Unit 6: Industrial Enterprises Act, 2073

Corporate Laws (CAP-III) - Industrial Enterprises Act, 2073
Chapter 6
UNIT 6
INDUSTRIAL ENTERPRISES ACT, 2073
Date of Authentication and Publication: 7 Mangsir 2073
ACT NO. 20 OF THE YEAR 2073
WITH
INDUSTRIAL ENTERPRISES REGULATION, 2076

Amended by:
S. No. Act Date

1 Some Nepal Laws Amendment Act, 2075 19 Falgun, 2075
CA Mahesh Gyawali 6.1

Chapter 1:
PRELIMINARY
1.1 PREAMBLE, SHORT TITLE AND COMMENCEMENT (Section 1)
Purpose (Objectives) of the The objective of Industrial Enterprises Act is:

Industrial Enterprises Act, i. To increase national productivity and make job opportunities by fostering industrial
2073 enterprises making the environment of industrial investment more congenial,
straightforward and encouraging.
ii. To make optimum utilization of natural, physical or human resources available in the
country.
iii. To make progressive economy by encouraging more imports and exports through the
increment in the productivity.
iv. To make available effective protection to industries by ensuring that such protection
helps in the appropriate utilization of available resources.
Repeal (Revoke/Cancel) The Industrial Enterprises Act, 2049 is hereby repealed.
2007 July, CAP II Enumerate the objectives of Industrial Enterprise Act, 2049
Dec 2015, Mention objectives of Industrial Enterprises Act, 2049.
CAP II: RTP
Dec 2015, Powers of Government of Nepal as per Industrial Enterprises Act, 2049.
CAP II: RTP
June 2017, CAP III Companies Act, 2063 is in practice to regulate the companies, including incorporation and operation of
the companies. What are the relevancies and objectives of the Industrial Enterprises Act, 2049 in
connection to the governance of the Companies Act, 2063? Explain in brief.
Dec 2018, Enumerate the objective of Industrial Enterprises Act, 2073.
CAP II: RTP
June 2018, Enumerate the objective of Industrial Enterprises Act, 2073.
CAP III: RTP
1.2 DEFINITIONS PROVIDED IN THE INDUSTRIAL ENTERPRISES ACT (Section 2)
In this Act, unless the subject or the context otherwise requires,
S. No. Term Definition

(a) 'Industry' “Industry” means any industry as referred to in Section 15.
(b) 'Body for registration “Body for registration of industries” means the department and it also includes the entity
of industries' notified by Government of Nepal from time to time in official gazette for the purpose of
registering the industries.
Industrial Enterprises Regulation, 2076
 Cottage Industries and Department of cottage and small
 Small Industries industries
 Medium Industries based on national Department of Industries
investment,
 Large Industries based on national
investment and
 Industries based on Foreign Investment
 Industries with national investment Special Economic Zones Authority
established in special economic zones established as per SEZsAct, 2073
(c) 'Office' “Office” means the department of cottage and small industries situated in the district.
(d) 'Cottage Industry' “Cottage Industry” means any industry as referred to in Section 15 (1) (b).
(e) 'Large Industry' “Large Industry” means any industry as referred to in Section 15 (1) (e).
(f) 'Prescribed' or 'As “Prescribed” or “As prescribed” means prescribed or as prescribed in rules made under this
Prescribed' Act or in order issued by GoN by notification published in the Nepal Gazette.
(g) 'Export industry' “Export Industry” means any industry which exports more than 60% of its products.
(h) 'Intellectual Property “Intellectual Property Rights” means any patents, trademarks. Designs, service marks,
Rights' business secrecy, etc. and it also includes copyrights as defined in the prevailing laws.

(i) 'Medium Industry' “Medium Industry” means any industry as referred to in Section 15 (1) (d).
(j) 'Ministry' “Ministry” means Ministry of Industry.
(k) 'NPIs' “National Priority Industry” means any industry as referred to in Section 17.
(l) 'Micro Industry' “Micro Industry” means any industry as referred to in Section 15 (1) (a).
(m) 'Department' “Department” means Department of Industries/Department of Cottage & Small Industries.
(n) 'Board' “Board” means the Industrial Promotion Board constituted under Section 18.
(o) 'Small Industry' “Small Industry” means any industry as referred to in Section 15 (1) (c).
(p) 'Permanent Capital' “Permanent Capital” means the assets referred to in section 16.
2009 June, CAP II Short Notes: Export Promotion Industry.

Dec 2014, Short Notes: Export Promotion Industry
CAP II: RTP

Chapter 2:
PROVISIONS FOR REGISTRATION OF INDUSTRIES
2.1 INDUSTRIES TO BE REGISTERED (Section 3)
Mandatory Registration (1) No person by himself or cause to incorporate or operate any industries without registration
under this act.
Previously registered Notwithstanding anything contained in sub section (1), industries registered under previous
industries no re-register (2) industries enterprises act need not register again under this act.
2.2 APPLICATION FOR REGISTRATION (Section 4)
Application to body for Whoever desires to establish an industry as per this act shall make an application to the body
registration of industries (1) for registration of industries in the prescribed form along with the prescribed documents.
The application shall be accompanied by following documents along with fees:
a) Copy of Citizenship or Passport for foreign nationals,
b) Registration certificate of firm or company,
c) Details of location with map of the place industry is to be set up,
d) Power of attorney of authorized representative if elected for application,
e) Copy of approval of foreign investment, if any,
f) Partnership deed, if industry is to be established under partnership,
g) Recommendation of VDC or municipality in which industry is to be established,
h) Other documents, as prescribed
E-registration (1) Certification of the documents relating to registration by electronic signature shall also be
valid and such documents can also be presented in electronic form.
Micro industries & Cottage Micro industries and cottage industries may apply for registration within 6 months from the
Industries (2) date of operation.
2.3 REGISTRATION CERTIFICATE OF INDUSTRIES (Section 5)
Registration Certificate to be The body for registration of industries, after examination, on being satisfied that all the
provided within 15 days (1) prescribed documents and information have been received and all the procedures for
registration as specified in this act or bye laws under this act have been complied with,
within fifteen days from the date of application for registration, shall register such industry
and issue an industry registration certificate to the applicant as prescribed.
Environment Impact After obtaining the certificate of registration, if it is required to consider effect on
Assessment (EIA) test (2) environment then the applicant needs to conduct Environment Impact Assessment (EIA) test
first before commencement of operations
Extra information to be On examination of application, if the body for registration of industries considers
submitted within 7 days (3) reasonable, it may call for extra information and documents and it shall be the duty of the
concerned applicant to submit them within 7 days.
Contents of Registration The registration certificate shall inter alia contain the following particulars:
Certificate (4)  Date of registration
 Duration within which the industry need to commence its operation or transactions
 Terms and conditions to be fulfilled
 Other conditions, if any as specific for specific type of industries
Grounds of rejection of The body for registration of industries, may reject the application for registration after
application (5) examination, on being satisfied that all the prescribed documents and information have not
been received or all the procedures for registration as specified in this act or bye laws under
this act have not been complied with and information about such rejection shall be provided
to the applicant within seven days.
Responsibility of registered It shall be the duty of Industries registered under this act to follow the terms and conditions
industries (6) specified in the registration certificate as well as the directions issued by the body for
registration of industries form time to time.

Dec 2018, Mr. Rabilal Mathema filed an application to the Department of Industries for the registration of biscuit
CAP III: RTP and chocolate industry on 15th September, 2018. The Department refused to register the industry on 28th
September, 2018 without providing him insufficient grounds for non-registration. He seeks your advice
as to any remedy against the decision of the Department pursuant to the Industrial Enterprises Act, 2073.
2.4 MITIGATION OF NEGATIVE EFFECT ON ENVIREONMENT (Section 6)
Environment pollution control Responsibility of mitigation of negative effect on environment shall be on the industry itself.
Ramesh Kumar Singh Vs. कुनै पनन उद्योग वा व्यावसानयक प्रनिष्ठानले आफ्नो उद्योग कारखाना वा व्यावसानयक प्रनिष्ठान
Ramagya Shah Kalwar सञ्चालन गर्ाा वािावरणमा प्रनिकूल प्रभाव नहुने गरी उद्योग सञ्चालन गनप ुा ने । उद्योग
सञ्चालनबाट वािावरणमा पने प्रनिकूल प्रभाव वा प्रर्ष
ू ण न्यनू गने उपायहरू वास्िववक रुपमा
अवलम्बन गनप
ुा ने र यसरी प्रर्ष
ू ण ननयन्रण वा वािावरणमा पने प्रनिकूल प्रभाव न्यूनीकरणको लागग
उद्योगले अपनाएको पद्धनि वा उपकरणमा लागेको खचामा कर छूट पाउने समेिका व्यवस्था कानन
ू ले
गरेको स्स्थनिमा स्थावपि उद्योगको कारणले उद्योग अवस्स्थि क्षेरमा वािावरण प्रर्ष
ू ण हुन नदर्नु
उद्योगको प्रमख
ु किाव्य िथा र्ानयत्वमा पने ।
Jasmuddin Mansur Vs कुनै पनन उद्योगको स्थापनाबाट वािावरण र आमजनिाको स्वास््यमा र आवासीय क्षेरमा केही न
Ministry of Industries केही अनक
ु ू ल एवं प्रनिकूल प्रभाव पने भए पनन र्े शको आगथाक ववकास एवं आमजनिाको
आवश्यकिाहरू परू ा गने प्रयोजनको लागग सेवामल
ू क उद्योगहरूको योगर्ान र महत्वलाई न्यून
आंकलन गना नसककने । कानूनमा व्यवस्था भएबमोस्जम वािावरणीय पक्ष अध्ययन गरी ियार भएको
प्रनिवेर्न समेिको आधारमा उद्योग सञ्चालनको स्वीकृनि प्रर्ान गररएको र उद्योगले प्रनिकूल प्रभाव
पारेको कुरा वस्िग
ु ि रुपमा पस्ु ष्ट समेि हुन नसकेको अवस्थामा मनोगि कुराको आधारमा मार
वािावरण, आमजनिाको स्वास््य एवं आवासीय क्षेरमा प्रनिकूल प्रभाव परे को र सो कारणले उद्योग
बन्र् गनप
ुा नेसम्मको अवस्था उत्पन्न भएको भनी मान्न नसककने ।
Madhyamanchan Bone उद्योग र्िाा हुुँर्ा पालना गने गरी स्वीकार गरे का सिाहरू उद्योग सञ्चालनका क्रममा परु ा नगरेकोमा
Industries Vs. Ministry of सो सिा परु ा गना पटकपटक उद्योगलाई पराचार गरे को र्े खखयो । उद्योगका िर्ाबाट ललखखिरूपमा
Industries
वािावरण संरक्षण गने भनी भएको सिा सम्झौिा पुरा गने भनी प्रनिबद्धिा जाहेर गरे पनन सो
प्रनिबद्धिा कायाान्वयन भएको भने र्े खखएन । स्वच्छ र स्वास््य वािावरणमा जीवन स्जउने हक
प्रत्येक व्यस्तिको हुन्छ । ननवेर्कको उद्योग खोल्ने, व्यापार व्यवसाय गरी आगथाक उन्ननि गना पाउने
हक ननरपेक्ष होइन । ननजको प्रगनिको मूल्य त्यस क्षेरमा बस्ने सबै जनिाले आफ्नो स्वास््य बबगारी
चक
ु ाउनु पने होइन । ननवेर्कको काम कारवाहीबाट त्यस क्षेरका नागररकहरूको वािावरण प्रर्वु षि गरी
स्वास््य वािावरणको हकबाट वस्ञ्चि गना लमल्र्ै न । त्यसैले स्वास््य वािावरण मानव जीवनको
आधार हो । स्वच्छ वािावरण र मानव स्वास््य भन्ने ववषय अनि संवेर्नशील भएकोले ववकास
कायाको नाममा मानव स्वास््यमा प्रनिकूल असर पने गरी कसैले पनन कुनै उद्योग सञ्चालन गना छुट
नपाउने ।
2.5 PERMISSION (Section 7)
Permission required from Following industries shall have to obtain permission from board before registering the
board before registration (1) industries:
 Industries which
 Produces explosives including arms and ammunitions and gunpowder
 Prints securities, bank notes and mint coins
 Cigarrettes, bidi, cigar, chewing tobacco, khaini industries and industries producing
other goods of similar nature utilizing tobacco as the basic raw material
 Alcohol and beer producing industries
 Industries producing radio communication equipment
 Industries involved in extraction of mineral, petroleum, etc
 Medium and Large Scale Industries involved in extraction and refining of gitti,
dhunga and baluwa.

