaction to be given: (i) The industry registered under this Act shall operate industry, commence its ‘commereial production or transaction within the period stipulated in the industry registration certificate and give its information to the Industry Registration Body within 30 days Resource Person: CA. Pramod Lingden, MBS, LLB Page 6 of SOICAN STUDY MATERIAL [CA CAP-Ili & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 (2)In case any industry fails to operate industry or commence its commercial production or transaction pursuant to sub-section (1), it may file an application to the Industry Registration Body as prescribed disclosing its reason for the extension of such time at least 30 days prior to the expiry of period specified in the industry registration certificate, (3) If fails to apply within the period pursuant to sub-section (2), an application may be filed to the Industry Registration Body for the extension of such time paying delay fee 1s prescribed disclosing its basis and reason (within following time): & Within the period stipulated in the industry registration certificate, or & Within 6 months after the expiry of that period (i.e. the period stipulated in the industry registration certificate) (4) The Industry Registration Body may extend period as prescribed for the operation or commencement of commercial production or transaction of such industry 4 fit deems reasonable upon an inquiry carried out on the application received under sub-section (2) or (3), and + Taking into consideration the progress of work and nature of industry including __ construction activities for the industry establishment. Provided that, if the period for operation of industry, commencement of commercial production or transaction needs to be extended for more than 3 times, the Department shall present it to the Board along with its opinion for approval. (5)In casé the period has been extended pursuant to sub-section (4), the concerned industry shall conduct operation of industry, commencement of its commercial production or transaction within such period (6) In case the period for the operation or commencement of commercial production or transaction of any industry pursuant to sub-section (4) cannot be extended, its written information shall be provided to the concerned applicant within 7 working days of the decision made, (7) in case the period for the operation or commencement of commercial production or transaction of any industry pursuant to sub-section (4) cannot be extended, the registration permission given to such industry shall be deemed to have been ipso facto void. 10.To conduct monitoring and inspection: (1) The Ministry or the Industry Registration Body may, in relation to whether this ‘Act and rules framed under this Act and terms & conditions specified in the industry registration certificate have been complied or not, conduct monitoring and inspection of industries from time to time Resource Person: CA. Pramod Lingden, MBS, LLB Page 7 of 50ICAN STUDY MATERIAL /CAP-I, CAP-Ih & MEMBERSHIP/INDUSTRIAL ENTERPRISES AC} 2) While carrying out monitoring and inspection, employees or officials deputed for the inspection and monitoring of industries pursuant to sub-section (1) may ~ Enter into the premise of the concerned industry, | 4 Collect audio visual and other information and data as per necessity, | + Examine necessary documents, and | 4 Demand any other information or particulars, | Provided that, in the condition of maintaining confidentiality at the matter attracting conservation of intellectual property under prevailing law, it shall be as per the prevaifing Nepal law relating to intellectual property. (3) It shall be the duty of the concerned industry for making available such information or particulars as demanded uncer sub-section (2). (4)The Industry Registration Body may, if finds any type of problem from the information or particulars received under sub-section (3) for operating such industry, provide necessary facilitation at consultation with the concerned industry. 11. Approval to be obtained for transfer of industry: (1) If any industry registered for operating in one place needs to be transferred to any other place due to any reason, an application at prescribed format shall be submitted to the Industry Registration Body disclosing its reason, Provided that, approval of Department is required in case of transfer from one province fo another province (2)In casg the application has been received under sub-section (1), the Industry Registration Body may, at the recommendation of the concerned Local Level where the industry is to be transferred, grant approval for transfer of industry. Information related to approval granted for the transfer of industry in such a way shall be provided to the concerned Province Ministry looking after industry and the Local Level as well. (3) Other provision related to the transfer of industry shall be as prescribed. 12. Approval to be obtained while increasing capital, increasing capacity and adding or changing objective of industry: (i Ifany industry desires to increase its existing capital or increase capacity or add or change or alter objective, an application at prescribed format shall be filed to the Industry Registration Body for its approval (2) The Industry Registration Body shall, if deems appropriate upon enquiry on the application received under sub-section (1), shall grant permission for increasing the capital, increasing the capacity, adding, changing or altering the objective of such industry after completing the procedure as prescribed. If changes incur at the classification of industry due to increase in capital or increase in capacity or addition or change or alteration of objective in such a way, the concerned industry shall cause to update its records and fo mention the same at industry registration certificate. Resource Person: CA. Pramod Lingden, MBS, LLB Page 8 of 50ICAN STUDY MATERIAL /CAP-II, CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076, ee OR SSS (3) Notwithstanding anything contained in sub-section (1) and (2), approval of Industry Registration Body shall not be required to obtain while increasing capital or increasing capacity by: % Micro enterprise or * Cottage and Small industry with fixed capital up to Rs 1 crore which does not requiring permission (i.e. not required permission ws 8) Provided that, % For increasing such capital or increasing capacity, or ] {From the addition or change or alteration of objective, 7 | if requires to conduct the environmental impact assessment (EIA) or initial environmental examination (IEE), its report needs to be approved in accordance with prevailing law. (4)In case any industry produces more than projected production by merely enhancing the managerial competency without altering the installed machinery, equipment, the capacity shall not be considered to have been increased. 13.Particulars to be made available: (1) Every industry shall, after commencing the commercial production or transaction, submit particulars as prescribed to the Industry Registration Body within 6 months after the expiry of each fiscal year. (2) Particulars to be submitted under sub-section (1) may also be submitted through electronic medium as prescribed. (3) Notwithstanding anything contained in sub-section (1), zero return shall be submitted of such period, even if: [& Any industry remains closed for more than one year or 4 No production or transaction incurs due to any reason. _| Provided that, if such industry informs to the Industry Registration Body that the industry has been closed and the same has been stated in the record, returns of the closed period need not be submitted. 14. Information of industry closure to be provided: In case the concerned industrialist closes down the industry registered under this Act due to any reason or suspends the commercial production or transaction, its information shall be given to the Industry Registration Body as prescribed within 30 days of that closed down or suspension date. 15.Applicatibn may be filed for the registration cancellation of industry: (1)In case the industry cannot be operated due to any reason, an application may filed to the Industry Registration Body at prescribed format for the registration cancellation of such industry élong with particulars or documents as prescribed. Provided that, in case of occurring insolvency under prevailing law, it shall be dealt in accordance with the same law (i.e. insolvency relevant prevailing law), Resource Person: CA. Pramod Lingden, MBS, LLB Page 9 of 50ICAN STUDY MATERIAL /CAP-H, CAP-III & MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 (2) The Industry Registration Body after receiving the application under sub-section (i) shall, if deems that the concemed industry has resolved government dues including tax and other liabilities to be paid by it, cancel the industry registration by completing the procedure as prescribed. Information of registration cancellation done in such a way shall be given to the concemed applicant and entire concern government entities (3) Notwithstanding anything contained in sub-section (1) or (2), with respect to industries under companies (i.e. companies registered as industries) which are proceeding insolvency procedure under the prevailing law, it shall be in accordance with the same (i.e. insolvency law) and the liquidator shall make its information available vo the concerned Industry Registration Body in case of liquidation of the industry in such a way. 16.Records to be managed: (I It shall be the duty of the concerned Industry Registration Body for retaining safely the records related to the industry administration including the industry registration, renewal, ownership transfer, name alteration, place relocation, capacity increment, capital increment, addition or alteration of objective or industry liquidation (2) Any industry or person having ownership at such industry may, in case requires documents of records under sub-section (1) of the concerned industry, apply to the Industry Registration Body at prescribed format. (3) In case the application has been received pursuant to sub-section (2), the Industry Registration Body shall certify and make available the documents or records retained a: the Department by collecting the prescribed fee. (4) In case the records retained at the Industry Registration Body has been destroyed or not available due to any reason, the Industry Registration Body may make available the photocopy pursuant to sub-section (3) by maintaining its records, on the basis of documents or records retained at other concerned government entities and other documents submitted by the concerned industry. (5) After issuing the photocopy by the Industry Registration Body under sub-section (4), the Industry Registration Body may decide and cancel such photocopy, if later on the particulars related to the records of such industry otherwise proved. (6)Documents or records related to any industry and retained at the Industry Registration Body shall not be provided to any other except to the concerned industry or person having ownership at such industry. Provided that, in case any court, government office or entity demands at investigation or government acts and actions, it shall not be hindered for making available the records to such court, government office or entity. (7) The lidustry Registration Body shall safely store the industry related records, documents or any other particulars retained with it in electronic form as well. Such electronic records may be shared with other government entities via electronic media by making procedure. Resource Person: CA, Pramod Lingden, MBS, LLB Page 10 of 50ICAN STUDY MATERIAL /CAP-II, CAP-1I1 & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 Chapter -3 Classification and Fixed Capital of Industries 17. Classification of Industries: (1) For the purpose of this Act, industries have been classified as follows: ‘Typeofjindutrien| Particulars (a) Micro Enterp-ise Industries, other than requiring permission under section 8, ‘ satisfying following conditions shall be deemed as micro enterprise (1) Fixed assets, except land & building, worth