Author: gandhi2024law

Child Custody in Nepal: Filing, Parental Rights, and Court Considerations

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Overview of Legal Rights, Procedural Steps & Judicial Factors

Introduction

Child custody in Nepal is governed by the National Civil Code 2074 (2017) and interpreted by courts under the principle of the “best interest of the child.” While the law provides equal rights to both parents regardless of gender or marital status, in practice, custody proceedings are shaped heavily by judicial discretion, prevailing social norms, and the court’s assessment of parental capabilities. This briefing outlines the legal framework, filing procedures, document requirements, and judicial considerations that apply in child custody proceedings across Nepal.

Legal Framework

Constitutional and Statutory Basis

  • National Civil Code 2074 (2017):
    • Sections 93–109: Custody and maintenance during/after divorceSections 115–120: Parental responsibility and guardianship
    • Section 210: Duty to register child’s birth; obligation of both parents
  • National Civil Procedure Code 2074 (2017): Governs court procedure, mediation, and interim orders
  • Constitution of Nepal (2015):
    • Article 18: Right to equality
    • Article 39: Rights of the child to care, upbringing, protection, and identity

Custody Classifications

ClassificationDescription
Sole custodyOne parent receives full physical and legal custody of the child
Joint CustodyBoth parents share decision-making and/or care
Third-Party CustodyCustody is awarded to someone other than the biological parents

Procedure and Detailed Analysis

Filing Procedure

  • Jurisdiction: District Court where the child resides or where the parents last cohabited.
  • Who Can File: Either parent, a guardian, or a relative in cases of incapacity, abandonment, or death.
  • Steps:
    • File a petition for custody (independently or as part of a divorce case)
    • Submit a request for interim custody, visitation, or support (if applicable)
    • Mediation may be ordered
    • Court may issue interim custody during proceedings
    • Final judgment delivered based on merits

Required Documents

DocumentPurpose
Citizenship certificate of applicantProof of identity and nationality
Marriage/divorce certificateEstablish legal relationship or context
Child’s birth certificateProof of parentage
Financial and housing documentationEvidence of capacity to support the child
Medical or abuse records (if any)Supports claims for sole custody or visitation limits

Issues & Practical Considerations

Judicial Considerations

Nepali courts apply the “best interest of the child” standard, considering:

  • Age and emotional needs of the child
  • Parental fitness and conduct
  • Stability of each parent’s home environment
  • Existing bond between child and parent
  • Child’s opinion
  • History of abuse, neglect, or violence

Presumption: Mothers are generally favored for children under 5 unless proven unfit.

Child Support and Maintenance

  • Noncustodial parent is legally obligated to contribute:
    • Court determines the amount based on financial capacity and child’s needs
    • Payment may be in the form of monthly allowance or in-kind support
    • Noncompliance is enforceable through execution or contempt action

Visitation and Parental Access

  • Visitation rights are typically granted to the noncustodial parent
  • Courts may impose supervision or location conditions if required
  • Visitation can be restricted in abuse or neglect cases

Modification and Enforcement

  • Orders may be modified due to changed circumstances:
    • Common triggers: relocation, remarriage, income change, or child’s welfare
  • Violations are enforceable under civil procedure laws

Practical Advice

Special Scenarios

ScenarioCourt Approach
Unmarried ParentsEither may file; proof of paternity may be required
Parental death/incapacitySurviving or capable guardian typically receives custody
Abuse or neglectCourt may deny custody and appoint a third-party guardian or institution

Key Barriers and Gaps

  1. No standard method for evaluating psychological fitness
  2. Lack of uniformity across district courts
  3. Weak enforcement mechanisms for support and visitation
  4. Cultural biases may influence outcomes despite gender-neutral laws

Recommendations for Applicants

  • Prepare a comprehensive file: identity, residence, income, and school records
  • Seek interim custody if there is risk of harm or interference
  • Cooperate fully with court-ordered mediation
  • Maintain a record of all proceedings
  • Consult legal counsel in contested or complex matters

Conclusion

Navigating child custody cases in Nepal requires not only understanding the legal provisions but also careful attention to judicial discretion and social context. Applicants should prepare thoroughly and seek professional legal guidance to protect both the child’s welfare and parental rights.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice, advertisement, personal communication, solicitation or inducement. No attorney-client relationship is created through this content. Gandhi & Associates assumes no liability for any consequences resulting from actions taken based on information contained herein.