 Others as may be prescribed

 Industries requiring permissions under Foreign Investment and Technology Transfer
Act
Application to board through Person desires to establish an industry for which a permission is required to be obtained by
body for registration of virtue of sub-section (1) shall, for obtaining permission, be required to make an application
industries (2) to the board in the prescribed form along with the prescribed particulars through the body
for registration of industries.
Body for registration of On examination of application, if the body for registration of industries is satisfied that all
industries to report & the prescribed documents and information have been received or all the procedures for
recommend to board (3) registration as specified in this act or bye laws under this act have been complied with, it
shall forward a report along with its recommendations, if any to the board.
Decision of board within 1 The Board shall make a decision on whether to provide permission or not, to the applicant,
months (4) within one month of application.
Permission to be granted The body for registration of industries shall, within fifteen days of receipt of information
within 15 days (5) about granting of permission by the board issue a permission letter in the prescribed format.
Application for registration (6) Application for registration of industries shall be made within the time specified in the
permission letter.
Rejection of permission to be If the Board decides not to grant permission as per the decision under sub section (4), the
informed within 7 days (7) body for registration of industries shall inform about such rejection within seven days.
June 2004, CAP III Name the type of industries for the establishment for which permission is to require to be obtained from
the department, under the Industrial Enterprises Act, 1992.
2008 June, CAP II What are the Industries that require permission to set up the Industrial Enterprise Act, 2049?
2008 Dec, CAP II Ram Bahadur wants to set up an industry. Suggest all the legal steps that Ram Bahadur has to fulfill in
order to set up an industry under Industrial Enterprise Act, 1992.
June 2010, CAP III Mr. Ghimire intends to set up a niche alcohol factory in Jumla, a remote area as per annex 3 to the
Industrial Enterprise Act, due to availability of various wild fruits. Advice, whether permission would be
necessary clearly stating the provisions regarding permission in the industrial enterprises act 2049 and
its annexes.
Dec 2012, CAP III Chewang Lama wants to establish a pashmina industry at Bargaun. It is the industry which is mentioned
in annex 1 and not required permission to establish as per the Industrial Enterprise Act. Though Mr.
Chewang is still interested whether this pashima industry should be registered in the Department of
Cottage and Small Industries under this Act?
June 2013, CAP III A group of Nepalese nationals are willing to establish a medium-scale industry. They want to know your
expert opinion as regards to this matter. Now answer the following questions the group has set for you
to respond in the light of the Industrial Enterprises Act, 2049:-
i. Whether they have to apply for seeking an industrial permission to establish an industry?
ii. If yes, how and where it has to apply?
iii. In case such an industry got permission and it has to get registered, how such registration can be
made?
iv. In case no industrial permission is required, how registration of that industry shall be made?
v. What matters an industrial license (permission) or an industrial registration certificate shall
contain?
2014 June, CAP II Khujeli Tea Estate of Fikkal is producing tea leaves in a small scale since May 12, 2013, however the
estate was producing tea leaves without getting the permission from the concerned offices of the
Government of Nepal. As a result, the government of Nepal is investigating and planning to impose
action against this tea estate. Elaborate the possible action that the Authorities can take against the tea
estate considering the legal provisions of the Industrial Enterprises Act, 2049.
Dec 2014, Rabi Sivakoti wants to establish a herbal plant industry at Surkhet. It is the industry which is mentioned
CAP III: RTP in annex 1 and not required permission to establish as per the Industrial Enterprise Act 2049. If Mr.
Shrestha is still interested to register, whether this herbal plant industry should be registered in the
Department of Cottage and Small Industries under this Act?
Dec 2015, CAP III Sunsari Tobacco Industry willing to diversify itself has applied to Department of Industry for its
permission. Identify the types of industries which shall be required to obtain permission for
diversification under the Industrial Enterprises Act, 2049?
June 2016, CAP III Some industries need license and should also be registered with the Department of Industries. Some
other industries do not need license. Do the later types of industries need to get registered with the
Department of Industries? If yes, how to get them registered?

June 2017, Ramesh Maskey wants to establish a pashmina industry at Bargaun. It is the industry which is mentioned
CAP III: RTP in annex 1 and not required permission to establish as per the Industrial Enterprise Act. Though Ramesh
Maskey is still interested whether this pashima industry should be registered in the Department of
Cottage and Small Industries under this Act?
June 2019, CAP Chameli Tea Estate of Fikkal is producing tea leaves in a small scale since May 12, 2016. However, the
III: RTP estate was producing tea leaves without getting the permission from the concerned offices of the
Government of Nepal. As a result, the government of Nepal is investigating and planning to impose
action against this tea estate. Elaborate the possible action that the Authorities can take against the tea
estate considering the legal provisions of the Industrial laws.
2.6 INFORMATION ABOUT COMMERCIAL PRODUCTION OR COMMENCEMENT OF TRANSACTIONS

(Section 8)
Commercial production or Every industry registered under this act, shall start its commercial production, operation and
commencement of transactions commence its transactions within the date as specified in certificate of registration and
to be started within time information of such commencement shall be provided to the body for registration of
specified in RC (1) industries.
Apply for extension of time If any industry is not able to start its commercial production, operation and commence its
period (2) transactions, then it shall inform about its inability, with reasons, within six months of
expiry of time specified in the registration certificate, to the body for registration of
industries and apply for extension of time period.
Extension to be provided by On receipt of application for extension as per sub section (2), and if it is satisfied that the
body for registration of reasons specified in the application are satisfactory, the body for registration of industries
industries (3) may grant the extension of time period as prescribed by taking prescribed fines.
Start within extended date (4) The concerned industry shall start its commercial production, operation and commence its
transactions within the extended date as per sub section (3).
Cancellation of registration if If any industry did not apply for extension of time period as per sub section (2), or is not
unable to commence (5) able to start its commercial production, operation and commence its transactions even within
the extended date as per sub section (3), then the registration certificate of the concerned
industry shall ipso facto be cancelled.
Update the RC & register (6) On cancellation of registration as per sub section (5), the body for registration of industries
shall record the reasons of such cancellation in the registration certificate of the concerned
industry available in its records and shall also update its register.
2.7 APPEAL (Section 9)
Appeal to Ministry within 30 If the body for registration of industries rejects the registration under section 5 (5) any
days (1) person not satisfied with the decision may appeal to the ministry within thirty days of receipt
of information about rejection.
Ministry to decide within 30 On receipt of application of appeal, after examination, the Ministry shall decide on the
days (2) matter within thirty days of receipt of application.
June 2005, CAP III Generally, there is no need of a license for setting up an industry excepting specified industries.
Accordingly, an application for establishing an industry, not belonging to specified categories, was
made on June 29, 2004 but up to the end of July 2004 no reply was received from the competent
authority. What is the remedy available to the applicant?
Dec 2006, CAP III A group of people agreed to establish an industry relating to construction of flyover bridge. Accordingly,
an application was made on 1st of September 2006 but till the end of October 2006, no reply was
received from the concerned authority. What is the remedy available to the applicant? Briefly explain
with reference to the provisions of Industrial Enterprises Act 2049.
2.8 INSPECTION AND SUPERVISION (Section 10)
Inspection of industry (1) The body for registration of industries or Office may, from time to time, inspect whether the
conditions specified in the certificate of registration are complied with or not.
Information to be asked during The body for registration of industries or Office may, ask for information or documents
inspection (2) during such inspection.

Duty of industry to coordinate It shall be the duty of the concerned industry to provide the information or documents asked
during inspection (3) for during such inspection
Assistance for such industry On receipt of information or documents as per sub section (3), if the body for registration of
(4) industries or Office finds that there occurs some type of problems in the operation of such
industry, it may provide necessary assistance to such industry.
2.9 RELOCATION OF INDUSTRIES (Section 11)
Apply for relocation (1) Any industry registered and in operation in one area, if desires itself to be relocated to
another area for any reason, shall make an application with reasons to the body for
registration of industries.
The application for relocation shall be accompanied by following documents along with
fees:
a) Tax clearance certificate of previous year,
b) Audit report of previous year,
c) Recommendation of VDC or municipality in which industry is to be relocated,
d) IEE Report,
e) If any facilities, concessions or rebates are availed, copy of recommendation from
the authorities granting such facilities, concessions or rebates,
f) Details of project.
Permission after IEE (2) On receipt of application as per sub section (1), after considering the effect on environment
(IEE-Initial Environment Examination), the body for registration of industries may permit
the relocation.
2.10 RETURNS TO BE SUBMITTED (Section 12)
Submit returns within 6 Every industry after commencement of its commercial production, operation or after
months of end of FY (1) commencement of its transactions submit the prescribed information and documents to the
body for registration of industries within six months of end of every financial year.
The prescribed information and documents shall be as follows:
a) Tax clearance certificate of previous year,
b) Audit report of previous year,
c) Approved and installed load (Capacity),
d) Others.
Electronic form permitted (2) These information and documents as per sub section (1) may be sent in electronic form also.
2.11 INFORMATION ON CLOSURE OF INDUSTRIES (Section 13)
Inform within 7 days If any industry is to be closed due to some reasons or operation and transactions is halted for
some time, then information about such closure or halt must be provided to the body for
registration of industries within seven days of such closure or halt in the prescribed format.
2.12 APPLICATION FOR CANCELLATION OF REGISTRATION OF INDUSTRIES (Section 14)
Apply for cancellation if If any industry, due to some reasons is unable to carry on, then it shall apply to the body for
reasons persists (1) registration of industries for cancellation of registration with prescribed documents and in
the prescribed format.
The application for cancellation of registration shall be accompanied by following
documents:
a) Assets Valuation report prepared by a licensed valuator (However, in case of
industry with fixed assets up-to one crore, a report prepared by the industry itself
shall be accepted.),

b) Documents proving of settlement of all the liabilities pending relating to workmen

engaged in the industry,
c) Documents proving settlement of all other liabilities,
d) Report of liquidator, if any,
e) Audit report of previous year,
f) Original registration certificate,
g) Self-declaration that no claims are pending in the court (if any such claims pending,
documents proving deposit of security up-to the amount of dispute).
On receipt of such application, the body for registration of industries shall order the
concerned industry to publish a public notice in national daily newspaper to make claims
pending if any within 35 days.
Cancellation only after all On receipt of application for cancellation of registration as per sub section (1), the body for
liabilities are settled (2) registration of industries after confirming that all the liabilities of such industry are settled
and if it deems fit, shall cancel the registration and notify the applicant.