not more than Rs.20 lakh, s (2) Entrepreneur himself or herself involved in operation and ‘management of industry, (3) Workforce of up to 9 individuals including the entrepreneur, | (4) Annual turnover less than Rs.1 Crore; and | (5) If such industry has used engines, equipment or machines then | energy consumed by such engines, equipment or machines in the form of electrical energy or fuel or other oils is upto 20 ies satisfying following conditions shall be deemed as small industries: s (1) Based on traditional skills and technology (2) Labor intensive & based on specific skill or local raw materials | & local technology, art & culture (3) If engines, equipment or machines are used, then power usage is upto 50 Kilo watt capacity. (4) Industries as stated in Schedule-2 (c) Small Industries Industries with fixed capital upto Rs.15 Crores except Micro and Cottage industries (d) Medium Industries with fixed capital Industries more than Rs.15 Crores up to Rs.50 Crores._ (c) Large Industries Industries with fixed capital more than Rs.50 Crore (b) Cottage Industry ‘ Resource Person: CA. Pramod Lingden, MBS, LLB Page 11 of 50ICAN STUDY MATERIAL /CAP-HI, CAP-IIl & MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 ee eee ee ee eee ee (2)Industries mentioned under sub-section (1) shall be classified as follows on the basis of nature of goods or service produced from such industries: Type of Industries oa Particulars (a) Energy based Industries Industries involved in business of generating energy as mentioned in Schedule 3 a (b) Manufacturing Industries | Industries which produce goods by utilizing or processing: “ Raw materials, & Auxiliary raw materials, or : 4 Semi processed raw materials _ | (© Agro and Forest product | Industries producing any goods from raw materials based | based Industries on agriculture or forest product, or industries related to ‘ _ agriculture and forests product as referred in Schedule 4. (d) Mineral Industries Industries producing metallic or non-metallic mineral | - materials by excavating or processing minerals _ (@) Infrastructure Industries Industries that construct and operate _ physical infrastructure as mentioned in Schedule 5. () Tourism Industries Industries related to tourism services as mentioned in Schedule 6. : _— | (g) Industry based on Industries providing service of _ information, Information technology, communication or information dissemination technology Communication having used technology for information collection, ‘Technology and processing and transmission as referred to in Schedule 7. | Information Dissemination (hy Service based Industries Industries producing or providing services as mentioned ‘ in Schedule 8. = | (3) If the increase in capital, incrzase in capacity, addition, alteration or change in objective of any industry under section 12 incurs, such industry shall be, ipso facto, classified at the said class under sub-section (1) in which class it lies. (4) Notwithstanding anything contained in this section, the Government of Nepal may at the recommendation of the Board by notification in the Nepal Gazette provide for ‘ Including any (i.e. new) industry in the class of industry, or ] Include industry included in one class to another appropriate class (i.e. _ transfer only from one class to another class). (5) Cooperative society as prescribed registered under prevailing law may, if desires to register an industry retaining ownership under the same society, register industry under this Act. Resource Person: CA, Pramod Lingden, MBS, LLB Page 12 of 50CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES A\ __ICAN STUDY MATERIAL /CA ‘ (6) Industries registered prior to commencement of this Act, if desire to be classified as per this Act, Industry Registration Body may update the classification after completing the process as prescribed. (7)Government of Nepal may, by notification in the Nepal Gazette, make necessary alteration in the classification pursuant to sub-section (1) or (2). 18. Fixed Capital of Industry: (1)For the purpose of this Act, while executing valuation of fixed capital of an industry, following assets shall be taken into consideration for the valuation:~ (a) Physical infrastructure constructed on land and underground, in space, water or under water, (b) Physical infrastructures constructed above land (such as: sewerage, internal road, drinking water structure, water supply system), (c) Office, factory, building or warehouse of industry, (d) Residential buildings constructed for employees or workers, (e) Electricity distribution and equipment & system related to it, (0) Machinery, equipment, tools and their reserved fittings, (g) Means of transportation, (h) Office material and equipment of capital nature, (i) Furniture and fixture, () Communication system and equipment & system related to it. (2)In addition to the assets referred in sub-section (1), following pre-operative expenses and expenses incurred during different stages of construction shall also be capitalized as fixed capital (a) Technical and supervision expenses to be capitalized; (b) Pre-investment and pre-operation expenses; (c) Interest expense to be capitalized; (d) Enfvironmental study and research expenses incurred prior to operation of industry 19, National Priority Industry: Industries mentioned in schedule-9 shall be considered as National Priority Industries. Resource Person: CA. Pramod Lingden, MBS, LLB Page 13 of 50ICAN STUDY MATERIAL /CAP-II. CA) Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES A\ Chapter 4 Provision related to Industrial and Investment Promotion Board 20. Constitution of Board: (1) An Industrial and Investment Promotion Board has been constituted as follows: (a) Minister or State Minister for Ministry of Industries, Commerce and Supply -Chairperson (b) Member (looking after industry sector), National Planning Commission -Member (c) Governor, Nepal Rastra Bank -Member (d) Secretary, Ministry (looking after matters related to Industry) -Member (e) Secretary, Ministry of Finance -Member (f) Secretary, Ministry of Labour, Employment and Social Security -Member (g) Secretary, Ministry of Land Management, Co-operatives & Poverty Alleviation -Member (h) Secretary, Ministry of Forests and Environment -Member (i) Chief Executive Officer, Invesrment Board Nepal -Member (j) Joint Secretary, Industrial & Investment Promotion Division, Ministry -Member (k) President, Federation of Nepal Chamber of Commerce and Industry -Member (1) President, Confederation of Nepalese Industries -Member (mm) President, Federation of Nepal Cottage & Small Industries -Member (n) President, Federation of Women Entrepreneurs -Member (0) Two persons including at least one woman entrepreneur nominated by Ministry from among experts in industrial sector -Member (p) Director General, Department of Industry -Member Secretary (2) Notwithstanding anything contained in clause (a) of sub-section (1), where both minister aad state minister have been appointed in the ministry, state minister shall be the member of the board. (3) The Board may, if it deems necessary, invite any expert of related subject, official or officer employee of Government of Nepal or Provincial Government at meeting of the Board. (4) Board meeting shall be held at least once in two month and can be held anytime on requirement basis. (5) Matters to be discussed in the board meeting shall be determined by the member secretary of the board in consultation with the chairperson of the Board and its notice shall be provided to all members at least twenty four hours before holding the meeting (6) Any member having personal interest in the matters to be discussed in the board meeting shall not be allowed to take part at decision making process of such matter, (7)If it seems that the decision has been made against sub-section (6), such decision shall be, ipso facto, void. Resource Person: CA. Pramod Lingden, MBS, LLB Page 14 of 50ICAN STUDY MATERIAL /CAP- 1P-ilf & MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 (8) Decision of the board shall be authenticated and retained by the member secretary. (0) The office of the Board shall be located at Department. (10)Other procedure related to the meeting of Board shall be as prescribed by the Board itself. 21. Function, duties and powers of the Board: (yin addition to function, duties and powers mentioned elsewhere in this Act, the functions, duties and powers of the Board shall be as follows: (a) To make recommendation to Government of Nepal to frame policy and take policy wise decision relating to industrial promotion, investment security, enhancement and industrialization; (b) To make recommendation to Government of Nepal uponr reviewing policies, legal, institutional & procedural structure and working system related to overall indus'rialization of the country regularly for necessary improvement on it, (c) Tq make recommendation to Government of Nepal to frame necessary policy whe decision in relation to foreign investment and technology transfer subject to prevailing laws, (a) To make recommendation to Government of Nepal to frame policy and make policy wise decision for controlling the industrial pollution, (e)To offer suggestion and recommendation to Govemment of Nepal to take requited action after carrying out overall evaluation and review of industrial development status of the country; (f) To solve of cause to solve the problem after hearing the complaint of industrialists and issue guidance to the concerned body, (g) To make recommendation to Government of Nepal for any change or alteration in level & classification and nature of industri (h) To carry out or cause to carry out study, research and survey as Per necessity regarding the increment of native and foreign investment in industrial sector, () Ta carry out or cause to carry out necessary activities for constructing competitive industrial environment at effective, coordinative and harmonious cooperation of public, private and cooperative sectors, {j) To issue policy wise guidaace at subjects of establishing coordination between Iocal and provincial level for industrial business development and expansion, and make necessary provision of coordination, (k) To facilitate for solving problems in implementation if difficulties or doubt in the prevailing law relating to industries arise; (l) ‘To coordinate or facilitate in relation to operation of One Stop Service Center, (im) To carry out or cause to carry out other functions as prescribed. (2) Board may, out of its functions, duties and power, delegate any power to any entity or officer of Government of Nepal. (3) The Boare' shall submit annual report to the Ministry regarding the work performed by it, Ministry shall publish such report in its website Resource Person: CA. Pramod Lingden, MBS, (LB Page 15 of SOICAN STUDY MATERIAL /CAP-Il, CAP-II1& MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT. 2076 22.Confidentiality to be maintained: (1) Any notice that came into his or her information while exercising work of the Board shall not: ‘& Make available to any other person in an unauthorized way, or ] | 4 Use or cause to use for gain, welfare or benefit of anyone. (2) in case the chairperson, member, member secretary, invitee person at meeting or employee of the Board does any act against sub-section (1), he or she shall be ‘deemed to have not complied with official conduct and the record of such member shall be maintained. 