For quick legal assistance:

Phone/Viber/WhatsApp: +977 9709035477

For specific legal advice regarding child custody in Nepal, please contact our office to schedule a consultation with our experts.

Digital Service Tax (DST) Registration in Nepal

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Nepal has progressively developed its tax framework to address the challenges posed by the digital economy. The Digital Service Tax (“DST”) was initially introduced through the Procedure Relating to Digital Service Tax in the fiscal year 2022 (2079), and has since undergone several revisions to accommodate evolving needs. The most recent version of the DST framework was promulgated in 2025 A.D. (2082), pursuant to the prevailing Finance Act.

The DST is specifically designed to regulate and tax digital services supplied by non-resident entities to consumers in Nepal. Its primary objective is to ensure equitable taxation of the digital economy and to align Nepal’s fiscal regime with global developments in cross-border taxation of digital services.

This article provides an overview of Nepal’s DST regime, focusing on its legal framework, scope of application, compliance obligations, and procedural requirements for non-resident digital service providers.

Legal Framework

The legal framework governing the imposition and administration of the Digital Service Tax in Nepal is set out in the following instruments:

  1. Finance Act, 2082 (2025);
  2. Procedure Relating to Digital Service Tax, 2082 (2025); and
  3. Procedure Relating to Value Added Tax on Digital Services Provided by Non-Resident Persons, 2079 (2022) (as amended by the Third Amendment, 2082 (2025)).

Scope of Digital Services

As per the Procedure Relating to Digital Service Tax, 2082 (2025), digital service includes the following services whose delivery essentially requires information technology and is provided automatically through the internet with minimal human intervention:

  1. Paid personal advertisement services;
  2. Targeted online advertisement services;
  3. Movies, television, music, over the top (O.T.T.) and other similar subscription based services;
  4. Data collection services;
  5. Cloud services;
  6. Gaming services;
  7. Mobile application related services;
  8. Online marketplace services, and services and goods provided through it;
  9. Supply and update of software;
  10. Download of data, images and similar services;
  11. Education, consultancy, skill development and training services;
  12. E-book, e-library and e-newspaper; and
  13. Other similar services.

Applicability and Basis of Taxation

The DST is applicable to digital services supplied by non-resident entities to consumers in Nepal. For the purposes of the DST framework, consumers are defined as individuals residing in Nepal who utilize such digital services for personal consumption, rather than for commercial or business purposes (i.e., Business-to-Consumer (B2C) transactions).

Conversely, Business-to-Business (B2B) transactions fall outside the ambit of the DST Procedure. Such transactions are instead subject to taxation under the Income Tax Act and are not governed by the DST framework.

DST liability arises where non-resident entities provide digital services to Nepali consumers and the aggregate value of transactions exceeds NPR 3 million within a single fiscal year.

Rate of Taxation

The DST is levied at the rate of 2% on the transaction value, calculated exclusive of any indirect taxes such as Value Added Tax (VAT). The DST is characterized as a direct tax, and by express statutory provision, the liability may not be contractually shifted to, or recovered from, the consumer.

In parallel, a 13% VAT is applicable under the reverse charge mechanism on digital services provided by non-resident suppliers. However, the VAT liability does not extend to certain exempt categories of digital services, namely:

  1. Educational services;
  2. E-books and related digital publications;
  3. E-libraries; and
  4. E-newspapers.

Registration Procedures

            I.     Administrative Authority

The administration and enforcement of the DST is entrusted to the Large Taxpayer, which is designated as the competent authority for registration, compliance monitoring, and collection of DST.

          II.     Registration Requirement

All taxable persons under the DST framework are required to register in Nepal and obtain a Permanent Account Number (PAN) prior to engaging in taxable transactions. Failure to register does not exempt a person from their tax obligations; liability to DST arises by operation of law once the statutory conditions are met. The other requirements include:

  1. Taxable persons must apply for a PAN within 30 days of exceeding the prescribed transaction threshold (NPR 3 million in a fiscal year).
  2. Voluntary registration is permitted at any time, even prior to reaching the threshold.
  3. Non-resident persons who are already registered for Value Added Tax (VAT) in Nepal are not required to obtain a separate PAN for DST purposes.