Chapter 3:
CLASSIFICATION OF INDUSTRIES AND PERMANENT
CAPITAL
3.1 CLASSIFICATION OF INDUSTRIES (Section 15)
For the purpose of this Act, industries are classified as follows (1)
(a) Micro Industries  Maximum Rs. 5 Lakhs fixed assets investments (except land and building)
 Entrepreneur self-involved in management
 Maximum 9 employees including entrepreneur
 Yearly transaction less than 50 lakhs
 If such industry has used engines, equipment’s or machines then energy used in such
devices in the form of electricity or diesel or petrol or other crude oils shall not exceed 20
Kilo watt.
However, Industries specified under section 7 i.e. industries requiring permission before
registration shall never be micro industries.
(b) Cottage Industries 1) The traditional industries utilizing specific skill or local raw materials and resources, and
labor intensive and related with national tradition, art and culture
2) If such industry has used engines, equipment’s or machines then energy used in such
devices in the form of electricity or diesel or petrol or other crude oils shall not exceed 10
Kilo watt.
3) Industries specified in Annexure 2:
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 k/Dk/fut d"lt{snf,
 tfdf, lkQn, 9nf}6, sfF; / hd{g l;Ne/ h:tf wft'af6 x:tlgld{t efF8fjt{g tyf
x:tsnfsf ;fdfg,
 kmnfdaf6 ag]sf x:tlgld{t efF8f jt{g tyf 3/fo;L k|of]usf rSs', r'n];L, v's'/L, xFl;of,
s'6f], sf]bfnf] h:tf k/Dk/fut cf}hf/x?,
 ;'g rfFbLaf6 x:tlgld{t u/uxgf, j:t', efF8f jt{gx? ax'd"No, cw{–ax'd"No tyf ;fwf/0f
kTy/ h8fg ePsf ;d]t_,
 :jb]zdf pknAw lsdlt, cw{ lsdlt tyf ;fwf/0f kTy/ s6fO{ pBf]u, u|fdL0f
6\oflgË÷5fnfaf6 x:t lgld{t j:t'x?,
 h'6, ;jfO 3fF;, rf]of, aflaof], ;'tL wfu]f, cNnf] cflb k|fs[lts /]zfdf cfwfl/t pBf] u,
 kTy/snf -9'+uf s'+bL agfOPsf ;fdfgx?_,
 kf}ef, yfÍf lrq / cGo k/Dk/fut lrqsnf,
 d's'08f] -df:s_ tyf k/Dk/fut ;+:s[lt bzf{pg] k'tnL / v]nf}gf,
 k/Dk/fut ;+:s[lt, afhfufhf / snf bzf{pg] ljleGg k|sf/sf x:tsnfsf j:t',
 sf7, xf8, l;Ë tyf df6f], r§fg / vgLhsf snfTds j:t'x?, ;]/fldS; tyf df6fsf
efF8fs'F8f,
 xftn] 5fKg] O{6f pBf]u .
(c) Small Industries Permanent Capital: Up to 10 Crores (Except Micro and cottage Industries)
(d) Medium Industries Permanent Capital: 10 - 25 Crores
(e) Large Industries Permanent Capital: Above 25 Crores
On the basis of products and types of services above industries are classified as follows (2)
(a) Energy Based Industries Industries generating energy from water resources, wind, solar, coal, natural oil, gas, bio-gas
or any other sources.
(b) Manufacturing Industries Industries which produce goods by utilizing or processing raw materials, semi-processed
materials, by products or waste products or any other goods.

(c) Agro and Forestry Based Business mainly based on agriculture or forest products such as integrated sericulture and
Industries silk production, horticulture and fruit processing, animal husbandry, dairy industry, poultry
farming, fishery, tea gardening and processing, vegetable seed farming, mushroom,
vegetable farming or vegetable processing, tissue culture, green house, bee-keeping, honey
production, rubber farming, floriculture and production, and forestry related business such
as leasehold forests, agro-forestry, etc.
(d) Mineral Industries Mineral excavation or processing thereof.
(e) Construction Industries Road, bridge, ropeway, railway, trolley bus, tunnel, flying bridge and industrial, commercial
and residential complex construction and operation.
(f) Tourism Industries Tourist lodging, motel, hotel, restaurant, resort, travel agency, skiing, gliding, water rafting,
cable car complex, pony-trekking, hot air ballooning, Para sailing, golf-course, polo, horse-
riding, etc.
(g) IT & communication Industries providing facilities of Information and communication technology by Information
technology Industries collection, processing and transmission; like IT Parks, Software development, Cyber Cafes,
Internet, Telephone, Mobile, Broadband, F.M. television, Cable TV, Studios, Print media,
Multiplexes, etc. and others as specified in Annexure 7 of the Act.
(h) Service Industries Workshop, printing press, consultancy service, ginning and bailing business,
cinematography, construction business, public transportation business, photography,
hospital, nursing home, educational and training institution, laboratory, air services, cold
storage etc.
Application for change in the Any industry desirous to change or alter or amend the permanent capital shall apply to the
permanent capital (3) body for registration of industries.
The application for amendment of permanent capital shall be accompanied by following
documents along with fees:
a) Copy of registration certificate, memorandum of association and articles of
association if such industry is a company or copy of partnership deed if such
industry is a partnership firm,
b) Tax clearance certificate of previous year,
c) Audit report of previous year,
d) Updated details of industry,
e) Recommendations of any concerned departments, if required.
Body for registration of On receipt of application as per sub section (3), the body for registration of industries may
industries to change (4) change or alter or amend the permanent capital of such industry.
Re-classification (5) After the change or alter or amend in the permanent capital of any industry, the industry
shall be reclassified as per sub section (1).
2006 Dec, CAP II Mention the types of industries (in terms of product) classified under the Industrial Enterprise Act, 2049.
2007 Dec, CAP II Enumerate the classification of industries based on function and fixed capital investment under the
Industrial Enterprise Act, 1992.
2008 Dec, CAP II Short Notes : Cottage Industries
Dec 2010, CAP III Write short notes on: micro enterprises
June 2011, CAP III Classify the Industries (give classified names only) according to nature and size. What is the ground to
classify the industries according the size?
2012 June, CAP II What is cottage industry? What are covered by cottage Industry? Discuss referring the Industrial
Enterprise Act, 2049?
June 2017, What are the classifications of Industry? What are the types of Industries as per Nature as defined by
CAP II: RTP Industrial Enterprises Act, 2073?
2017 June, CAP II Mention the classifications of Industries under section 3 of The Industrial Enterprises Act, 2049?
Dec 2018, Mention classifications of Industry. Mention types of Industries as per Nature as defined by Industrial
CAP II: RTP Enterprises Act, 2073?
2018 Dec, CAP II Write short notes on: “Cottage Industry” as per Industrial Act, 2073.
Dec 2018, What do you mean by Micro Enterprises? State the additional facilities and concessions provided to
CAP III: RTP such industries pursuant to the Industrial Enterprises Act, 2073
Dec 2018, CAP III Discuss the provisions regarding classification of industries on the basis of size of fixed asset investment
and nature/ sector of business as prescribed by the Industrial Enterprises Act 2073, and its objective.
June 2019, Mention the Classification of Industries.
CAP II: RTP
June 2019, Classify Industry based on their nature.

CAP II: RTP

Dec 2019, What are the conditions required to be fulfilled to become micro industries?
CAP II: RTP
3.2 PERMANENT CAPITAL OF INDUSTRIES (Section 16)
Fixed Assets of an industry The fixed asset of an industry shall consist of the following movable and immovable assets:-
consists of (1) a) Land and land improvement (works such as land leveling, filling and fencing),
b) Physical infrastructures (such as sewerage, internal road),
c) Office, factory building, go-down, electric distribution, water distribution system and
residential buildings,
d) Machinery, equipment and tools,
e) Means of transportation,
f) Electrical equipment and office equipment,
g) Furniture, fixture, communication system and equipment.
Capitalized Expenditure also In addition to the assets referred to in sub-section (1) above, expenses incurred or to be
to be considered as Fixed incurred in connection with technical consultancy and super vision prior to the making of
Assets (2) investment in any industry or during different stages of construction and which is to be
capitalized, pre-investment and pre-operation costs as well as the amount of interest during
the construction period, which is to be capitalized, shall be considered as the fixed assets of
any industry.
2010 Dec, CAP II Enumerate the classification of industries as per the Industrial Enterprises Act,2049.
2012 Dec, CAP II Short Notes: Categories of industries.
3.3 NATIONAL PRIORITY INDUSTRIES (Section 17)
As per Annexure-9 1) Energy based Industries

2) Agro and Forestry-based industries.
3) Construction based Industries
4) Export Industries
5) Tourism Industries
6) Industries related to Mineral, petroleum and natural gas extraction and production
7) Industries producing clinkers and cement using domestic raw materials, Pulp and
paper, sugar, fertilizers, powder milk, medicines, etc.
8) Engineering Industry (Producing Agricultural and Industrial Machine).
9) Industry Manufacturing Fuel Saving or Pollution Control Devices.
10) Solid Water Processing Industry.
11) Road, Bridge, Tunnel, Ropeway and Flying Bridge Constructing and Operating
Industry and Trolley Bus and Train Manufacturing and Operation Industry.
12) Hospital (Human and animals) and Nursing Home (Only outside the Kathmandu
Valley).
13) Medical research industries
14) Industries producing vehicles operating from electricity
15) Cottage Industries.
Dec 2008, CAP III What do you understand by Industries of National Priority under the Industrial Enterprises Act?
Dec 2015, Mention National Priority Industry as per Industrial Enterprises Act, 2049.
CAP II: RTP
June 2017, Mention the National Priority Industry?
CAP II: RTP
Dec 2017, Mention the National Priority Industry?
CAP II: RTP
June 2019, Explain National Priority Industries under Industrial Enterprises Act, 2073.
CAP III: RTP

Chapter 4:
PROVISIONS RELATING TO INDUSTRIAL INVESTMENT
PROMOTION BOARD
4.1 FORMATION OF THE INDUSTRIAL PROMOTION BOARD (Section 18)
To make decisions on policies Numbers & Position Person

regarding promotion and 1 Chairman The Minister or State Minister for Industries
incorporation of industries, 1 Member The State Minister for Industries (In the case when the chairman
encouragement of investments, is the Minister)
protection and extension of 1 Member The Assistant Minister for Industries
industries and to foster the 1 Member Member (looking after industries), National Planning
pace of industrialization, an commission
industrial promotion board 1 Member The Governor, Nepal Rastra Bank
shall be constituted with 1 Member The Secretary, Ministry of Industry
following members (1) 1 Member The Secretary, Ministry of Finance
1 Member The Secretary, Ministry of Labor and employment
1 Member The Secretary, Ministry of commerce
1 Member The Secretary, Ministry of Agricultural Development
1 Member The Secretary, Ministry of Information and communication
1 Member The Secretary, Ministry of Energy
1 Member The Secretary, Ministry of Forest and Soil Conservation
1 Member The Secretary, Ministry of Culture Tourism and civil aviation
1 Member Chief Executive Officer, Office of the Investment Board
1 Member The Director General, Department of Cottage and Small
Industries
1 Member Joint-Secretary, Industrial Promotion Department (Mahasakha)
1 Member President, Federation of Nepal Chamber of Commerce and
Industry (Mahasangh)
1 Member President, Confederation of Nepalese Industries (Parisang)
1 Member President, Federation of Nepal Cottage and Small Industries
(Mahasangh)
1 Member President, Federation of Women Entrepreneurs Association
2 Members Two persons nominated by Government of Nepal, from experts
among industry sector (One must be Female)
1 Member - Secretary The Director General, Depart of Industries
Observers, if any in meetings The Board may, if it deems necessary, invite any secretary of Government of Nepal related
(2) to the field or any officer employee or any national or foreign expert or consultant at any
meeting of the Board to participate therein as an observer.
Secretariat (3) Secretariat of board shall be located in Department of Industries.
Meetings of board (4) The procedures relating to the meetings of the Board shall be as determined by the Board.
Report on monthly basis (5) The secretariat shall, on monthly basis, present its report on the decisions made and works
performed, to the chairman of the board.
4.2 FUNCTIONS, DUTIES AND POWERS OF THE BOARD (Section 19)
Functions, Duties and Power of 1. To render necessary cooperation in formulating and implementing policies, laws and
the Board: regulations pertain to the industrialization of the country.
1. Policy formulation 2. To give guidelines in attaining the objectives of liberal, open and competitive
2. Guidelines economic policies pursued by the country so as to make the industrial sector
3. Coordination competitive.
4. Prevent environment 3. To maintain coordination between the policy level and the implementation level of the
pollution industrial policy.
5. Recommend GoN 4. To cause to follow the ways and means for the prevention of the environmental
6. Give directions pollution by putting more emphasis on the avoidance of effects on the environment and
the public health.