23, Provision related to the Provincial Industrial and Investment Promotion Board: (1) One Provincial Industrial and Investment Board may be constituted as per province Jaw for promoting investment in industries registered and operated at province. (2) The functions, duties and power of the Provincial Industrial and Investment Board established under sub-section (1) shall be as follows (a) To make recommendation to the provincial government after conducting regular review on overall industrial promotion of the province for making necessary improvement in it, (b) To carryout necessary activities for implementing the policy related to industrial pollution control, (c) To offer suggestions and recommendations to the provincial government for taking necessary steps after carrying out the overall evaluation and review of industrial development status of the province, (a) To solve or cause to solve problems after hearing complain of industry business person registered in the province and issue guidance to the concemed entity, (c) To do or cause to do study, research and survey as per necessity with regard to increasing native investment in the industrial sector within the province, () To cary out or cause to cary out necessary activities for constructing competitive industrial environment on effective, coordinative and harmonious cooperation of public, private and cooperative sector within the province, (g) To issve necessary guidance and manage necessary provision of coordination at subject requiring coordination between Provinces and Local Levels for industrial enterprise development and expansion, (h) To issue direction to the concerned Province Ministry for sending in writing to the Ministry for solution, if any dilemma arises while implementing the industry relevant any federal law, (i) To coordinate with Board through Ministry in relation to service and facility to be received from One Stop Service Center, (j) To do or cause to do other necessary activities in relation to promotion of industries registered in the provinee (3)Provincial Industrial and Investment Promotion Board may make suggestion and recommendation to the Ministry through the concerned Province Ministry at matters deemed necessary for the industrial and investment promotion of the province. Resource Persbn: CA. Pramod Lingden, MBS, LLB Page 16 of 50__ICAN STUDY MATERIAL /CAP- CaP. Provision related to Incentive, Exemption, Fac “ I & MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 Chapter -5 ies or Concession to be provided to Industries 24. Exemption, facilities or concessions related to income tax: (1) Industries registered under this Act shall be availed with exemptions, facilities or concessions as per prevailing laws relating to tax. 2) Without making adverse effect upon the universality of sub-section (1), following income tax exemptior ‘Type of Industry a) Manufacturing Industries b) Infrastructure Industri¢ Invested at infrastructure industries like construction of roads, bridge, tunnel, ropeway, railway, tram, _ trolleybus, airport, industrial structure and infrastructural complex and operating them Manufacturing industries based on fruits, except those producing cider, brandy and wine, established in remote, undevelopeé and under developed area as specified in Schedule 10 Manufacturing industries producing fruit based cider, brandy and wine established in remote and undeveloped area Industries: Producing and processing native tea products, °) 4) Resource Person: “A. Pramod Lingden, MBS, LLB ‘ facilities or concessions shall be provided to industries: __ Exemption, Facility or Concession (0% exemption at the tax rate imposed on income earned from such industries; and + Additional 5% exemption is provided at the tax | rate imposed on the income eamed from _exporting its product. 40% exemption at the tax rate imposed on the | income earned from operation of such industry. 90%, 80% and 70% exemption respectively at the income tax rate under prevailing law for up to 10 years from the date of commencement of commercial production or transaction 40% and 25% exemption respectively on the | income tax for up to 10 years from the date of commencement of business 50% exemption at the income tax rate levied on the income earned from the sale of such products Page 17 of 50ICAN STUDY MATERIAL (CA) CaP. Dairy industries carrying out transactions of dairy products, and % Clothes industries f) All industries producing g) All industries h) Manufacturing, or Service based industries: + set up with the investment of more than 1 billion rupees and 4 providing direct employment to more than 500 individuals throughout the year ‘ i) Person of entities obtaining approval to commercially generate, transmit or distribute hydroelectricity by Chaitra 2080 B.S. or generation of electricity from solar, wind and bio mass energy as well Person conducting research and excavation of minerals (other than limestone), petroleuth matters, natural gas and fuel if commence the commercial transaction by Chaitra 2080 B.S. k) Tourism Industries established with the investment of more than 2 billion rupees dD Resource Person: CA. Pramod Lingden, MBS, LLB UI1& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 25% exemption at the income tax rate on royalty | income earned from export of intellectual property. 50% exemption at the income tax rate on income carned by sale through the transfer of intellectual property — + 100% income tax exemption for first five years from the date of commencement of business, and | 450% income tax exemption for next 3 years. Provided that, industries which are currently in | operation are entitled to 100% income tax exemption for first 5 years and 50% income tax exemption for next 3 years at income earned from such capacity increment, in case: + Such industries enhance their installed capacity by at least 25%, | “Increase the capital to 2 billion rupees, and “Provide direct employment to more than 300 individuals throughout the year % 100% income tax exemption for first 10 years + 50% income tax exemption for next 5 years. Provided that, in case of industries that have | already begun commercial production at the time of commencement of this Act, the provision (i. exemptions) applicable at time of receiving approval shall be applicable. “100% income tax exemption for first 7 years from | the date of commencement of transaction; 50% exemption on the income tax for next + 100% Income tax exemption for the first 5 years from the date of commencement of commercial | transaction 50% exemption on income tax rate for next 3 years Page 18 of 50ICAN STUDY MATERIAL /CAP-HI, CAP-II 1) Industries related to Operation of zoological, geological, bio-tech park; and “Software development, data processing, cyber café, digital mapping established inside the technology park and information technology park ‘As specified by Government of Nepal by notification in the Nepal Gazette m) Manufacturing and information technology based industries on the basis of employment generation ‘n) All industries 0) Manufacturing industries having interns at least 10% of the total human resource p) All industries Resource Person: CA, Pramod Lingden, MBS, LLB 50% exemption on tax imposed on income of concerned industries (1) 15% exemption on income tax rate at income of | such year for providing direct employment to 300 or more Nepali citizens throughout the year; | (2)25% exemption on income tax rate at income of such year for providing direct employment to | 1200 or more Nepali citizens throughout the | year; (3) Additional 15% exemption on income tax of that year in case the industry has at least 50% of its employees from among Women, Dalit or Disabled person, oe For purpose of income tax, expenses made by industries for long term benefit or welfare of employees or workers such as: life insurance, health facility, contribution based social _ welfare, education and training, child care center, sports ete. canbe deducted. i | For the purpose of income tax, manufacturing industries having interns at least 10% of total human resource are entitled to deduct any such cost | incurred in providing subsistence expenses, internship expenses and expenses incurred in | enhaneing the production capacity of such human | resource working in the industry. Expenses made for equipment & technology used to reduce or control the pollution or re-processing or | reuse of wastages can be deducted up to 50% of the adjusted taxable income of the industrial enterprise of the same fiscal year and where the expenses cannot be deducted in full, the remaining amount may be allowed to capitalize and charge | depreciation in the subsequent fiscal years. Page 19 of 50ICAN STUDY MATERIAL /CAP-Hl, CAP-I & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 4g) All industries 1) All industries s) All industries t) All industries u) All industries y) All industries w) Alll industries x) All industries For the purpose income tax, entire expenses incurred for the machine or equipment used for | reducing power consumption by increasing energy | capacity can be deducted fully, Expenses incurred for increasing entrepreneurship, research and development and creation of new | technology for enhancing the productivity of the industry can be deducted while calculating adjusted | taxable income for an income year from business | provided that such deduction does not exceed 50% of the adjusted taxable income from all business | operated by the person and where the expenses cannot be deducted in full, the remaining amount is | allowed to capitalize for charging the depreciation | inthe subsequent fiscal year, For the purpose of income tax, expenses incurred in | market promotion, survey and advertisement | relating to the business can be deducted up to prescribed limit, ee For the purpose of income tax, expenses incurred for the security of physical assets of industry as | prescribed and net premium paid for its insurance | can be deducted ee For the purpose of income tax, expenses incurred by industry for the protection of industrial properties under the intellectual property registered in Nepal can be deducted. a | For the purpose of income tax, fee paid by industry | to register its intellectual property in foreign country for its protection can be deducted as expense = _ For the purpose of income tax, donations or gifts given by industries to tax exempted organization | can be deducted up to lower of Rs. 100,000 or 5% of | adjusted taxable income of such industry of that | fiscal year, _ a) Government of Nepal may, at special circumstance for the purpose of income tax assessment by notification in the Nepal Gazette, prescribe full or partial exemptions on expenses or donation made by any industry for prescribed works. | Resource Person: CA. Pramod Lingden, MBS, LLB Page 20 of 50__ICAN STUDY MATERIAL /CAP-I, CAP-Il!& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 25. a) b) (3) Notwithstanding anything contained in sub-section (2), except the industries mentioned under clause (d) of same sub-section, industries based on tobacco and liquor are not entitled to any of the exemptions or facilities listed above Provided that, such industries may deduct actual expenses incurred in business promotion activities including long-term benefit or welfare activities of workers and employees as per prevailing laws, in reducing and controlling pollution, re- processing of waste materials, expense incurred for investment in technologies and devices that cause minimum effect at environment, expense for investment in machine or equipment used for reducing power consumption by adding value at energy’ capacity, expense incurred for research and development. (4) In case any industry qualifies for more than one exemption pursuant to this section in respect to same income, the industry shall be entitled to only one exemption selected by it (5) Industries, other than tobacco, liquor and casinos, if utilize their reserve and surplus tocapitalize: é For expansion of the capacity of the same industry or “ At shares of other manufacturing or energy based or agro & forest product based industries “there shall 100% exemption on dividend tax levied as a dividend distribution on such capitalization. (6)50% exeraption on the applicable income tax rate shall be availed to cottage industries and small industries with fixed capital up to_Rs 1 Crore a @ which are already registered and are in operation at the time of commencement | of this Act (OLD] and | 4 which shall come into registration and operation under this Act /NEW] Custom Duty Exemption: Industries registered under this Act shall be availed with following custom duty exemptions: ee i Type of Industry - ‘Exemption, Facility or Concession Industries not entertaining | Ministry of Finance shall determine the rate of Duty Bonded Warehouse or Cash | Draw Back in export of goods by such industries and Deposit(Passbook) facility