       III.     Registration Procedure for Non-Resident Entities

Non-resident digital service providers are required to submit an application for PAN registration via Inland Revenue Department’s online portal. The application must be accompanied by the following supporting documents:

  1. Notarized copies in English of the applicant’s company registration certificate issued in the country of residence;
  2. Tax registration identification number or equivalent issued in the country of residence;
  3. An authorization letter designating a person for tax purposes, along with a notarized copy of the authorized person’s passport (in English);
  4. A photograph and specimen signature of the designated authorized person; and
  5. Where a Nepali citizen is designated as the authorized person, a notarized copy of their citizenship certificate or passport, together with the authorization letter.

Recording of Transactions

Non-resident digital service providers are required to maintain accounts on an accrual basis and must disclose the value of their transactions in Nepalese Rupees.

Filing of Returns

The filing of returns for DST and VAT differs in terms of frequency and deadline, and is outlined as follows:

ParticularsFor DSTFor VAT
Filing requirementNon-resident digital service providers must file returns and pay the applicable DST at the Large Taxpayer Office through the online system.Non-resident digital service providers must file VAT returns with the Large Taxpayer Office through the online system.
DeadlineWithin three months following the end of the income year.Within twenty-five days after the expiry of each tax period.

De-Registration

Non-resident persons wishing to de-register must apply to the Large Taxpayer Office. The Office either confirms de-registration or provide reasons for refusal within three months of receiving the application. De-registration is not granted unless all outstanding DST and VAT liabilities are cleared.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice, advertisement, personal communication, solicitation or inducement. No attorney-client relationship is created through this content. Gandhi & Associates assumes no liability for any consequences resulting from actions taken based on information contained herein.

For quick legal assistance:

Phone/Viber/WhatsApp: +977 9709035477

For specific legal advice regarding DST and VAT registration for non-resident service provider in Nepal, please contact our office to schedule a consultation with our experts.

Sentencing Act, 2074

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1. Introduction

The Sentencing Act, 2074 (hereafter referred to as “Act”) which will be effective from Bhadra 1, 2075 will mark the beginning of a new and a separate penal system in Nepal. Up until now, the essence of this specific law has been incorporated by different laws, most notably, the Muluki Ain. A need for an effective and a separate sentencing law was felt in order to ameliorate the existing Nepalese criminal legal system. Thus, the Act was drafted in order to determine penalties and implement the same in an effective manner which will considerably promote the facilitation of an effective Nepalese penal system.

First and foremost, what is needed to be understood is that the provisions of the Act do not apply to certain cases of determination of punishment, i.e. offences in relation to contempt of court, actions taken by the Legislature-Parliament against abuse of privilege and in case a law specifically mentions that the provisions of the Act will not be applied. Secondly, the Act also proposes a reformative form of punishment rather than its retributive counterpart. Unlike previous penal laws of Nepal, the Act focuses on reformative, rehabilitative and a restorative form of punishment.

The act proposes for reformation of prisoners, conducting reformative programs including skill, education and employment oriented and disciplinary programs before their release from prison. This is considered to be a first initiation of this kind. Provisions in the Act such Section 22 provides that prisoners may conduct acts of social service while Section 25 states offenders may be sent to correction facilities or correction homes for the reduction in their term of imprisonment. Similar principles can also be seen in Section 26 which states that offenders with record of drug abuse or offenders with weak mental or physical health may be sent to recreation centers whereas Section 28, 29 and 30 provide for an open jail system, parole system for prisoners and a process of socialization of the prisoners respectively, all of which aim at integrating the offenders or prisoners back into the society. The Act also seeks for correction and improvement in the prisoners before such an integration process. Section 31 states that prisoners may be allowed to leave the prison for specific amount of period in certain cases, or provided moral, work oriented, ethical and even spiritual education for improving their morality and behavior. There exists however, certain factors for providing such amenities which the prisoners will only be provided as per the provisions of the Act.