5. To make recommendation to Government of Nepal for the inclusion of any industry in

the classification of industries.
6. To make recommendation to Government of Nepal to introduce changes in the Areas
by making evaluation thereof from time to time.
7. To give directives to the concerned body after making enquiries into the application
submitted by any industry complaining that the industry has not received the facilities
and concessions to be made available by the committee.
8. Other functions, duties and power of the board shall be as prescribed.
2004 June, CAP II Short Notes : Industrial Promotion Board

2005 Dec, CAP II Short Notes : Industrial Promotion Board
2006 June, CAP II What are the powers of Industrial Promotion Board guaranteed by the Industrial Enterprise Act, 1992?
June 2009, CAP III Mention the functions duties and powers of industrial promotion board.
June 2010, CAP III Write short notes on: Industrial Promotion Board
2010 Dec, CAP II Describe the functions. Duties and power of the Industrial Promotion Board.
2011 Dec, CAP II Constitution of Industrial Promotion Board.
Dec 2011, CAP III Write short notes on: Industrial Promotion Board.
2012 Dec, CAP II Explain the Functions, Duties and Power of the Industrial Promotion Board.
2013 Dec, CAP II Discuss the rights and powers of industrial Promotional Board.
2014 Dec, CAP II Enumerate the functions, duties and power of the Industrial Promotion Board as provided by the
Dec 2014, Write short notes on: Industrial Promotion Board
CAP III: RTP
2015 Dec, CAP II What are the functions, duties and power of Industrial Promotion Board under the Industrial Enterprises
Act 2049? Discuss.
June 2017, Discuss how Industrial Promotion Board is constituted under the Industrial Enterprises Act 2049. Write
CAP III: RTP its functions, duties and power of the Board.
2017 Dec, CAP II Discuss the functions, duties and power of Industrial Promotion Board specified under the Industrial
Enterprises Act, 2073.
June 2018, What are the functions, duties and powers of Industrial Promotion Board as per Industrial Enterprises
CAP II: RTP Act, 2073?
June 2018, Explain the functions, duties and power of Industry and Investment Promotion Board under Industrial
CAP III: RTP Enterprises Act, 2073.
Dec 2018, Explain the functions, duties and power of Industry and Investment Promotion Board under Industrial
CAP II: RTP Enterprises Act, 2073.
4.3 MEMBER OF THE BOARD NOT TO TAKE PART IN DECISION MAKING (Section 20)
Interested member not allowed For any agenda that is presented in the board meeting for decisions, the board member with
to vote in board's meetings (1) personal concern or interest is restricted in taking part in decision making in such particular
subject.
Inform to board (2) If any circumstances arise as per sub section (1), the concerned member shall inform the
board through the member-secretary.
Void if contravened (3) Any decisions taken in violation of sub section (1) shall ipso facto be void.
4.4 SECRECY (Section 21)
Maintain confidentiality (1) No person shall himself or cause to supply or disclose any confidential information or
notice obtained in the course of performing the duties of office to another person in
unauthorized manner or use such information or notice for benefits of any person.
Violation of code of conduct (2) If chairperson, members, member-secretary or any person invited in meetings or employees
performs the acts specified in sub section (1), he shall be deemed to have acted against
professional code of conduct and official responsibility

Chapter 5:
CONCESSIONS, FACILITIES AND EXEMPTIONS AVAILABLE
TO INDUSTRIES
5.1 FACILITIES AND CONCESSIONS AVAILABLE TO INDUSTRIES (Section 22 - 26)
Section No. Particulars Available facilities, concessions and exemptions

22 Facilities and concessions available to To be read in relevant provisions of the Income Tax Act of Nepal.
industries related to income tax
cfos/ ;DaGwL 5'6, ;'ljwf jf ;x'lnot M
-!_ o; P]g cGt{ut btf{ ePsf] pBf]unfO{ b]xfo adf]lhdsf] cfos/ 5'6, ;'ljwf jf ;x'lnot k|bfg ul/g]5 M–
-s_ pTkfbgd"ns pBf]uaf6 cflh{t cfodf nfUg] s/sf] b/df aL; k|ltztn] 5'6 x'g]5 .
-v_ ;8s, k'n, ;'?Ë, /f]kj], /]Nj], 6«fd, 6«nLa;, ljdfg:yn, cf}Bf]lus ;+/rgf Pj+ k"jf{wf/ sDKn]S; h:tf lgdf{0fd"ns pBf]udf nufgL u/L
;~rfng u/]df ;f]af6 k|fKt cfodf nfUg] s/sf] b/df rfnL; k|ltztn] 5'6 x'g]5 .
-u_ cg';"rL–!) df plNnlvt clt cljsl;t, cljsl;t / sd ljsl;t If]qdf :yflkt kmnk"mndf cfwfl/t a|f08L, ;fO8/ Pj+ jfOg pTkfbg
ug]{ pBf]u afx]ssf pTkfbgd"ns pBf]un] Jofj;flos pTkfbg jf sf/f]af/ z'? u/]sf] ldltn] bz jif{;Dd k|rlnt sfg"g adf]lhd nfUg]
cfos/sf] b/df qmdzM gAa], c;L / ;Q/L k|ltzt 5'6 kfpg]5 .
t/ clt cljsl;t If]qdf :yflkt kmnk"mndf cfwfl/t a|f08L, ;fO8/ Pj+ jfOg pTkfbg ug]{ pBf]unfO{ sf/f]af/ ;'? u/]sf] ldltn] bz jif{;Dd
rfnL; k|ltzt cfos/ 5'6 x'g]5 .
-3_ Ps ca{eGbf a9Lsf] k"FhL nufgLdf :yfkgf x'g] / kf‘r ;oeGbf a9LnfO{ jif{el/ g} k|ToIf /f]huf/L k|bfg ug]{ pTkfbgd"ns pBf]unfO{
sf/f]af/ z'? u/]sf] ldltn] kfFr jif{;Dd k"0f{ ?kdf cfos/ 5'6 lbO{ To;kl5sf] tLg jif{;Dd nfUg] s/sf] krf; k|ltzt cfos/ 5'6 x'g]5 .
t/ xfn ;~rfngdf /x]sf o:tf pBf]un] sDtLdf kRrL; k|ltzt hl8t Ifdtf a[l4 u/L Ps ca{ k"FhL k'¥ofO{ kfFr ;oeGbf a9LnfO{ jif{el/ g}
k|ToIf /f]huf/L k|bfg u/]df To;/L Ifdtf a[l4af6 k|fKt ePsf] cfodf kfFr jif{;Dd k"0f{ ?kdf cfos/ 5'6 lbO{ To;kl5sf] tLg jif{;Dd nfUg]
s/sf] krf; k|ltzt cfos/ 5'6 x'g]5 .
-ª_ ;Djt\ @)*) ;fn r}q dlxgf;Dd hnljB'tsf] Jofkfl/s ?kdf pTkfbg, k|;f/0f jf ljt/0f ;'? ug]{ cg'dlt k|fKt JolQm jf lgsfon]
klxnf] bz jif{;Dd k"/} cfos/ 5'6 kfpg] 5 / To;kl5sf] kfF+r jif{;Dd krf; k|ltzt cfos/ 5'6 kfpg]5 . o:tf] ;'ljwf ;f}o{, jfo' tyf
h}ljs kbfy{af6 pTkfbg x'g] ljB'tn] ;d]t kfpg]5 .
t/ of] P]g k|f/De x'Fbfsf avt Jofkfl/s pTkfbg k|f/De ul/;s]sf cg'dltkq k|fKt JolQmsf] xsdf cg'dltkq k|fKt ubf{sf jvtsf] Joj:yf
nfu" x'g]5 .
-r_ k]6«f]lnod tyf k|fs[lts Uof; tyf OGwg cGj]if0f tyf pTvgg\ ug]{ sf/f]af/ ug]{ JolQmn] @)&% ;fn r}q dlxgf;Dd Jofkfl/s ?kdf
sf/f]af/ ;~rfng u/]df sf/f]af/ ;~rfng u/]sf] ldltn] klxnf] ;ft jif{;Dd k"/} cfos/ 5'6 kfpg]5 / To;kl5sf] tLg jif{;Dd krf;
k|ltzt cfos/ 5'6 kfpg]5 .
-5_ b'O{ ca{eGbf a9Lsf] k"FhL nufgLdf :yfkgf x'g] ko{6g If]q;Fu ;DalGwt pBf]unfO{ / kfFr s/f]8 eGbf a9Lsf] k"FhL nufgLdf
dxfgu/kflnsf / pkdxfgu/kflnsf afx]ssf If]qdf :yfkgf x'g] k"jf{wf/o'Qm xf]6n, l/;f]6{ h:tf ko{6g If]q;Fu ;DalGwt pBf]unfO{ sf/f]af/
z'? u/]sf] ldltn] kfFr jif{;Dd k"0f{ ?kdf cfos/ 5'6 eO{ To;kl5sf] tLg jif{;Dd nfUg] cfos/sf] b/df krf; k|ltzt 5'6 x'g]5 .
t/ xfn ;~rfngdf /x]sf To:tf pBf]un] xfnsf] hl8t Ifdtfsf] sDtLdf kRrL; k|ltzt Ifdtf a[l4 u/L b'O{ ca{ k"FhL k'¥ofPdf To;/L
Ifdtf a[l4af6 k|fKt ePsf] cfodf kfFr jif{;Dd k"0f{ ?kdf cfos/ 5'6 / To;kl5sf] tLg jif{;Dd nfUg] cfo s/sf] b/df krf; k|ltzt 5' 6
x'g]5 .
-h_ g]kfn ;/sf/n] g]kfn /fhkqdf ;"rgf k|sfzg u/L tf]s]sf] 6]Sgf]nf]hL kfs{, afof]6]s kfs{ / ;"rgf k|ljlw kfs{leq :yflkt ;ˆ6j]o/
ljsf;, tYofÍ k|zf]wg, ;fOa/ Sofk]m, l8lh6n DoflkË ;DaGwL pBf]usf] cfodf nfUg] s/sf] krf; k|ltzt 5'6 kfpg]5 .
-em_ b]xfosf ;+Vofdf g]kfnL gful/snfO{ /f]huf/L lbg] b]xfosf pBf]unfO{ b]xfo adf]lhdsf] 5'6 ;'ljwf k|bfg ul/g]5 M–
-!_ tLg ;o jf ;f]eGbf a9L g]kfnL gful/snfO{ jif{el/ g} k|ToIf /f]huf/L lbg] pTkfbgd"ns pBf]u, ;"rgf tyf ;~rf/ k|ljlw pBf]unfO{ ;f]
jif{sf] cfodf nfUg] s/sf] kGw| k|ltzt,
-@_ afx| ;o jf ;f]eGbf a9L g]kfnL gful/snfO{ jif{el/ g} k|ToIf /f]huf/L lbg] pTkfbgd"ns pBf]u Pj+ ;"rgf tyf ;~rf/ k|ljlw pBf]unfO{
;f] jif{sf] cfodf nfUg] s/sf] kRrL; k|ltzt,
-#_ pkv08 -!_ jf -@_ adf]lhd /f]huf/Lk|fKt g]kfnL gful/sx?dWo] sDtLdf krf; k|ltzt dlxnf, blnt jf ckfËtf ePsf JolQmx? /x]df
To:tf] pBf]unfO{ ;f] jif{sf] cfodf nfUg] s/df yk kGw| k|ltzt .
-`_ pTkfbgd"ns pBf]un] pTkfbg u/]sf] j:t' lgof{t u/]df k|fKt cfodf nfUg] s/sf] b/df kRrL; k|ltztn] 5'6 x'g]5 .
-6_ pBf]un] cfˆgf >lds tyf sd{rf/Lsf] bL3{sfnLg lxt jf sNof0fsf/L sfo{x?, h:t}M cfjf; Joj:yf, hLjg aLdf, :jf:Yo ;'ljwf, lzIff
tyf tflnd, lzz' :ofxf/ s]Gb| / zf/Ll/s tGb'?:tLsf nflu v]ns'b tyf Jofofddf u/]sf] vr{ cfos/ k|of]hgsf] nflu s§L ug{ kfpg]5 .
-7_ k|b"if0f /f]syfd tyf lgoGq0f ug]{ jf v]/ uPsf j:t'sf] k'gMk|zf]wg jf k'gMk|of]u ;d]t u/L jftfj/0fdf Go"gtd c;/ kfg]{ k4lt tyf
pks/0fdf ePsf] vr{dWo] Joj;fosf] ;dfof]lht s/of]Uo cfosf] krf; k|ltzt;Dd ;f]xL jif{ vr{ s§L ug{ kfpg]5 . Joj;fosf] ;dfof]lht
s/of]Uo cfosf] ;LdfeGbf clws vr{nfO{ cfufdL cfo jif{sf] z'?df k"FhLs/0f u/L x|f; s§L ug{ ;Sg]5 .
-8_ phf{ bIftf clej[l4 u/L pmhf{ vkt 36fpg ;3fp k'¥ofpg] oGq jf pks/0fdf nufgL u/]sf] ;Dk"0f{ vr{ cfos/ k|of]hgsf] nflu s§f