notify at Nepal Gazette. ‘Then, Ministry shall refund | the amount of Duty Draw Back as per such determined | rate through the One Stop Service Centre, Industries not entertaining Raw materials or auxiliary raw materials including Bonded Warehouse | packaging materials that are not produced in Nepal can approval exporting their be imported by furnishing the required guarantees products through Letter of subject to prescribed terms & conditions and Credit or through existing | procedures. Banking Channel or selling such products in domestic Resource Person: CA. Pramod Lingden, MBS, LLB Page 21 of 50market in convertible | foreign currency ©) Industries with packaging Notwithstanding anything contained in clause (b), with teria not produced in respect to packaging materials not produced in Nepal, | Nepal Such industries shall be entitled to facilities under lause (b) only after being certified by the department that those are not be produced in Nepal and | recommended for providing facilities. d) Any industry Custom Duty levied in the import of raw materials, auxiliary raw materials, packaging materials required for its production shall be one /evel below the existing Custom Duty rate levied in import of finished goods using such raw materials. ia e) Any industry Custom duty shall be levied at minimum rate on import of machinery or generators and other industrial equipment having a capacity of 10 Kilowatt or more a imported for commercial purpose by an industry. ___ {Laboratories for Quality | Custom Duty shall be imposed at minimum rate onthe | Measurement & import of: Any industry Machinery and scientific equipment that are being imported for the purpose of measuring quality by Laboratories conducting Quality Measurement ¢> Machinery and equipment that are being imported ‘ for research and development by industries __ 2) Industries producing |Such industries producing intermediate goods are reesrediate goods (semi- | entitled to claim the refund ofthe custom duty paid on Naked goods) by the production materials imported based on the importing materials which quantity of export of finished goods. aes inthe finished| Provided that, refund shall not be given i) goods to be exported application for refund of such amount is not filed within |_year of export. ‘ 26. Other Facilities and Concessions for Micro Enterprises: (1) Notwithstanding anything contained in prevailing law, no any fee or charge shall be imposed for the registration of micro enterprises. (2) Pollowing micro enterprises are entitled to 100% income tax exemption ff Micro onterprises already registered and are under operation at the time of | commencement of this Act, and le Micro enterprises to be registered and operated pursuant to this Act | 27. Additional Benefit for Women Entrepreneurs: (1 Notwithstanding anything contained in prevailing law, in case of industries of firm renistered under the ownership of woman entrepreneur(s) only, thirty five percent Resource Person: CA. Pramod Linden, MBS, LLB Page 22 of 50ICAN STUDYMATERIAL /CAP-II, CAP-IIl& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 exemption shall be provided at charge or fee to be imposed under laws while registering such industries or firm. (2) Notwithstanding anything contained in prevailing law, in case of industries registered under the ownership of woman entrepreneur(s) only, twenty percent exemption shall be provided at charge to be imposed while registering industrial property for the use of industries, (3) Women entrepreneurs, if desire to establish a new industry inside the industrial estate or industrial gram, shall be given priority by the entity operating such area for allocating the place. (4) Industry registered under the ownership of woman entrepreneur(s) only, in case demands loan for exporting produced goods, export finance may be provided to the industry depending upon the financial status of the transaction of the industry through banking channel from the Women Entrepreneurs Financing Fund as prescribed. 28. Special provision related to the industries operating at industrial zone: The Government of Nepal may make special provision in relation to incentive, exemption, facilities or concessions to industries those have come into operation within industrial estate, industrial cluster, industrial corridor and industry gram. 29. Additional facilities & concessions: In addition to the exemption, facilities and concession stated in section 24, 25, 26, 27 and 28, following additional facilities and concession may be provided to industries as follows (a) Industries based on forest products may be provided with possess and use right pursuant to prevailing laws over forest of any specified region at promissory oF on lease by specifying necessary terms and conditions (b) No fees or royalty as per prevailing law shall be charged in electricity produced by industry for its own consumption (c) Industry willing to sell surplus electricity produced for its own consumption may sell it under prevailing laws at mutually agreed rate. (4) Government of Nepal may provide additional exemptions and facilities to export oriented industries and industries as prescribed to be established in special ‘economic zone or government or private industrial estate by notification in the Nepal Gazette. (ec) Government of Nepal may, at recommendation of the Board, provide additional facilities and concessions by notification in the Nepal Gazette to national priority industries, or for industries established by making optimum utilization of native raw mate-ials, labor and skill, or by inventing new technology or goods within Nepal (f) Government of Nepal may provide exemptions in demand charge added in electricity cost at proportion of electricity load shedding period under prescribed basis by adopting prescribed procedure. Resource Person: CA. Pramod Lingden, MBS, LLB Page 23 of 50ICAN STUDY MATERIAL /CA) CAP-II1 & MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 _ (g) To establish industries in remote area, Government of Nepal may provide grants as prescribed by notification in the Nepal Gazette to cooperatives, micro enterprise, cottage and small industries in the form of seed capital. (hy Industries operating under foreign investment may be given permission to import goods produced by the holding company located in foreign countries for production & market development and promotion of new goods for a specified time period under terms & conditions and limitation as prescribed, (i) Government of Nepal may provide incentives, exemptions, benefits or concessions to: ‘Manufacturing industries except tobacco and liquor industries, Agro & forest product based industries and {+ Minerals industries 7 | (j) The exemption may be provided on the custom duty to be levied to the micro, cottage and small industries while importing novel technologies including machineries, tools, equipment as required for enhancing capacity of such industries. (k) The Government of Nepal may make special provision in relation to providing incentives, exemptions, benefits or concessions to the industries those have come into operation inside industrial estate, product specifie zone and industrial gram. (1) The Government of Nepal may provide additional incentives, exemptions, facilities or concessions to the industries established in the remote, undeveloped and under developed regions. 30. Provision relating to Land: (1) Land required for industries registered under this Act or prevailing laws shall be purchased by concerned entrepreneur selves pursuant to prevailing laws. Provided that, if the entrepreneur fails to acquire required land for operating industgies as prescribed and requests by disclosing the same matters for purchasing land or making available the land, the Industry Registration Body may provide necessary coordination and facilitation in relation to acquiring the land or making available the land. (2) Procedure and other provision to coordinate and facilitate for making available the land shall be as prescribed 31. Making available land on Lease: (A) Ifthe land owned by the Government of Nepal is required for operating the National Priority Industry, such industry may apply as prescribed to the Industry Registration Body for making available the land by disclosing the area of land required to it, (2)If the application has been received pursuant to sub-section (1), the Industry Registration Body shall, in relation to making the necessary land available for the industry, submit it to the ministry for proceeding necessary actions. (3)In case the application has been received under sub-section (2), Government of Nepal may make available such land to the concerned industry on lease for the purpose of industry operation pursuant to prevailing laws. Resource Person: CA. Pramod Lingden, MBS, LLB Page 24 of 50ICAN STUDY MATERIAL /CA 1, CAP-III & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 (4) While maxing available the land owned by the Government of Nepal on lease under sub-settion (3), the amount to be paid by the industry and other conditions reearding the lease shall be as prescribed in the agreement concluded between the Government of Nepal and the concerned industry. (5) In case the industry being operated after obtaining the land as per this section fails to operate due to any reason, the lease agreement of land made available by the Government of Nepal under sub-section (3) shall be, ipso facto, terminated and such land shall be deemed to have been received in return, ipso facto, by the Government of Nepal (6)Other provision related to providing land on lease to industries shall be as prescribed 32. Exemption on Maximum Ceiling of Land: (1) Incase the land required by any industry is more than the maximum ceiling of land specified under prevailing laws, such industry may submit an application to the Industfy Registration Body for getting exemption on holding to the extent of excess land. (2)Industry Registration Body shall, upon necessary inquiry on the application received under sub-section (1), submit a report along with opinion to the Ministry (3) Upon application received under sub-section (1), Government of Nepal may grant exemption for retaining the land excess to the maximum ceiling: As per necessity of the industry and As specified in the approved scheme or project proposal of the industry subject [ to prescribed standards. ‘The land provided at such exemption in excess to maximum ceiling shall not be used for other purpose except the purpose for which the exemption has been granted, (4) Industyy Registration Body may monitor or cause to monitor as prescribed in relation to whether the industry receiving the land in exemption under prevailing laws has been using it in accordance with approved objectives and may provide necessary directions (5) Incase the industry found to have been failed in complying with directions provided by the Industry Registration Body under sub-section (4), Government of Nepal may, in excess to the exemption limit of land for which the industry had obtained approval, get the land return pursuant to prevailing law without any term & condition (6) Industry that has received approval to retain land in excess to the maximum ceiling under prevailing law shall not be entitled to sell or transfer ownership of such land by any way or borrow loan by pledging such land at bank and financial institution (7) Maximum area of land that an industry is entitled to retain on the basis of necessity, capital and nature of industry, provision related to providing land in excess to the exempsion limit and standards including the terms & conditions to be complied Resource Person: CA. Pramod Lingden, MBS, LLB Page 25 of 50ICAN STUDY MATERIAL /CAP-II, CAP-II1& MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 with by industry in relation to it shall be as prescribed subject to land related prevailing laws 33.Guarantee for Incentive, Exemption, Facility or Concessions: (No any provision shall be made to fessem at the incentive, exemption, facility or concession made available to industries by this Act. Provided that, no any provision of this section shall hinder for making available additional