The Act has also incorporated various new principles such as punishment on the basis of gravity offence and equal punishment for same crime (equal protection principle or the principle of equality in criminal law). The new Act in Section 15 states that various factors must be considered during the determination of punishment which include mitigating and aggravating factors of crime, situation of the time of commission of crime and the overall behavior of the offender. The Act also proposes that the objective of sentencing should be to discourage crimes protect society, provide compensation to victims, reintegrate offenders in the society all while keeping them away as needed and condemn moral behaviors prohibited by law.

Compensation is also one of the major focused area of the Act and it asserts that compensation must be provided by the offender to the victim and to the heir of the victim in case of death of such a victim. It must be noted that the provisions regarding compensation have been substantially improved compared to previous laws, particularly the Muluki Ain. The Act now states that determination of the amount of compensation must be based on, among other factors, the mental, physical and emotional injuries suffered by the victim and the condition of the victim of any dependent person. Previous laws, for example, Muluki Ain, Chapter on Hurt/Battery provided minimum amount of compensation (for example, Rs. 300 per tooth in case of battery) and did not consider the above-mentioned injuries suffered by the victim. Also, the Act provides for immediate provision of compensation and its priority over fines. Finally, a victim relief fund is also to be established under the Act which will aid in an effective system of provision of compensation.

The implementation of the Act will also bring along an effective and a more functional sentencing system. Section 8/9 states that a separate hearing shall be conducted by courts within 30 days after a person has been established as an offender by the court except in cases as stated in the Act. This will help the courts to focus more on sentencing rather than the case itself, thus improving the sentencing mechanism. Section 10 further provides that this hearing process shall not be delayed or hindered even when the offender or his/her legal representative cannot appear in the court. These provisions will assist in a swift and prompt justice dispense mechanism. Unlike the current situation, after the implementation of this Act, cases will be adjudicated much quicker and will be more constructive and well decided.

The implementation of the Act will bring a much-needed change in the Nepal’s penal system. The Act along with the Muluki Criminal (Code) Act, 2074, Muluki Criminal Procedure (Code) Act, 2074, Muluki Civil (Code) Act, 2074 and the Muluki Civil Procedure (Code) Act, 2074 will form a substantial part of the laws of Nepal and will provide distinctive and separate criminal and civil laws that are currently considered to be unclear and defective in some ways. This Act will not only succor our existing penal laws but will also aid in the perfection of our justice dispense mechanism and the overall Nepalese legal system.

Note: If you seek any further information regarding the Sentencing Act, please contact the office.

Notice for all Foreign Nationals working in Nepal without work permit

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Department of Labor has recently published the notice regarding the exemption of any fines or punishment, provided that the foreign national working in Nepal without any work permit obtain their work permit by 10th April 2014.

For more information, please contact us.
Source: http://www.dol.gov.np/index-en.html

Nepal Rastra Bank Compliance for Foreign Companies

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Any Foreign Investor investing in Nepal either through Joint Venture or 100% foreign investment is required to record their equity investment (including loan) with Nepal Rastra Bank (Foreign Exchange Management Department).

Please find the detailed procedure to record their equity investment with Nepal Rastra Bank:

STEP 1: The concerned Company must obtain Circular 429 (a sample of which is attached herewith) from their respective Bank.

STEP 2: Along with Circular 429, you will need to submit following additional documents to the Nepal Rastra Bank.

  • Application to the Nepal Rastra Bank.
  • Industry Registration Certificate
  • Company Incorporation Certificate including MOA and AOA
  • Details of Equity Capital so invested
  • Circular No 429
  • Decision of Board of Directors to record the equity investment with Nepal Rastra Bank
  • Power of Attorney to submit the application on behalf of the Company.

STEP 3: After submission of the documents, Nepal Rastra Bank shall issue the certificate of record. The whole process shall take roughly around 7 days.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice, advertisement, personal communication, solicitation or inducement. No attorney-client relationship is created through this content. Gandhi & Associates assumes no liability for any consequences resulting from actions taken based on information contained herein.

For quick legal assistance:

Phone/Viber/WhatsApp: +977 9709035477