ug{ kfpg]5 .
-9_ pBf]usf] pTkfbsTj clej[l4sf] nflu pBdzLntf clej[l4, cg';Gwfg tyf ljsf; / gofF k|ljlw l;h{gf ug{ nfu]sf] vr{dWo] ;f] JolQmaf6
;~rflnt ;a} Joj;fosf] ;dfof]lht s/of]Uo cfosf] krf; k|ltzt;Dd vr{ s§L ug{ ;Sg]5 . ;dfof]lht s/of]Uo cfosf] ;LdfeGbf clws
vr{nfO{ cfufdL cfo jif{sf] z'?df k"FhLs/0f u/L x|f; s§L ug{ ;Sg]5 .
-0f_ pBf]un] Joj;fo;F+u ;DalGwt ahf/ k|j4{g, ;j]{If0f / lj1fkgsf] nflu ePsf] vr{ cfos/sf] k|of]hgsf] nflu s§L ug{ ;Sg]5 .
-t_ pBf]usf] ef}lts ;DklQsf] ;'/Iff ug{ pBf]un] tf]lsP adf]lhdsf] vr{ / o;sf] aLdf afkt v"b e'QmfgL ePsf] lk|ldod afktsf] vr{
cfos/sf] k|of]hgsf] nflu s§L ug{ ;Sg]5 .
-y_ pBf]un] g]kfndf btf{ ePsf] af}l4s ;DklQ cGtu{tsf] cf}Bf]lus ;DklQsf] :jb]zdf ;+/If0f ubf{ nfu]sf] vr{ cfos/ k|of]hgsf] nflu s§L
ug{ kfpg]5 .
-b_ s'g} pBf]un] g]kfndf l;h{gf e} btf{ ePsf] af}l4s ;DklQsf] lgof{taf6 k|fKt x'g] /f]oN6L cfodf nfUg] cfos/sf] b/df kRrL; k|l tztn]
5'6 kfpg]5 .
-w_ s'g} pBf]un] cfkm"n] l;h{gf u/]sf] af}l4s ;DklQsf] x:tfGt/0f jf laqmL u/L k|fKt u/]sf] cfodf nfUg] cfos/sf] b/df krf; k|ltztn]
5'6 kfpg]5 .
-g_ s'g} pBf]un] cfkm"n] k|fKt u/]sf] af}l4s ;DklQ ;+/If0fsf nflu ljb]zdf btf{ ubf{ nfu]sf] z'Ns g]kfn ;/sf/n] tf]s]adf]lhd zf]wegf{ lbg
;Sg]5 .
-k_ s'g} pBf]un] s/ 5'6 kfpg] ;+:yfnfO{ rGbf jf pkxf/ lbPsf] /sddWo] Ps nfv ?k}ofF jf ;f] pBf]usf] ;f] cfo jif{sf] ;dfof]lht s/of]Uo
cfosf] kfFr k|ltztdWo] h'g 36L x'G5, ;f] /sd cfos/ k|of]hgsf] nflu 36fpg kfpg]5 .
-km_ s'g} vf; cj:yfdf g]kfn ;/sf/n] g]kfn /fhkqdf ;"rgf k|sfzg u/L tf]s]sf] s'g} sfo{sf] nflu s'g} pBf]un] vr{ u/]sf] jf rGbf lbPsf]
/sd cfo lgwf{/0fsf] k|of]hgsf] nflu k"0f{ jf cf+lzs ?kdf s§L ug{ kfpg] u/L tf]Sg ;Sg]5 .
-@_ pkbkmf -!_ df h'g;'s} s'/f n]lvPsf] eP tfklg ;"lt{hGo pBf]u, dlb/fhGo pBf]u / sTyf jf sR5 pBf]un] plNnlvt s'g} klg 5'6 tyf
;'ljwf kfpg] 5}g .
t/ To:tf pBf]ux?n] k|rlnt sfg"g adf]lhd cfˆgf >lds tyf sd{rf/Lsf] bL3{sfnLg lxt jf sNof0fsf/L sfo{x?df u/]sf] vr{, k|b"if0f
/f]syfd tyf lgoGq0f ug]{, v]/ uPsf j:t'sf] k'gM k|zf]wg ug]{, jftfj/0fdf Go"gtd c;/ kfg]{ k4lt tyf pks/0fdf ePsf] vr{, phf{
bIftfdf clej[l4 u/L phf{ vkt 36fpg ;3fp k'¥ofpg] oflGqs pks/0fdf nufgL u/]sf] vr{, cg';Gwfg tyf ljsf; vr{ nufot Joj;fo
k|j4{gsf nflu x'g] jf:tljs vr{x? s§L ug{ kfpg]5g\ .
-#_ Pp6} cfosf] ;DaGwdf o; bkmf adf]lhd PseGbf a9L 5'6 kfpg ;Sg] cj:yf ePsf] pBf]un] cfk"mn] /f]h]sf] s'g} Pp6f 5'6 dfq kfpg]5
.
cg';"rL–!)
-bkmf @@ sf] pkbkmf -!_ sf] v08 -u_ ;Fu ;DalGwt_
-s_ clt cljsl;t If]q
!= afh'/f @= hfh/sf]6 #= 8f]Nkf $= x'Dnf %= h'Dnf ^= sfnLsf]6 &= bfr'{nf * c5fd (= aemfË !)= d'u' !!= ?s'd !@= b}n]v !#= t]x|y'd !$=
vf]6fË !%= ;+v'jf;ef !^= dgfË !&= d':tfË !*= ;f]n'v'Dj' !(= cf]vn9'Ëf
-v_ cljsl;t If]q
!= a}t8L @= 88]nw'/f #= DofUbL $= ef]hk'/ %= kfFry/ ^= Ko"7fg &= afUn'Ë *= /;'jf (= l;Gw' kfNrf]s !)= /fd]5fk !!= ;Nofg !@= /f]Nkf !#=
8f]6L !$= tfKn]h'Ë
-u_ sd ljsl;t If]q
!= s}nfnL @= alb{of #= s~rgk'/ $= kfNkf %= ndh'Ë ^= uf]/vf &= c3f{vfFrL *= wgs'6f (= ;'v]{t !)= bfË !!= :ofËhf !@= tgx'F !#=
pbok'/ !$= g'jfsf]6 !%= wflbË !^= sfe|]Kfnf~rf]s !&= slknj:t' !*= l;/xf !(= /f}tx6 @)= ;Kt/L @!= ;nf{xL @@= dxf]Q/L @#= Onfd @$=
kj{t @%= l;Gw'nL @^= bf]nvf @&= u'NdL
23 Facilities and concessions available to To be read in relevant provisions of the Value Added Tax Act and
industries related to vat & customs Customs Act of Nepal.
d"No clej[l4 s/ / eG;f/ dx;'n ;DaGwL 5'6, ;'ljwf jf ;x'lnot M
o; P]g adf]lhd btf{ ePsf] pBf]unfO{ b]xfo adf]lhdsf] d"No clej[l4 s/ / eG;f/ dx;'n 5'6 lbOg]5 M–
-s_ d'n'sleq pTkflbt j:t' ljb]zdf lgof{t u/]df ljb]zdf lgof{t u/]sf] kl/df0fsf] cfwf/df To:tf] pTkfbgdf nfu]sf] d"No clej[l4 s/
To:tf] pTkfbg ug]{ pBf]unfO{ lkmtf{ lbOg]5 .
-v_ a08]8 j]o/ xfp; jf gub w/f}6L -kf;a's_ sf] ;'ljwf glnPsf pBf]ux?n] lgof{t u/]sf] xsdf g]kfn ;/sf/n] g]kfn /fhkqdf ;"rgf
k|sfzg u/L tf]s] adf]lhdsf] ;db/ lgwf{/0f u/L 8\o'6L 8« Aofssf] /sd lkmtf{ ul/g]5 .
-u_ a08]8 j]o/ xfp;sf] Ohfht glnPsf pBf]ux¿n] cfˆgf pTkfbg k|tLtkqsf] dfWodåf/f jf k|rlnt a}lsË k|0ffnLsf] dfWodaf6 lgof{t
ug]{ jf kl/jTo{ ljb]zL d'b|fdf :jb]zd} laqmL ug]{ ePdf To:tf] dfnj:t' pTkfbg ug{ cfjZos kg]{ sRrf kbfy{ jf ;xfos sRrf kbfy{ /
g]kfndf pTkfbg gx'g] Kofs]lhË ;fdu|L ;d]t cfoft ubf{ nfUg] eG;f/ dx;'n tf]lsPsf] zt{ / sfo{ljlwsf] cwLgdf /xL w/f}6L /fvL cfoft
ug{ kfpg]5 .
-3_ v08 -u_ df h'g;'s} s'/f n]lvPsf] eP tfklg g]kfndf pTkfbg gx'g] Kofs]lhË ;fdu|Lsf] xsdf ljefun] g]kfndf pTkfbg gx'g] egL
k|dfl0ft u/L ;'ljwf lbg l;kmfl/; u/]df dfq To:tf] pBf]un] v08 -u_ adf]lhdsf] ;'ljwf kfpg]5 .
-ª_ s'g} pBf]un] cfˆgf] pTkfbgsf nflu cfjZos kg]{ sRrf kbfy{, ;xfos sRrf kbfy{, Kofs]lhË ;fdu|Ldf nfUg] eG;f/ dx;'n ;fdfGotM
To:tf] sRrf kbfy{af6 pTkfbg x'g] tof/L j:t'sf] cfoftdf nfUg] eG;f/ b/ eGbf Ps tx sd x'g]5 .
-r_ pBf]un] cfˆgf] Jofj;flos k|of]hgsf] nflu cfoft ug]{ d]l;g/L, 6«fG;kmd{/, bz lsnf]jf6 jf ;f]eGbf a9L Ifdtfsf] h]g]/]6/ / cf}Bf]lus

pks/0fdf Go"gtd b/df eG;f/ dx;'n nfUg]5 .