incentive, exemption, facilities or concessions. Guarantee [Type of Industry | 2) Industries which ‘Time Bound. are in operation | With respect to incentives, exemptions, facilities or | | after being concessions for which period had been specified under registered or | such Act (ie. IFA, 2073), these industries shall entitle | obtained incentives, exemptions, facilities or concessions as per permission same Act (ie. IEA, 2073) under Industrial Enterprises Act, 4 Other: 2073. that With respect to incentives, exemptions, facilities or prevailed concessions for which period has not been specified under immediately such Act (ie. IEA, 2073), these industries shall entitle prior to | incentives, exemptions, facilities or concessions as per this, commencement Act (i.e. IEA, 2076). ofthis Act | 3) Industries which | These industries shall be entitled to enjoy incentives, got registered or exemptions, facilities or concessions as per this Act (ie. /EA, | obtained 2076) | permission prior to the | Provided that, such industries shall be entitled to enjoy the commencement | incentives, exemptions, facilities or concessions under the of this Act, but | then Industrial Enterprises relevant prevailing law (i.e. IEA, | commenced | 2073), if the fime bound incentives, exemptions, facilities or | commercial _| concessions to be enjoyed under the industrial enterprises production or | related prevailing law prevailed at the time of registration or transaction only | obtaining permission by such industry: | after the “are for longer period than the period of incentives, commencement | exemptions, facilities or concessions granted by this Act, of this Act. or + If such incentives, exemptions, facilities or concessions are | not provided under this Act. (4) The procedure relating to making available the incentives, exemptions, facilities or concessions to industries shall be as prescribed. ’ Resource Person: CA. Pramod Lingden, MBS, LLB Page 26 of 50ICAN STUDY MATERIAL /CA 34, Not to be nationalized or acquired: (1) No any industry registered under this Act shall b (2)No any industry shall directly or indirectly be ac While acquiring for public purpose, an appropriat CAP-IN1& MEMBERSHIP/INDL USTRIAL ENTERPRISES ACT, 2076 e nationalized, .quired except for public purpose. fe procedure under prevailing law shall be completed, 35.Provision related to industrial security: For industries established under prevailing laws, Go necessity, provide industrial security as prescribed. 36.Prohil (1) Incentives, exemptions, facilities or 2) If any industry commits any act against this Act incentives, exemptions, facilities or concessions wi provided to such industries. Resource Persgn: CA. Pramod Lingden, MBS, LLB yvernment of Nepal shall, as per bition on misuse of incentives, exemptions, facilities or concessions: joncessions to be received by industries under this Act shall be used exchisively at the purpose for which they have been gr anted. ‘or Rules made under this Act, inder this chapter shall not be Page 27 of 50ICAN STUDY MATERIAL /CAP-I, CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 Chapter 6 Provision related to One Stop Service Centre 37. Establishment of One Stop Service Center: ‘(1)Government of Nepal may establish and bring in operation One Stop Service Center as prescribed for the purpose of: > Providing services, incentive, exemption, facilities or concession to be received by industries or investors under this Act and other prevailing laws through an easy & convenient process, and 4 Making available different activities to be executed by different entities of the Government of Nepal from one place on time, and ‘ Delivering services related to permission, registration, expansion and | liquidation of industry. (2) Located place of One Stop Service Center pursuant to sub-section (1), services to be provided to industries through the center, entity wise representation in the center shall be as prescribed. (3) The concerned entity shall, for having representation in One Stop Service Center, deploy the required number of employees. While deploying the employee at One Stop Service Center in such a way, necessary power shall also be delegated by the authorized authority to such employee subject to prevailing law (4) Other provisions related to One-Stop Service Centre shall be as prescribed. (5) Until the formation of One Stop Service Centre pursuant to sub-section (1), Government of Nepal shall constitute One Stop Service Operation Committee by notification in the Nepal Gazette 38,Function, Duties & Powers of One Stop Service Centre: (1) Function, Duties & Powers of One Stop Service Centre shall be as follows; (a) To carcy out activities related to: f “Industry and business administration including registration, permission or license, renewal, transaction permission, capacity enhancement of company, firm or indust:y. and & Liquidation (except insolvency) of company, firm or industry | E -pursuant to prevailing law (b) To perform activities related to approval of foreign investment under prevailing law, (c) To perform activities related to labor approval and work agreement under prevailing law, (d)To perform activities related to visa facility under prevailing law, Resource Person: CA, Pramod Lingden, MBS, LLB Page 28 of 50 *CAN STUDY MATERIAL /CAP-Hl,CAP-III & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 (e) To perform activities related to Initial Environmental Examination and Environmental Impact Assessment under prevailing law, () To coordinate with concerned entities for providing infrastructure services like electricity, water, communication means, land, road and to perform activities related to focal point, (g) To implement or cause to implement the decisions made by the Government of Nepal in relation to making available incentives, exemptions, facilities or concessions under prevailing laws to industries and investors, (h) To perform activities relaied to approval of foreign currency exchange in accordance with prevailing law, (i) To issue permanent accounting number (PAN) as per prevailing laws, (j) To carryout activities of obtaining export, import (EXIM) code number from the department of commerce, supplies & consumer protection and department of custom, and to carryout activities related to facilitation of bonded warehouse, (k) To perform functions, duties and power delegated by the Board, (1) To carryout entity wise coordination for making available the approval letter by filing application at matters requiring entity wise approval including mines necessary for industries, (m) To identify the required documents for industry enterprise registration and accept them in electronic form, and to develop & implement a system to be used by tnter entities via electronic system among all entities, (n) To provide necessary coordination and facilitation for making available the land required for industries, and to assist in making available the land on lease, and to coordinate for making available the land above the ceiling, (0) To provide approval under prevailing law, if the goods require import approval or offer recommendation of the same, (p)To establish & operate the investment portal and provide notifications & information related to investment, (q)'To carry out all type of recommendations and facilitation required for industry business, (x) To implement or cause to implement the decision or direction issued by the Ministry and Board. (s)'To perform such other activities as notified by Government of Nepal in Nepal Gazette. (2) The céncem entity shall implement the decision made by the One Stop Service Center as per this section, (3)Provision related to operation, management of One Stop Service Center and service, facilities and concessions to be provided by such center and its procedure shall be as prescribed. Resource Person: CA. Pramod Lingden, MBS, LLB Page 29 of SOICAN STUDY MATERIAL /CA) CAP-IIl & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 Chapter 7 39. Identification of Sick Industry: (1)Government of Nepal may, by adopting procedure as prescribed, declare any industry as sick industry on the basis of standards as prescribed, if Industry is in operation for at least 5 years from the date of commencement of | its'commercial production or transaction, and Not by intention or management weakness of industry self, instead due to out of control situation, the incustry is ¥ Operating in 30% or less of installed capacity of the industry for last 3 consecutive years, and |__ Operating in loss continuously during period of such 3 consecutive years. (2)In case the industry may be re-operated if made available certain exemptions, facilities or concessions to such industry which has been closed down afer becoming sick pursuant to sub-section (1), then the GON may, on the basis of scheme or project proposal presented by such industry and study of the Ministry, make available the exemptions, facilities or concessions as prescribed for certain period for the revival, restructure and management of such industry. (3)For the purpose of operation of the industry declared as sick industry by Goverment of Nepal under sub-section (1), ifany cooperative society proposes for its operation at consent of investors, the industry may be caused to operate through such cooperative society taking into consideration the capacity, appropriateness including feasibility of such cooperative society and subject to prescribed terms and conditions 40. Classification of Sick Industry: "On the basis of standards as prescribed, industries identified under section 39 shall be classified into fally sick, sick and sick oriented industries and necessary provision as prescribed may be made for the management of such industries. 41.Facilities, Concessions and Exemptions related to sick industries: Notwithstanding anything contained in the prevailing law, Government of Nepal may provide full or partial exemption on duty, fee or tax while importing machinery tools or equipment by industries identified as sick industry pursuant to section 39 or industries’ classified pursuant to section 40 for the expansion, restructuring or diversification of such industries. 42. Institutional provision relating to Sick Industry: (1) Government of Nepal may form a committee including experts of related field for providing recommendation to identify, classify, revival, reconstruction and management of sick industries pursuant this Chapter. (2) The structure, functions, duties and power of the committee constituted under sub- section (1) shall be as prescribed. Resource Person: CA. Pramod Lingden, MBS, LLB Page 30 of 50__ CAN STUDY MATERIAL /CAP-Ul, CAP-U & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 _ Chapter 8 Provision related to Punishment and Appeal 43.Pui : (If anyone found to have been operating industry without being registered under section (3), the Ministry may at recommendation of Industry Registration Body ‘cause to close down the industry immediately and impose fine to such industry as follows: | Offence — Operation of industry a) Micro Enterprise without registration b) Cottage & Small Industry c) Medium Industry _ d) Large Industry 50,000 | 100,000 (2) [any industry acts against its objective, the Ministry may at recommendation of Industry Registration Body impose fine to such industry as follows __ Offence [Size of Industry | FineRs__| Carrying out |a) Micro Enterprise _ Up to 2,000 activities against the b) Cottage & Small Industry ~ Upto 50,000 | objectives of industry c) Medium Industry. d) Large Industry [ _ (3)If any industry fails to provide information regarding the commencement of industry operation or its commercial production or transaction within the period prescribed under section 9, the Ministry may at recommendation of Industry Registration Body impose fine to such industry as follows: __ __ Offence i ry | Fine Rs Failure to notify about |a) Micro Enterprise | 2,000 for each 6 months period industry operation, b) Small & Cottage | 10,000 for each 6 months commercial Industry period production or ¢) Medium and | 25,000 for each 6 months | transdetion on time Large Industry | period ia (4) If any industry makes transfer of industry without obtaining approval as per section 11 or increases capital, increases capacity, add or change objective without obtaining approval as per section 12, the Ministry may at recommendation of Industry Registration Body impose fine to such industry as follows: Resource Person: CA. Pramod Lingden, MBS, LLB Page 31 of SOOffence Size of Industry _ Transfer of ana)Micro Enterprise | industry without b) Cottage & Small | From 25,000 to 50,0 approval Industry (Note: Additional 100% fine 4 Increment of capital, for industry requiring enhancement of ___| permission under section 8) _| capacity, add or alter ¢) Medium & Large | From 100,000 to 300.000 objectives without | Industry (Note: Additional 100% fine approval for industry requiring | ‘permission under section 8) _| (5) fany industry fails to make available particulars preseribed under section 13 within the prescribed period, the Industry Registration Body may impose fine to such industry as follows: Offence e of Indust [Fine Rs | Size of Industry ____ | Failure to submit a) Micro Enterprise 1,000 | particulars within b) Small & Cottage Industry | stipulated time ) Medium Industry | d) Large Industry - (© IF any industry does any act against section 36, the Ministry may at eas ondation of Industry Registration Body, bar at any time the incentive, ‘xemption, facility or concessions made available to such industry, recover amt quivalent to such incentive, exemption, facility or concession, or impose fine equivalent to it (aif any industry does not bear corporate social responsibility under section 54, the Ministry may, at recommendation of Industry Registration Body, impose fine at eee vneal net profit, The industry not bearing such responsibilty for period ire than one year shal be imposed additional fine a 0.5% p.a. of annual net profit for each fiscal year. (@) It any industry does not comply’ with conditions as per this Aet or rules made under this Act, or does not comply with directions provided by the ministry from time fo time on the recommendation of entity registering the entity, the Industry Registration Body may impose fine as follows to such industry * Offence ___ Size of Industry | Fine Rs _ | Non-compliance of Micro Enterprise ae ~__ Upto 5,000 | any conditions of | Cottaye & Small Industry | From 50,000 to 100,000 directives provided by Medium Industry From 150,000 to 300,000 the Ministry Large Industry : From 250,000 to 300,000 Resource Person: CA. Pramod Lingden, MBS, LLB Page 32 of 50ICAN STUDY MATERIAL /CA. CAP-II. |& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 (0)For industry doing any other act against this Act or rules made under this Aet other than written in this section, the ministry may on the recommendation of entity registering the entity impose fine as follows: Offence Size of Industry Fine Rs Any other non-compliance | Micro Enterprise ~ Up to 15,000. provided under the Act Cottage & Small Industry. )00 to 30,000 nd Regulation framed | Medium Industry | From 30,000 to 50,000 | pursuant to the Act Large Industry From 50,000 to 100,000 | (10)White imposing fine under this section, fine in addition to 50% fine as per this sectiow shall be levied with respect to any industry requiring permission pursuant to section 8. (Notwithstanding anything contained elsewhere in this section, provision related to the fine and punishment regarding industries registered and operated from Province and Local Level shall be as determined by the eoncem province or local law 44.To be recovered as government due: Fine snount levied as per this Act shall be recovered as government due pursuant to prevailing law. 45,Opportunity for submitting clarification shall be provided While punishing any industry under this chapter, reasonable opportunity for submitting clarification shall be provided. 46.Provision related to appeal: (A) If not satisfied with the decision of punishment made pursuant (0 this Chapter, appeal shall be made to the igh Court within thirty five days from the date of getting information of the punishment. (2) Appeal may be done: : “ To the concerned District Court with respect to the decision made by the | Industry Registration Body of Local Level, and & To the concerned High Court with respect to the punishment made by the | |__ Industry Registration Body of Province and Department Resource Person: CA. Pramod Lingden, MBS, LLB Page 33 of 50TERIAL /CAP-I, CAP-Il& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076. Chapter 9 Miscellaneous 47. Provision related to special economic zone: Far ihe intensive operation of industrial activities, the provision related to economic gone, inter country economic zone, export promotion zone, export processing Zone, “peeaal evonomic zone, special trade zone, tourism or any other zone shall be as prescribed in the prevailing law. 48. Provision related to Nepal Entrepreneurs. Forum: {Government of Nepal may constitute Nepal Enterprise Forum including the represent: tion of private sector with purpose of ‘® Promoting regular dialogue and coordination between public and private sector at matters related to effective implementation, coordination and facilitation of policy and law related to industrial enterprise, ¢ Offering suggestion and recommendation to the government as necessary by identifying the obstacle, obstruction and problem that arise at operation and investment of industrial enterprise; assisting for implementation and monitoring of such recommendations, and ¢ Providing institutional basis for regular, result oriented and transparent dialogue between public and private sector (2) Constitution, structure, functions, duties and power and other provisions of Nepal Enterprise Forum shall be as prescribed. 49. Industrial human resource: Ti) Human r2sources required for any industry shall have to be fulfilled from among Nepali citizens. (0) Notwithstanding anything contained in sub-section (1), such industry may appoint foreiun citizens for maximum five years by obtaining work permit under labor related prevailing law at recsmmendation of the Department pursuant to sub- section (3), if the following human resource required for the industry cannot be made available even after publishing advertisement at national level newspaper: “Human resource with any special skill or competency, or + At position of high management level. ) For the purpose of sub-section (2), the Industry Registration Body shall, while making recommendation to the Labor Department for work permit, confirm ‘ Attempted to fulfill human resource with skill or competency demanded by such industry from among Nepali citizens, 4 Tuman resources with such skill or competency are required for industries, and 4 Such luman resources are not available in Nepal. @ Ifa fokeign citizen appointed pursuant to sub-section (2) happens to be a technician of special category and such human resource is not available within Nepal, such Resource Person: CA. Pramod Lingden, MBS, LLB Page 34 of SO{CAN STUDY MATERIAL /CAP-Il,CAP-/ & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 human resource may be re-appointed for up to an additional period of 2 years taking approval under sub-section (3) (5) A foreign citizen who is appointed in any industry pursuant to sub-section (2) may repatriate outside Nepal 70% of his or her remuneration in convertible foreign currency, (© Laborers working in industries are prohibited for carrying out any type of activity that obstructs at operation of industry and its production. Labourers working in industries shall solve their demands at mutual consent in a peaceful way by submitting it to the management and fulfilling the process determined by labour related prevailing law (7) Individual or collective dispute arise between labourers working at industry and the industry shall be settled as per labour related prevailing law, (8) In case industries get closed down due to any activity conducted by labourers creating obstacles or obstruction at operation of industry and its production, then the cencemed industry or enterprise shall not be compelled to make available remuneration for that period not performed the work to such labourers and employees who + close the industry, ot do not carry out work 50. Production may be done by concluding a contract: (1)Any industry being registered and operated pursuant to prevailing laws may conclude a contract or sub contract with other industries for producing any part of its production of auxiliary goods or services necessary to the industry except the main product. (2)In case of producing goods or services at certain quantity for Export Oriented Industry by completing standard as prescribed and concluding a contract or sub contract as per sub-section (1), such industry may also be provided with incentives, exemptions, facilities and concessions as prescribed. (3) Other provision related to the production as can be done by concluding a contract or sub contract shall be as pres:ribed. 51. Industrial and Investment Promotion Fund: (1) The Government of Nepal shall establish an Industrial and Investment Promotion Fund for the industrial Promotion and Conservation of country. (2) The following amounts shall be credited to the fund as referred to in Sub-section ()- (a) Amounts received from the Government of Nepal, (b) Amount received from native association, institution or persons, (c) Amount received as investment redemption from Micro, Cottage & Small Enterprise Development Fund, Micro, Cottage & Small Industry Loan Disbursement Fund, Technology Development Fund, Women Entrepreneurship Development Fund, Venture Capital Fund, Sick Industry Revival, Resource Person: CA. Pramod Lingden, MBS, LLB Page 35 of 50Ml, CAP-IlI & MEMBERSHIP/IND| USTRIAL ENTERPRISES ACT, 2076 Reconstruction & Management Fund and Industrial Investment Conservation & Promotion Fund and amount retained at such fund, (a) Amounts obtained as bilateral or multilateral grants oF assistance from any foreign government, international associations and institutions. Provided that prior approva’ of Government of Nepal, Ministry of Finance shall be obtained prior to receiving grants or assistance from foreign government, international associations and institutions. (3) Amount of fund as referred to in Sub-section expenditures (1) may be spent in following {a) Development of micro enterprise, cottage & small industry, (b) Development of Technology, (c) Industrial promotion, (a) Revival, reconstruction and management of sick industry, (e) Women entrepreneurship development. (4)In making, expenditures pursuant to Sub= made subject to the approved annual budget (5) Other provision related to the operation and man: prescribed. ‘ction (3), such expenditures shall be agement of the fund shall be as §2.Provincial Industrial and Investment Promotion Fund: (1) The Provincial Government may establish a Provincial Industrial and Investment Fund for the promotion and conservation of industrial investment of the province. (2) The operation and management of fund to be established as referred to in sub- section (1) shall be pursuant to province law (3) The amount of fund as referred to in sub-section (1) may be spent for activities mentioned under sub-section (3) of section 51 53. Not to provide dual facilities: (1) While providing service, facilities or concessions under this Act or prevailing law, the Gavernment of Nepal or Provincial Government shall not provide any service, facilities or concessions In @ dual manner. (2)"To provide information: | Information about service, facilities or concessions granted fo any industry $ By Government of Nepal about service, facilities or concessions granted to any industry under this |_ Act Provide its information To the concerned Provincial | Ministry or entity where such | industry has been establishes ¢By Provineial Government about service, To the Department facilities or concessions granted to any industry | | under provincial law. | _| ‘ Resource Person: CA. Pramod ‘Lingden, MBS, LLB Page 36 of 50ICAN STUDY MATERIAL /CAP-I, CAP-Il& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 54, Provision related to Corporate Social Responsibility: (J) Appropriation of net profit - Industry I