-5_ u'0f:t/ dfkg ug]{ k|of]uzfnfn] u'0f:t/ dfkg ug]{ k|of]hgsf nflu cfoft ug]{ d]lzg/L tyf j}1flgs pks/0f / pBf]un] cg';Gwfg tyf
ljsf;sf] nflu cfoft ug]{ d]lzg/L tyf pks/0fdf Go"gtd b/df eG;f/ dx;'n nfUg]5 .
24 Other facilities and concessions to  No registration fees on registration of Micro Industries.
Micro Industries  5 year Tax Holiday for any Micro Industries in operation before this
act or any Micro Industries incorporated under this act.
25 Other facilities to Women  Notwithstanding anything contained in the prevailing laws, the
Entrepreneurs and industry which is concession of 35% shall be provided in the registration fee prevailing
under full ownership of female at the time of registration if any industry is registered under the sole
entrepreneurs ownership of women entrepreneur.
 Notwithstanding anything contained in the prevailing laws, the
concession of 20% shall be provided in the registration of industrial
assets prevailing at the time of registration of assets to any industry
registered under the sole ownership of women entrepreneur,
 If women entrepreneur wishes to establish industry in an industrial
area, she shall be availed space inside the industrial area with priority
as prescribed.
 Industry registered with the sole ownership of women entrepreneur
may be availed export credit as prescribed for the purposes of export
of its industrial production on the basis of financial position of the
business.
26 Special provision for industries  No Integrated Property Tax (Ekikrit Sampati Kar), Rent Tax (2%)
operating in Industrial Areas
Dec 2017, CAP III Necha Salyan Hydro Electricity Company (P) Limited of Solu, Dungeswor Petrochemical Exploration
Company of Dailekh and Lomangthan Resort (invested Rs. 50.1 million) at Mustang (all three are newly
incorporated) applied to One Window Committee to get the facilities as mentioned in the various
provisions of the Act. Explain referring the provisions of Industrial Enterprises Act, 2073.
June 2018, Mrs. Radhika Tamang is thinking to establish an Industry in Banepa-10, Kavre. She seeks your opinion as
CAP III: RTP to whether women entrepreneur is provided additional facilities and concessions. Advise her as per
Industrial Enterprises Act, 2073.
June 2018, CAP The Industrial Enterprises Act, 2073 has provided various facilities to the industries established under
III this act. State the income tax facilities to the following group of industries:
i. Production oriented industry in general,
ii. Infrastructure industries,
iii. Industries established in areas as described in schedule -10,
iv. Exports by production oriented industries,
v. Industries who expend big amount for the long term benefit to workers and employees,
vi. Expenditure incurred on machinery and instruments to increase the productivity of energy.
2018 Dec, CAP II Ms. X is an entrepreneur. She has consulted you to know the additional facilities that an industry owned
by the women has provided. Suggest her on the basis of the Industrial Enterprise Act, 2073?
Dec 2018, CAP II: Whether women entrepreneur is provided additional facilities and concessions. Advise her as per
RTP Industrial Enterprises Act, 2073.
June 2019, Industrial Enterprise Act, 2073 (IEA) has provided the various types of exemptions, facilities and
CA Membership concessions to industries. Among them additional facilities and concessions has been provided for
various sectors industries. State the additional facilities and concession as provided in the Act.
5.2 FURTHER FACILITIES AND CONCESSIONS (Section 27)
The following industries, in addition to the facilities and concessions as set forth in section 22, 23 & 24, may be granted
further facilities and concessions as below:
Industry Further Facility

Forest based industry Forest-based industry may be made available any forest on a leasehold basis.
Generates electricity for its own No royalty shall be imposed if any industry generates electricity for its use.
use
Sale of electricity generated for If electricity generated for its use is in excess then it can be sold as per the rate under
own use contract.

Industries established in EPI Government of Nepal may, by notification published in the Nepal Gazette, grant additional
and Industrial estates facilities to the Export Promotion Industry and prescribed industries established in the
Export Processing Zone and in the government or non-government industrial estate.
National Priority Industries On the recommendation of and with the decision of the Council of Ministers, and by
notification published in the Nepal Gazette, additional facilities may be granted to any
National Priority Industry or any industry established in Nepal by the way of invention
done in in Nepal itself.
Concessions during the period Concessions can be provided to the industries for the period when there is no electricity
of lack of electricity supply supply as per demand charge.
Grants for seed capital Grants can be provided to micro, cottage or small industries situated in remote areas for
Seed capital: aLp k"Fh L -l;8 Soflk6n_.
Import permission for new For industries operating under foreign investment, import permission can be provided for
products new product manufacture and promotion if such import is done from parent company.
5.3 PROVISIONS RELATING TO LAND (Section 28)
Land to be purchased by Land should be purchased by industry itself.

industry itself Provided that, if the entrepreneur cannot purchase by himself then he may apply, with
reasons, to the department and department can assist in such purchase.
Industrial Enterprises Regulations, 2076
Following industries shall obtain such assistance from department:
a) National Priority Industries,
b) Export Industries,
c) Medium and Large scale industries established in Under-developed areas,
d) Industries providing employment to minimum 500 employees,
e) Industries investing more than ten arba in Permanent Capital,
f) Industries based on minimum 50 % local national raw materials in its finished
goods and in case of imported raw materials, medium and large scale industries
with minimum 50% value addition.
5.4 LAND TO BE MADE AVAILABLE ON LEASE (Section 29)
Land to be made available in 1. National Priority Industries can apply to the department for lease rental facility for land
lease under ownership of GoN.
The application for such land lease shall be accompanied by following documents:
a) Copy of registration certificate,
b) Details of industry project,
c) Details of area required and location of land,
d) Recommendations to be obtained from any other authority, if any,
e) Reasons for obtaining such lease,
f) Recommendation from concerned local federal level.
2. Department's duty: Applications received from such NPIs shall be forwarded to ministry
for further processing & facilities may be provided within 6 months of application.
3. Terms and conditions of lease rental shall be as per the agreement between GoN and
applicant.
4. If any industry in operation on lease rental land is unable to operate then, the land shall
revert to GoN and agreement shall be ipso facto suspended.
5.5 POSSESSION OF LAND IN EXCESS OF THRESHOLD LIMIT (Section 30)
Possession of Land in excess of Allowable as per terms and conditions of GoN after application from such industry.
threshold limit

5.6 GUARANTEE OF FACILITIES (Section 31)
Once registered facilities and An industry which is operated by obtaining permission or by getting registered under the
concessions are granted (1) Industrial Enterprises Act, 1981 shall continue to enjoy the time bound facilities and
concessions under the Act and with regard to the facilities and concessions for which no
time has been fixed; it shall enjoy the facilities and concessions under this Act.
Industries registered before  An industry which has been registered or has obtained permission before the
this act shall also enjoy the commencement of this Act, but which has started its commercial production only after
facilities and concessions (2) the commencement of this Act shall enjoy the facilities under this Act.
 Provided that if the time bound facilities and concessions to be enjoyed under the
Industrial Enterprises Act prevailing at the time registration or obtaining permission by
such industry are for more than the period as granted by this Act or if the facilities and
concession are not to be made available under this Act, nothing shall prevent from
enjoying the facilities and concessions under the prevailing Industrial Enterprises Act.
 An industry which has been registered or has obtained permission before the
commencement of this act shall be entitled to enjoy such time-bound facilities and
concessions as are being enjoyed by it at the time of registration of obtaining permission
in accordance with the law and with regard to the facilities and concessions for which no
time has been fixed, it shall enjoy the facilities and concessions under this Act.
Kantipur television Network सरकारले कुनै उद्योग व्यवसाय सन्चालनको लागग कसैलाई सहमिी प्रर्ान गरी आश्वासन दर्एपनछ
Ltd. Vs Ministry of त्यही ववश्वासमा परी अको पक्ष अगाडि वढे कोमा सरकारले पनछ कुनै कारण जनाई पदहला दर्एको
communication
अनम
ु िी कर्िाा ललन सतर्ैन, त्यस्िो सहमिी र अनम
ु िी परु ा गनप
ुा ने ।
5.7 INDUSTRIES NOT TO BE NATIONALIZED (Section 32)
Prohibited No Industry shall be nationalized.
Dec 2015, Makalu industry has been in operation from 2065 Sharwan; however, industry is in consecutive losses
CAP II: RTP since its establishment. Council of Ministers, Government of Nepal thinks that it will be more beneficial
to protect the employment of industry's worker or employee rather than to liquidate the company,
consequently, Government of Nepal decided to nationalize the industries. Give your opinion based on the
relevant provisions of the law.
June 2019, Agni industry has been in operation from 2065 Sharwan; however, industry is in consecutive losses
CAP III: RTP since its establishment. Council of Ministers, Government of Nepal thinks that it will be more beneficial
to protect the employment of industry's worker or employee rather than to liquidate the company,
consequently, Government of Nepal decided to nationalize the industries. Give your opinion based on the
relevant provisions of the law.
5.8 PROVISIONS RELATING TO INDUSTRIAL SAFETY (Section 33)
Prescribed by GoN For the industries registered as per the prevailing laws, Government of Nepal shall provide
the industrial safety as prescribed.
5.9 MISUSE OF FACILITIES AND CONCESSIONS (Section 34)
Strictly prohibited No Misuse of the facilities and concessions to be enjoyed by any industry under this Act
shall be allowed.