Appropriation of Net profit ] % Cottage or small industry with | Shall appropriate at least 1% amount of transaction more than Rs 15 Crore | annual net profit in each fiscal year for pa the purpose of bearing corporate social Medium Industry responsibility ‘Large Industry i (2)Amount appropriated under sub-section (1) shall be spent at prescribed sector framing annual budget and program. (3) Industries shall submit particulars of program completed in each fiscal year as referred to in sub-section (2) and amount spent in such program within 6 months after the expiry of fiscal year to the concemed Industry Registration Body. (4) Amount appropriated for corporate social responsibility under sub-section (1) shall be entitled to deduct as expense for the purpose of income tax. 55.Industry gram, industrial cluster, industrial estate, special economic zone or industrial corridor may be declared (1) Government of Nepal may deciare any part or place of the country having adequate possibility and opportunity for the industrial development as industry gram, industrial cluster, industrial estate, special economic zone or industrial corridor by notification in the Nepal Gazette after making standard. (2)Industry gram, industrial cluster, industrial estate, special economic zone or industrial corridor declared under sub-section (1) shall be provided with service, facility and concessions to be received by other industries under this Act and - prevailing law 56. Not to construct building or to settle: (1) No any type of residential building or other building be constructed or be settled at area and within distance of industry gram, industrial estate and special economic zone ae prescribed by Government of Nepal by notification in the Nepal Gazette (2)In case loss incurs due to restriction to construct residential building or other building or to settle on anyone private land at area and within distance prescribed under sub-section (1), the Government of Nepal shall provide reasonable compensation to the concerned person by fulfilling the procedure as prescribed within the prescribed period. 57. Electronic medium may be used: Industry registration body may, for making simple and easy the acts and actions as prescribed related to industry administration under this Act, make a necessary provision as can be done through electronic medium under electronic transactions relevant prevailing law. Resource Person: CA, Pramod Lingden, MBS, LLB Page 37 of 50ICAN STUDY MATERIAL /CAP-I, CAP-I& MEMBERSHIP/INDUSTRIAL. ENTERPRISES ACT, 2076 58, Provision related to automatic approval process may be made: (i)For making the process related to industry administration simple, easy & predictable, the Government of Nepal may implement from the automatic route the vervices ralated to industry registration to liquidation process, type of industry, haturevof industry or limit of investment including other by prescribing matters under this Act & other prevailing law 2) Provision related to automatic approval process under sub-section (1) shall be as prescribed 59. Authority may be provic led: A) Any industry or person having ownership at such industry may provide authority to any person for doing any or all works to be done by self under this Act. (2) For doing work as per authority under sub-section (1), the photocopy of such authority letter shall be certified from notary public and make it available to the Industry Registration Body. The Industry Registration Body may see original of such authority if deemed necessary. 60. Special provision related to time extension or re-registration: (iyFollowting industries which were registered under prevailing law at the time of commencement of this Act may apply to the Industry Registration Body within 3 month from the commencement of this Act for the extension of time for one time: [ Industries which have failed to commence industrial operation, commercial | production or transaction due to expiry of time limit for commencing operation ‘or commercial production or transaction of industry, ot Industries which have lapsed the time that was extended previously and even | : within the extended time, the industries became unable for operation or |_ commercial production or transaction of industries. J (2) Industry Registration Body may, if deems appropriate for extension of time upon the enquiry on the application received under sub-section (1), extend the time limit by fulfilling the process as prescribed by this Act and collecting fees as follows a —— — With respectto | Fee at the rate of 1 ((@)Micro Enterprise Rs. 5.0003 (b) Cottage & Small Industry Rs 15,000 pa [(e)Medium Industry Rs 50,000 p.a. ((@)Large Industry Rs 1,50,000 p.a. | (3) Information of decision related to time extension of any industry under sub-section (2) shall be provided to the concemed applicant within 7 working days of decision made 61. Local level may carry out functions related to industry administration: Resource Person: CA. Pramod Lingden, MBS, LLB Page 38 of 50 ‘ICAN STUDY MATERIAL /CAP-II, CAP-IIl & MEMBERSHIP/INDUSTRIAL ENTERPRISES [Activities related to registration, administration and regulation of following industries may be carried out by local level as provided in federal and provincial laws: ‘4 Micro enterprise, and 4 Cottage and small industry with fixed capital up to the amount as prescribed in provineial law. | + 62. Application may be file The suffered party may apply to the Ministry: 4+ If requires to decide at matters other than that lie within the jurisdiction of the Board, Province and Local level, or 4 If the work does not get completed within the period stipulated for completion 63.Delegation of Power: (J) The Board may delegate any of its power conferred upon it by this Act or Rules made thereunder to the secretary of Ministry, Director General of the Department or Gazetted officer employee of the Government of Nepal or Province government or Local Level as necessary. (2) The Department may delegate any of its power conferred upon it by this Act or Rules mae thereunder to any Gazetted employee of the Government of Nepal as necesshry. 64. Power to Remove Difficul 3 any difficulty arises in connection with the implementation of this Act, Government of Nepal may issue orders to remove such difficulty by notification published in the Nepal Gazette. 65, Alteration or Addition Reduction may be made in schedule: Government of Nepal may, by notification in the Nepal Gazette, bring the alteration, addition reduction or modification as required in schedules 66. This Act to Prevail: This Act shall prevail in matters written in this Act and in other matters prevailing law shall prevail 67. Power to Frame Rule: Government of Nepal may frame necessary Rules to implement this Act. 68. Directives, Procedures or standards may be prepared and implemented: (1) The Government of Nepal may, for making act and actions related to industry administration easy and simple subject to this Act and Rules framed under this Act, formulate and implement directives, procedures or standards at following matter as necessary Resource Person: CA. Pramod Lingden, MBS, LLB Page 39 of 50__ICAN STUDY MATERIAL /CAP-IL CAP-I& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 (a) Registration and regulation of industry, (b) Promotion of native production, (c) Incentives, exemptions, facilities or concessions to be made available to industries, (4) Related to sick industry, (e)In relation to industrial estate, industrial corridor, industrial cluster and industiial gram, (0) Optration and management of fund, (g) Use of electronic medium at service delivery, (h) Automatic process for investment approval, (i) Work operation of Nepal Enterprise Forum, {{) Related to operation of One Stop Service Center, (k) Related to corporate social responsibility, (2) Notwithstanding anything contained in sub-section (1), the Ministry may formulate and implement necessary standard operating procedure including the procedure of electronic service delivery 69. Repeal and Savings: (1) The Industrial Enterprises Act, 2073 is hereby repealed (2) All acts performed or action taken under the Industrial Enterprises Act, 2073 shall be deefned to have been performed or taken under this Act. Resource Person: CA. Pramod Lingden, MBS, LLB Page 40 of 50ICAN STUDY MATERIAL /CA wears 10, 10, " CAP-Ili & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 Schedule-1 (Related to section 8) Industries producing arms, ammunitions, gun powder, or explosive substances, Security Printing, currency & coins producing industries, Cigarette, bidi, chewing tobacco, cigar and industries producing other goods of a similan nature utilizing tobacco as the basic raw material and industry producing electric cigarettes (vape), Microbrewery, beer, alcohol or alcoholic substances producing industries, Stone, ballast, sand excavation, processing industry, Industries producing radio communication equipment, Precious minerals and petroleum products excavation industries, Liquefied petroleum gas (1.P.G) refilling industries, ‘All kinds of industries that produce drone products or provide services through drone, Other industries that need to take permission as prescribed by prevalent laws. Schedule-2 [Related to clause (b) of sub-section (1) of section 17] ‘ Cottage Industry Hand looms, paddle looms, semi-automatic looms, fabric wrapping; dyeing, printing, sewing (except readymade garment) and weaving through traditional technology, Hand woven Radi, pakhi, carpet, pashmina, dress based on wool and silk, handmade paper and goods based on it, Items based on traditional crafts, ‘Traditional sculpture, Handmade utensils and handicrafts made of metals such as copper, brass, dhalot,kaash, and German silver, Handmade utensils made of iron and items of home use such as knifes, chulesi, sickle, spade and so on traditional tools, Handmade ornaments made of gold and silver, utensils (including valuable, semi- valuable goods, utensils and normal stone fitted), Stone-cutting industries (precious, semi-precious and ordinary stones available in the country), remote tanning/handmade items made of leather Industries based on natural fiber including jute, sawai grass, bamboo fiber, grass, cotton threads, allo ete Stone-art (goods made from stone carving), Pauva, Thanka art and other traditional fine art, Resource Person: CA. Pramod Lingden, MBS, LLB Page 41 of 50__ ICANSTUDYMATERIAL /CAP-I. CAP. AWSYN eye Masks and dolls and toys demonstrating traditional culture, Various handicraft items demonstrating traditional culture, musical instruments, and art Decorative items made of wood, bone, hor, clay, stone and artistic goods made from minerals, Ceramics and clay pots Hand printing brick industry “ Schedule-3 [Related to clause (a) of sub-section (2) of section 17] Energy Based Industry Industry generating energy from water resources, wind, solar, coal, natural oil and fuel or gas, bio-gas or any other sources and industry producing machines or equipment’s to be used by such industry; Electricity transmission line; Electricity distribution system; Energy based on Bio Gas; Electricity energy to be produced as a co-production of sugar industry; Feasibility study of energy Schedule-4 [Related to clause (c) of sub-section (2) of section 17] Agriculture and Forest Product bi sed Industry Related to production of fruits or storage of fruits, Related to production and processing and storage of foods Related to animal husbandry, poultry farming (including ostrich), bird animal breeding, eggs hatching business and meat produetion and processing Relateg to milk production and processing of dairy products (including dairy product production) Related to fishing, fish fry production, processing and packaging Related to industry producing animal bird granules ith agricultural product as the main raw material Related to Sericulture and silk processing Resource Person: CA. Pramod Lingden, MBS, LLB Page 42 of 50ICAN STUDY MATERIAL /CAP-I CAP-IIl& MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 _ nn 8. 9. 10. i 12. 13 4. 15 17. 18. 19, 10. Related to Tea Estate, Tea Prozessing Related to Coffee farming, cofee Processing Related to herbs farming, herbs processing Related to vegetables seeds production Vegetables farming, vegetables processing Green house establishment and operation Apiculture (bee breeding, honey production and processing) Floriculture, flower processing (including making garland, decorating, making bunch and producing seeds) Nursery business, establishment, protection and management of botanical garden, plant breeding business (including tissue culture) Rubber farming, preliminary processing and operation of rubber Related te operation and management of agriculture market and cold storage Relate! to. establishment and management of community, confessional, partnership, private forest and agriculture forest, other non-wood based forest Related to commercial faming and processing of cash crops Related to cane, bamboo farming, cane bamboo and other natural fiber based products production Related to seed processing Related to wood industry including Shaw-mill and furniture Related to wood industry like parquetting, seasoning, treatment plant, ply wood, composite, board. Related to non-wood forest products based industry including paper, resin Related to the production of mushroom, tissue culture, agro forest Related to cotton farming, production and processing of cotton and cotton seeds Schedule-5S [Related to clause (2) of sub-section (2) of section 17] Infrastructure Industry Road, bridge, tunnel Ropeway, railway, tram, trolley bus, monorail and sliding ear Plane runway/airport Industrial structure and it Meeting conference center Drinking water supply and distribution Irrigation infrastructure Sportsthouse, stadium Vehicle parking area, parking house Eport processing zone frastructure complex Resource Person: CA. Pramod Lingden, MBS, LLB Page 43 of SOICAN STUDY MATERIAL /CAP-Il, CAP-III & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT. 2076 ‘ 11. Special Economie Zone 12. Cargo complex 13. Waste-water treatment plant, 14. Telephone tower, optical fiber network, satellite, satellite transmission ceter 15, House and residential building 16. Film city construction, film studio const 17. Business complex 18. Private warehouse 19, _ Infrastructure construction, arrangement and operation of installation of pipelines for fuel and gas supply, 20. Infrastructure construction, arrat transmission line. tion ment and operation of energy house and energy ‘ Schedule-6 [Related to clause (f) of sub-section (2) of section 17] yurism Industry Tourist residence, motel, hotel, resort, bar and restaurant 1 2. Travel agency, tour operator, healing center, casino, massage, spa 3. Adventurous tourism: Trekking, skiing, paragliding, water rafting, hot air ballooging, cannoning, parasailing, horse riding, elephant riding, bungee jumping, mountaineering, zip flyer, ultra-light, sky walking, sky diving, and other adventurous games, 4. Construction and operation of able car, 5. Gulf course, polo, pony trekking, hiking, cycling 6 Remote tourism, home stay and environmental tourism, agriculture tourism 7. Cultural, religious, meeting conference and sports tourism 8. Entertainment park, water park 9. Wild life reserve 10. Museum. Resource Person: CA. Pramod Lingden, MBS, LLB Page 44 of 50ICAN STUDY MATERIAL /CAP-Il, CAP-Il& MEMBERSHIP/ INDUSTRIAL ENTERPRISES ACT, 2076 ‘Schedule-7 + [Related to clause (g) of sub-section (2) of section 17] Industry based on Information Technology. Communication Technology and Information Dissemination Part A Information technology industry: 1. Technology park 2. LT Park 3. Bio tech park 4, Software development 5. Computer and services relevant to it 6. Data processing 7. Cyber café 8. Digital mapping 9. Business Process Outsourcing (B P.O.), Knowledge Process Outsourcing (K.P.0), 10. Data center, Data mining, cloud computing I. Digital signature certifying agency, 12. Web portal, web designing service, web hosting, online categorized advertising service, Internet Service a 1 2. Telephone, Mobile phone, Mobile satellite phone operator service, 3. Teleport service 4. Satellite establishment and operation, satellite communication center establishment, VSAT service, 5. Broad band infrastructure, telecom tower, optical network, satellite network, 6. Social networking, online message, video call, conference Part C ‘Transmission Technology based industry I. FM, Radio, digital radio sei 2. Digital swellite television, satellite television, cable television 3. LP. television, online service Resource Person: CA. Pramod Lingden, MBS, LLB Page 45 of 50ICAN STUDY MATERIAL /CAP-HI. CAl o Digital ccble television, network, Direct to Home (D.T.H.) satellite service, M.M.BS. network, digital television, (D.T.TV) Recording studio, Transmission studio Print media industry, audio visual production industry, advertisement production industry Film or documentary production Schedule-8 [Related to clause (h) of sub-section (2) of section 17] Service-oriented Industry Workshop Printinfy press and service related to printing Professional research and development, management, engineering and design, legal, account, audit, educaticn training, educational and technical consultancy services, Ginning and bailing business Exhibition service Cultural and entertainment business Construction business Public transportation business Photography Hospital Nursing home, Clinic, polyclinic, operation of rehabilitation house, physiotherapy clinic, Ayurvedic and other alternative hospitals, Industry related to physical exercise, Yoga-meditation or training center, Acadefnic and Training Institution Library, Achieves and museum laboratory Aviation transportation service Sports service, Swimming pool, Operation of cold storage. House clearing, electrical fitting and repai Collection and sanitation of wastes, reprocessing of wastes Business of buying and selling house and land by land development Construction relevant heavy equipment rental, repair and operation Veterinary service Battery recharging Health checkup (s checkyp service vices like x-ray, CT scan, M.R.I, ultrasound) and health Resource Person: CA, Pramod Lingden, MBS, LLB Page 46 of 50ICAN STUDY MATERIAL /CAP- CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 26. Business for operating construction completed infrastructures [service operation such as: meeting conference building, drinking water supply, pipeline related to supply, of fuel and fel based gas, warchouse and storage, airport, bus park, Stadivn, sports complex, ropeway, road, irrigation, electricity transmission, electricity house, railway service, cargo complex, Inland Clearance Depo (1.C.D.) ‘Jbusiness: Food beating, grinding and packing activities dying, sizing and printing of cloth and thread (other than done by cloth knitting industry for own purpose) 29, Transport and cargo business or service, Custom Agent service. 31. Packaging, refilling ser station) (including L.P.G Gas refilling and vehicle gas refilling 32. Courier service 33. Dry-cleaning business 34. Beauty parlor 35. _ Interigg decoration 36. Business providing security service 37. Publication service 38. Advertisement service 39. Service related to preparing advertisement materials 40. Industry related to general information dissemination service, 41, Program made for broadcasting via television and production & transmission of documentary telefilm 42. Soil testing service 43. Water purification, delivery and distribution service. 44, Health club 45. Operation related to zoological, geological, biotech park 46. Business Incubation service 47. Operation of trading business complex 48. Foreign employment service 49. Cinema hall including multiplex, 50, Theater including multiplex, Stitching, Knitting Electricity survey Minerals study and research Research and development service Sanitation service Wholesale and retail business service Industry related to e-commerce, industry business providing services to the general public via electronic portal (online or software or applications or other medium of similar nature), 58, _ Industry related to service of leasing machinery equipment, Resource Person: CA. Pramod Lingden, MBS, LLB Page 47 of 50ICAN STUDY MATERIAL /CAP-II, CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 59, Industry related to service business such as purification or processing of cut-to- length sheet, photo film, slitting, ball wiring assembly produced in nominal amount and importing finished goods in bulk and repacking, 60, Busingss related to clothing and yarn designing, yam sizing, and printing on clothes 61 (except weaving industry doing such for its own purpose), Industry related to veterinary service operated as a business, 62. Service apartment, 63. Food court, catering, and mobile food stalls, 64. 9. Service related to equipment repairing and installation, ready mix conerete, export house, technology and invention center, service relating to providing facilitated workspace. Schedule-9 (Related to section 19) National Priority Industry ‘ Cottage industry Energy based industry Agro and Forestry ~based Industries Infrastructure industry, Export oriented industry Adventurous tourism with infrastructure, remote tourism, environmental tourism, ulf course, polo, pony trekking, hiking tourism, rafting, meeting and conference tourism, sports tourism, religious tourism, cultural tourism, entertainment park construction and operation, wild life reserve. Mine and mineral based industry, petroleum and natural gas and fuel exploration and production Industry producing clinker and cement using native lime stone, industry producing pulp and paper, chemical fertilizer (other than mixed), organic fertilizer, shoes and slippet’s, thread manufacturing, livestock farming, fishing, poultry farming and apiculture, floriculture, initial processing and manufacturing of rubber products based on native raw materials, milk powder, medicine production, processing of garbage and waste, industry manufacturing equipment that saves fuel, industry manufacturing equipment that mitigate pollution and industry manufacturing means and equipment that are used by disable, industry manufacturing agricultural machines and equipment, industry manufacturing electric vehicles, industry producing medicine for snakebite, industry manufacturing artificial eye lens, ‘Academic and training institutions and bio research center, health laboratory, health checkup service, animal hospital, nursing home and hospital to be established outside Kathmandu valley, metropolitan city area and sub metropolitan city area of Terai region Resource Persen: CA. Pramod Lingden, MBS, LLB Page 48 of 50CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 10. Industry related to information technology, HL. Industries established inside the Industrial estate, Special economic zone and industrial gram built and operated by the private sector, 12, Industry ‘manufacturing goods as listed in Nepal Gazette providing required standaeds with prescribed high price low weight/volume, 13, Industry producing goods and services specified by the Government of Nepal approved Nepal Trade Integration Strategy (NTIS), 14, Film production. Schedule-10 Classification of districts based on Industrial development [Related to clause (c) of sub-section (2) of section 24] (a) Remote Area 1, Darehyla 2. Baitadi 3. Bajhang, 4, Bajura 5. Achham 6. Doti 7. Mugu 8. Dolpa 9. Humla 10. Jumla IL. Kalikot 12, Jajarkot 13. Rolpa 14, East Rukum 15, West Rukum 16, Mustang, 17. Manang, 18, Solukhumbu 19, Khotang 20. Okhaldhunga 21, Taplejung 22. Bhojpur 23. Panchthar b) Undeveloped Area 1, Dadeldhura 2 3. Myagdi 4 5, Parbat 6 7. Salyan 8 9, Baglung 10 Resource Person: * Pramod Lingden, MBS, LLB Pyuthan Dailekh Lamjung Gulmi Gorkha Page 49 of 50ICAN STUDY MATERIAL /CAP-Il, CAP-Ill & MEMBERSHIP/INDUSTRIAL ENTERPRISES ACT, 2076 eS 11, Dolakha 12, Ramechhap 13. Sindhuli 14,Sindhulapchok 15, Rasuwa 16, Difankuta 17. Sankhuwasabha 18, Tethathum (c) Under Developed Area 1. Kanchanpur 2. Kailali 3. Bardia 4, Dang 5. Surkhet 6. Palpa 7. Arghakhachi 8. Syangja 9. Kapilvastu 10. Tanahun o 11.Nuakot 12. Dhading 13.Kavrépalanchok 14. Rautahat 15,Sarlahi 16, Mahottari 17.Siraha 18. Saptari 19.Dolakha 20. Mam SeeReRR eR eeenMeSRa EES Resource Person: CA. Pramod Lingden, MBS, LLB Page 50 of 50