Chapter 6:
PROVISIONS RELATING TO ONE WINDOW COMMITTEE
6.4 ONE-WINDOW COMMITTEE (Section 35)
GoN shall, for the purpose of The members of such committee shall be as prescribed.
making available the facilities Prescribed in Official Gazette published on 2073/12/23 as follows
and concessions to be enjoyed Numbers & Position Person
by any industry under this Act 1 Coordinator The Director General, Department of Industries
in time from a single place 1 Member The Director General or representative (Deputy secretary
constitute a One-Window level), Department of Customs
committee (1) 1 Member The Director General or Representative (Deputy Secretary),
Inland Revenue Department
1 Member The Director General or Representative (Deputy Secretary),
Department of Commerce
1 Member First Gazette Officer or same level officer or Second Gazette
Officer Designated by him, Nepal Rastra Bank
1 Member The Director General or Representative (Deputy Secretary),
Department of cottage and small Industry
1 Member Representative, Federation of Nepalese Chamber of Commerce
& Industries(FNCCI)
1 Member Representative, Confederation of Nepalese Industries
(Parisang)
1 Member - Secretary The Deputy General Director, Department of Industries
2002 Dec, CAP II Formation of one window policy committee under the Industrial Enterprise Act.
2003 Dec, CAP II Short Notes: One window policy system.
2004 Dec, CAP II Explain one window policy system.
2009 June, CAP II Point out the composition and main functions of One- Window Committee as provided under the
6.5 FUNCTIONS, DUTIES AND POWERS OF THE COMMITTEE (Section 36)
Functions, Duties and Power of 1. To make necessary decisions for making available the facilities and concessions to be
the Committee enjoyed by any industry under this Act,
2. To perform such functions as may be delegated by the Board under its functions, duties
and powers.
3. To make recommendations as may be required for making time bound provisions on
making available infrastructural services such as electricity, water, means of
telecommunications, land, road and so on required for the industries.
4. Other functions, duties and powers of the Committee shall be as prescribed.
Duty of to implement decision Any decision made by the Committee shall be required to be implemented by the concerned
of committee (2) body.
Delegation of power by the The committee may, as required, delegate some of its powers to the sub-committee
committee (3) constituted under sub-section (4).
Provided that the function of committee as delegated by board will not be delegated.
Sub-committees (4) The committee may constitute sub-committees as may be required for the transaction of its
business and the function, duties and powers of the sub-committees so constituted shall be
as fixed by the Committee.
2003 June, CAP II Enumerate Functions, duties and powers of the one-window Committee Constituted under the Industrial
Enterprise Act, 1992.
Dec 2012, CAP III Write short notes on: Functions, duties and powers of the “One Window Committee”.
Dec 2018, Explain the functions, duties and power of One Point Service Operation Committee under Industrial
CAP III: RTP Enterprises Act, 2073.

Chapter 7:
PROVISIONS RELATING TO SICK INDUSTRIES
7.1 IDENTIFICATION OF SICK INDUSTRIES (Section 37)
Sick industries (1)  Minimum 5 years has elapsed since commencement of production or business
 Except on intentional or management weakness
 Running under 30% or less of its production capacity during previous 3 years
(Continuous)
 Continuous loss for 3 years
Government of Nepal on recommendation from Ministry of Finance, declare any of the
following industry as sick industry:
a) Industries unable to repay loan and interest,
b) Industries with exceptionally high loan in proportion to capital,
c) In case of industries listed in Nepal Stock Exchange, industries with share’s market
price lower than face value,
d) Industries making production lower than break-even point for continuous previous
3 years,
e) Industries unable to be operated due to natural calamities, force majure or other
circumstances beyond control,
f) Industries unable to compete in international markets, due to changes in
international industrial or financial provisions.
Revival of sick industries (2) Government of Nepal may make provisions for revival of such sick industries as and when
required on the basis of their previous performance such as job creation, foreign currency
earnings, etc.
2004 Dec, CAP II State the criteria for an industry to be declared a Sick Industry under the Industrial Enterprise Act,1992.
What facilities/concessions does a Sick Industry get under the Act?
2005 June, CAP II Short Notes : Sick Industry
2006 June, CAP II State the criteria for an industry to be declared a Sick Industry under the Industrial Enterprise Act,
1992?
June 2007, CAP III The government can declare an industry “sick industry”. What symptoms have been prescribed to
become a sick industry as per industrial enterprises act 2049? Can such industry get some special
benefit/ relaxation for its revival or moderation as per industrial enterprises act, 2049?
2007 Dec, CAP II Short Notes : Sick Industry
2008 June, CAP II ABC & Co. Ltd. is engaged in manufacturing industrial products for the past fifteen years. The company
has suffered continuous losses during the last four years. Mr. X, director of the Company seeks your
advice about the eligibility criteria for declaration of a sick industry and the benefits available to a sick
industry under Industrial Enterprise Act. Advice.
Dec 2008, CAP III Write short notes on: sick industry
2010 June, CAP II Sagarmatha Enterprises, an industry established in the year 2060 being operated in loss till date. Mr.
Luckless, promoter of the industry thinks that if the Industry is declared sick and more facilities would be
obtained and the industry would be exempted tax on the raw material to be imported from India.
i. Can such industry be declared as sick industry?
ii. Who has the right to declare the industry as sick industry?
iii. Whether the contention of Mr. Luckless regarding exemption of tax is tenable?
2013 June, CAP II Short Notes: Sick Industries
2015 July, CAP II Makalu Enterprise, an industry established in the year 2064 is being operated in loss till date. Mr. Dil
Juharchan, a promoter of the industry thinks that if the industry is declared sick industry and more
facilities would be obtained and the industry would be exempted tax on the raw materials to be imported
from China. Answer the following questions on the basis of existing laws of Nepal.
i. Can such industry be declared as a sick industry?
ii. Whether the contention of Mr. Dil Juharchan regarding exemption of tax is tenable?
2016 Dec, CAP II Sagarmatha Enterprise, an industry established in the year 2064 being operated in loss till date. Mr.
Anil Shah, promoter of the industry thinks that if the industry is declared sick industry and more
facilities would be exempted tax on the raw materials to be obtained and the industry would be exempted

tax on the raw material to be imported from China. Answer the following questions on the basis of
relevant laws of Nepal.
i. Can such industry be declared as sick industry?
ii. Whether the contention of Mr. Anil Shah regarding exemption of tax is tenable?
June 2017, What do you mean by Sick Industry?
CAP II: RTP
Dec 2017, What do you mean by Sick industry as per Industrial Enterprises Act, 2073?
CAP II: RTP
June 2018, What do you mean by Sick Industry as per Industrial Enterprises Act, 2073? What are the types of Sick
CAP II: RTP Industry?
Dec 2018, Define Sick Industry and its types.
CAP II: RTP
2018 June, CAP II Explain "Sick Industry" under Industrial Enterprises Act 2073.
Dec 2019, Yeti industry has been in operation from 2068. The company operated in profit up to the year 2071. It
CAP III: RTP was in loss from the year 2072 to 2075 with production level of 50% during these years. Ram Lal, the
managing director of the company is contemplating that his industry be classified as sick industry and it
shall obtain facilities and exemptions accordingly. You are required to advise Mr. Ram Lal citing the
legal provisions of Industrial Enterprises Act, 2073.
7.2 CLASSIFICATION OF SICK INDUSTRIES (Section 38)
Classification As Prescribed
Prescribed in Industrial Enterprises Regulation, 2076
Classification Fully Sick Sick Partial Sick
Except for intentional or Y Y Y
managerial weakness
Decrement in Equity 70% 50% 30%
Running under ___ % or less of 20% 25% 30%
its production capacity during
previous 3 years (Continuous)
Closed for previous ___ years 3 2 1
(Continuous)
On providing any facilities, 5 3 2
concessions and rebate as
provided under this act or
regulation and expected to
operate in profit within ___ years
7.3 FACILITIES, CONCESSIONS AND REBATE TO SICK INDUSTRIES (Section 39)
Relaxation on taxes on import Government of Nepal may provide full or partial rebate on duty, fees and taxes of any kind
of machineries levied on machineries, equipment, tools or devices imported for extension, reconstruction
and diversification of such sick industry as per section 37 or 38.
Government of Nepal may make recommendations to the concerned authorities for the
following facilities, concessions and rebates:
a) Restructuring the existing loans into soft loans,
b) Rebate in interests and penalty on loans,
c) Provide additional loans at lower discounted interest rates,
d) Full or partial rebate on duty, fees and taxes of any kind levied on machineries,
equipment, tools or devices or raw materials imported,
e) Full or partial rebate on duty, fees and taxes of any kind levied on export of
products,
f) Increase repayment period of loans,
g) Provide full or partial rebate on applicable duty, fees and tax rates.

7.4 PROVISIONS RELATING TO REVIVAL OF SICK INDUSTRIES (Section 40)
As prescribed by GoN (1) For the purpose of providing recommendations on identification, classification, revival,
reconstruction or management of Sick industries, Government of Nepal may form a board
constituting of experts of the related fields.
Such board shall have five members as constituted by Special class gazette or equivalent
officer of GoN as convener and First class gazette or equivalent officer of GoN, experts in
the field of industries, commerce, banking and financial sectors as members.
Functions & duties (2) Functions, powers and duties of such board shall be as prescribed.
a) Identify sick industries,
b) Analyze physical and financial state of sick industries,
c) On-site study of sick industries,
d) Recommend GoN about steps for revival of sick industries.

Chapter 8:
PROVISIONS RELATING TO PUNISHMENTS AND APPEAL
8.1 PROVISIONS RELATING TO PUNISHMENT (Section 41)
Punishments provisions  If there is a reason to believe that any industry is in operation without registration under
this act or previous acts then required inspection, inquiry and investigation can be done by
concerned district's industry development office. The office shall prepare a report about
such violations and send it to the ministry for punishments and also a copy to district
administration office.
 Ministry shall provide time (Maximum 3 months) for clarification or registration and to
produce evidence.
 Opportunity of being heard allowed: 15 days
 Punishment for Non-registration:
1. Order of closing down of such industry
2. Monetary Fine
Micro Industries Rs. 10,000 – Rs. 25,000
Cottage Industries Rs. 25,000 – Rs. 1,00,000
Small Industries Rs. 25,000 – Rs. 1,00,000
Medium Industries Rs. 1,00,000 – Rs. 3.00,000
Large Industries Rs. 1,00,000 – Rs. 3.00,000
 Punishment for non-supply of return under section 12
1. Monetary Fine
Micro Industries Rs. 5,000
Cottage Industries Rs. 10,000
Small Industries Rs. 20,000
Medium Industries Rs. 40,000
Large Industries Rs. 75,000
 Other Punishments
Violation of section 34 Withdraw the facilities or concessions OR
if already utilized then recovery of amount so
utilized or fine of same amount OR
both
Violation of section 48 (CSR) 0.75% of yearly transactions
Any conditions and directions Monetary Fine Or
not followed under section 5 or Micro Rs. 25,000 to Rs. 1,00,000
30 Cottage Rs. 2,00,000 to Rs. 5,00,000
Small Rs. 2,00,000 to Rs. 5,00,000
Medium Rs. 5,00,000 to Rs. 10,00,000
Large Rs. 15,00,000 to Rs. 30,00,000
Close the industry for specific period Or
Cancel the registration or Permission.
Others Micro Rs. 15,000
Cottage Rs. 15,000 to Rs. 30,000
Small Rs. 15,000 to Rs. 30,000
Medium Rs. 30,000 to Rs. 50,000
Large Rs. 50,000 to Rs. 1,00,000
Dec 2013, CAP III Mr. Udhyamsheel established an industry without taking necessary permission as required under the
provisions of the Industrial Enterprises Act, 2049. What actions the Government of Nepal may take
against him? And what are the remedies available to him?
Dec 2014, When and How does Government of Nepal take action any person for violating any provision of
CAP II: RTP Industrial Enterprises Act.
June 2016, Baneshor International Hotel is closed down because of strike of employee without fulfilling the
CAP II: RTP formalities under prevailing laws. The Government of Nepal cancelled its registration as it was closed
down without fulfilling the formalities. Do you think the action taken by Government valid?

8.2 APPEAL (Section 42)
Appeal within 35 days Any person not satisfied with the punishment orders as per section 41, may go for appeal to
the concerned high court within thirty five days of receipt of such information.

Chapter 9:
MISCELLANEOUS
9.1 PROVISIONS RELATING TO SPECIAL ECONOMIC ZONES OR EXPORT PROCESSING ZONES OR
EXPORT PROMOTING ZONES (Section 43)
Prescribed by GoN Government of Nepal shall by publishing in official gazette specify special economic zones
or export processing zones or export promoting zones.
9.2 DISTRICT INDUSTRY PROMOTION COMMITTEE (Section 44)
Prescribed by GoN (1) For the promotion of small industries, cottage industries or small industries, Government of
Nepal may, at local level, on the chairpersonship of district convener committee form a
District industry promotion committee.
Functions, duties & powers (2) Functions, duties and powers of the district industry promotion board shall be as prescribed.
9.3 INDUSTRIAL HUMAN RESOURCES (Section 45)
Human resources must be The human resource required for any industry shall have to be recruited from among Nepali
Nepali Citizens (1) citizens.
Foreign nationals can be Notwithstanding anything contained in sub-section (1) above, if any industry cannot be
employed for max 5 years but operated without person living outside his/her own country expatriate (emigrant) human
with prior permission of resource, foreign nationals may be appointed in such industry with the prior approval of the
department of labor (2) Department of Labor for a maximum period of five years.
Information to be submitted to For the purpose of obtaining approval as per sub section 2, the concerned industry shall
Department of Labor (3) apply to Department of labor with particulars regarding the concerned industry’s
requirement, non-availability of such skills in Nepal, etc.
2 years extension (4) If a person so appointed happens to be a technician of special category but not available
within Nepal, such person may, with the approval of the Department of Labor, be appointed
for up to an additional period of two years.
Foreign nationals can send A foreign national who is working in any industry pursuant to Sub-section (2) above and
75% of their salaries, who is from a country wherein convertible foreign currency is in circulation, may repatriate
remunerations, etc. to their (take home) his salaries, allowances, emoluments, etc., in convertible foreign currency in an
home countries (5) amount not exceeding seventy five percent of such salaries, allowances and emoluments.
No remuneration (6) Employees who do not perform their duties diligently may not be provided with the
remuneration.
Restriction of strikes, lockouts, The workers or employees in industries shall not be engaged in strikes, lockdowns, etc. that
etc. (7) may cause obstruction in operation and production.
However the valid demand of workers or employees can be settled in peaceful manner and
with consultation of both parties.
Settlements of disputes (8) Any disputes related to demand of workers or employees shall be settled by tribunals formed
as per relevant act and such decision of tribunals shall be final.
June 2008, CAP III Mr. Dosuza, a Portuguese national is working in Potential Mines Ltd. situated in Banepa, Nepal as a
mining engineer. He has been hired by the company for a period of 5 years on the ground that he is a
technician of the special category and such resources are not available in Nepal. The total remuneration
paid to him is US $ 20,000 per annum. Examine the validity of the following actions in the light of
Industrial Enterprises Act, 1992:
i. Is the appointment valid assuming that the company is an industry under the act?
ii. The company is of the view that he should be retained for a longer period because of his
expertise in the mining industry. How long can the company retain him?
iii. What is the quantum of foreign exchange, he can repatriate to his family back home?
June 2017, Nepal Solar Power Industry is in operation with 225 Nepalese workers. Sagun Kshetri, the manager
CAP III: RTP thinks the business of the Industry would be more successful and prosperous, if he recruited certain
foreign national in the post of metal crafting and designing workers. Do you think Mr. Sagun Kshetri can
appoint foreign nationals in the Industry?

9.4 CONTRACT OR SUB-CONTRACT MANUFACTURING AGREEMENTS (Section 46)
Contract or sub-contract  Goods can be produced on the basis of the contract or sub-contract manufacturing
manufacturing agreements arrangement entered between the producers of the goods. The concept also extends to
supply of services.
 The Act does not mandate prior approval of the DOI to enter into a contract manufacturing
arrangement.
 The Act also prescribes the provision where the contract manufactures can be provided
exemption and benefit for providing of goods or services as per prescribed criteria to the
export industries or export processing units. The Government is yet to issue notification
related to such benefits and exemptions.
9.5 PROVISIONS RELATING TO FUNDS (Section 47)
Funds  Micro, Cottage and Small Industries Development Fund

 Venture Capital Fund
 Technology Development Fund
 Industrial investment preservation and promotion fund
 Sick Industries Revival Fund
 Women entrepreneurship Development Fund
June 2019, CAP III What types of funds the Government of Nepal may create pursuant to the existing Industrial Enterprises
Act, 2073 for the Industrial development of the country?
9.6 CORPORATE SOCIAL RESPONSIBILITY (Section 48)
Corporate Social  The Act makes it mandatory to allocate at least 1% of the annual profit to be utilized
Responsibility towards corporate social responsibility (the “CSR Requirement”).
 The CSR Requirement is applicable to
 all medium industries,
 all large industries, and
 Cottage industries and small industries having annual turnover more than NPR
15,00,00,000 (15 Crorers).
The fund created for CSR is to be utilized on the basis of annual plans and programs but in
the sectors that are prescribed under the Act, however, such sectors are yet to be specified by
the Act. The progress report of the utilization of the fund collected for CSR is required to be
submitted to the relevant government authorities registered within 3 months from expiry of
the financial year.
June 2019, Mention Corporate Social Responsibility (CSR) as per Industrial Enterprises Act, 2073.
CAP II: RTP
Dec 2019, CAP II: Dena Bank Ltd. a commercial bank has made profit before tax amounting to NRs.350 crores during the
RTP financial year 2075-76 and the bank has made the provision for tax amounting to NRs.105 crores. The
bank has transferred NRs.2.45 crores to CSR fund during the same financial year.
a) State whether the commercial bank has fulfilled the provision of Industrial Enterprises Act, 2073.
b) What if the above mentioned company was small industries having annual turnover of 10 crores.
Answer:
As per Section 48 of Industrial Enterprises Act, 2073, Corporate Social Responsibility measure is
applicable to every Medium or Large industries or cottage or small industries having annual turnover of
more than 15 crores. Such industries shall allocate for every year at least 1% of the annual profit to be
utilized for corporate social responsibility (“CSR Requirement”). The fund allocated for CSR shall be
utilized by making annual plans and programs in the areas as may be prescribed.
In the given case, Dena Bank Ltd. has made after tax profit of 245 crores during the financial year 2075-
76. Dena Bank Ltd. fall under large industries category which requires to transfer 1% of the annual
profit to be transferred to CSR fund which is calculated to be 2.45 crores. The bank has allocated the
same amount as it is required to be allocated for the maintenance of CSR fund which shows that Dena
Bank Ltd. has complied with the provision of Industrial Enterprises Act, 2073.

The enterprise is not required to transfer 1% of the annual profit to CSR fund if such industries are
classified under small industries with turnover not more than 15 crores.
9.7 INDUSTRIAL CORRIDOR, INDUSTRIAL GRAM OR INDUSTRIAL CLUSTER (Section 49)
Prescribed by GoN As notified by Government of Nepal in Official Gazette
9.8 PROHIBITION ON BUILDING RESIDENTIAL HOUSE OR OTHER HOUSE IN INDUSTRIAL AREAS

(Section 50)
Prohibition on building  No residential houses or other types of houses as a creation of residential society can be
Residential house or other built in the area notified by GoN as Industrial Corridor, Industrial Gram or Industrial
house in industrial areas Cluster and vice versa.
 If any person sustains loss due to above provision, GoN shall provide reasonable
compensation for that.
9.9 DELEGATION OF POWER (Section 51)
Delegation of powers of Board The Board may delegate any or all of its power conferred upon it by this Act or Rules made
to committees (1) there under to the concerned Department, Office, and official Committee, any member of
the Board or any other committees or sub-committees constituted by the Board as necessary.
Delegation of powers to others The Department may delegate any or all of its power conferred upon it by this Act or Rules
(2) make there under to any other department, office or official as necessary.

Unit 6: Industrial Enterprises Act, 2073

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Unit 6: Industrial Enterprises Act, 2073

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Corporate Laws (CAP-III) - Industrial Enterprises Act, 2073

Date of Authentication and Publication: 7 Mangsir 2073

ACT NO. 20 OF THE YEAR 2073

INDUSTRIAL ENTERPRISES REGULATION, 2076

S. No. Act Date

CA Mahesh Gyawali 6.1

Purpose (Objectives) of the The objective of Industrial Enterprises Act is:

1.2 DEFINITIONS PROVIDED IN THE INDUSTRIAL ENTERPRISES ACT (Section 2)

In this Act, unless the subject or the context otherwise requires,

S. No. Term Definition

CA Mahesh Gyawali 6.2

2009 June, CAP II Short Notes: Export Promotion Industry.

CA Mahesh Gyawali 6.3

2.2 APPLICATION FOR REGISTRATION (Section 4)

2.3 REGISTRATION CERTIFICATE OF INDUSTRIES (Section 5)

CA Mahesh Gyawali 6.4

2.4 MITIGATION OF NEGATIVE EFFECT ON ENVIREONMENT (Section 6)

2.5 PERMISSION (Section 7)

CA Mahesh Gyawali 6.5

 Others as may be prescribed

CA Mahesh Gyawali 6.6

2.6 INFORMATION ABOUT COMMERCIAL PRODUCTION OR COMMENCEMENT OF TRANSACTIONS

2.7 APPEAL (Section 9)

2.8 INSPECTION AND SUPERVISION (Section 10)

CA Mahesh Gyawali 6.7

2.9 RELOCATION OF INDUSTRIES (Section 11)

2.10 RETURNS TO BE SUBMITTED (Section 12)

2.11 INFORMATION ON CLOSURE OF INDUSTRIES (Section 13)

2.12 APPLICATION FOR CANCELLATION OF REGISTRATION OF INDUSTRIES (Section 14)

CA Mahesh Gyawali 6.8

b) Documents proving of settlement of all the liabilities pending relating to workmen

CA Mahesh Gyawali 6.9

CA Mahesh Gyawali 6.10

CA Mahesh Gyawali 6.11

CAP II: RTP

3.2 PERMANENT CAPITAL OF INDUSTRIES (Section 16)

3.3 NATIONAL PRIORITY INDUSTRIES (Section 17)

As per Annexure-9 1) Energy based Industries

CA Mahesh Gyawali 6.12

4.1 FORMATION OF THE INDUSTRIAL PROMOTION BOARD (Section 18)

To make decisions on policies Numbers & Position Person

4.2 FUNCTIONS, DUTIES AND POWERS OF THE BOARD (Section 19)

CA Mahesh Gyawali 6.13

5. To make recommendation to Government of Nepal for the inclusion of any industry in

2004 June, CAP II Short Notes : Industrial Promotion Board

4.4 SECRECY (Section 21)

CA Mahesh Gyawali 6.14

5.1 FACILITIES AND CONCESSIONS AVAILABLE TO INDUSTRIES (Section 22 - 26)

Section No. Particulars Available facilities, concessions and exemptions

CA Mahesh Gyawali 6.15

CA Mahesh Gyawali 6.16

pks/0fdf Go"gtd b/df eG;f/ dx;'n nfUg]5 .

5.2 FURTHER FACILITIES AND CONCESSIONS (Section 27)

Industry Further Facility

CA Mahesh Gyawali 6.17

5.3 PROVISIONS RELATING TO LAND (Section 28)

Land to be purchased by Land should be purchased by industry itself.

5.4 LAND TO BE MADE AVAILABLE ON LEASE (Section 29)

5.5 POSSESSION OF LAND IN EXCESS OF THRESHOLD LIMIT (Section 30)

CA Mahesh Gyawali 6.18

5.6 GUARANTEE OF FACILITIES (Section 31)

5.7 INDUSTRIES NOT TO BE NATIONALIZED (Section 32)