Nepal's e-commerce market is growing rapidly — by most estimates, it is expanding at 20 to 30 percent annually. But with growth comes regulation. If you are selling online in Nepal in 2026, there are legal requirements you need to understand to operate safely and avoid penalties.
This guide covers the key laws affecting online sellers in Nepal, explained in plain language without the legal jargon.
The Key Laws Governing E-Commerce in Nepal
Electronic Transaction Act 2063 (ETA 2063)
Nepal's primary law for digital commerce is the Electronic Transaction Act 2063 (2006 in the Gregorian calendar). This Act provides the legal foundation for digital signatures, electronic contracts, and digital records. It established that an electronic contract has the same legal validity as a paper contract — meaning a buyer's order confirmation on an app is a legally binding agreement.
Under ETA 2063, online sellers have obligations around: record-keeping (electronic transaction records must be maintained for a minimum period), data protection (customer personal data cannot be shared without consent), and digital contract terms (your platform's terms of service constitute a contract with buyers).
Electronic Transaction Regulations 2064
The 2064 Regulations (2007 Gregorian) expand on the ETA with specific operational requirements for e-commerce businesses. Key provisions include: requirements for digital certificate authorities, obligations on internet service providers and platform operators, and framework for dispute resolution through the Department of Information Technology.
Consumer Protection Act 2075
Nepal's Consumer Protection Act 2075 (2018 Gregorian) is critically important for online sellers. It establishes buyer rights that sellers are legally obligated to honour, including: the right to accurate product information, the right to refund for defective or misrepresented products, the right to know the price and all applicable charges before purchase, and protection against deceptive or misleading advertising.
As an online seller, displaying a product inaccurately — including misleading photos or descriptions — can constitute a violation of the Consumer Protection Act. This is one reason Troverve's video-first format is not just good marketing; it is good legal practice.
Business Registration Requirements for Online Sellers
Do You Need to Register a Business to Sell Online in Nepal?
The legal answer depends on scale and structure. Individuals selling personal items occasionally (a secondhand phone, unused household goods) are generally not required to register. However, if you are conducting regular commercial activity — buying goods for resale, manufacturing and selling products, providing services for payment — you are operating a business in the legal sense, and registration requirements apply.
PAN Registration
A Permanent Account Number (PAN) from the Inland Revenue Department is required for any individual or business with annual income exceeding the taxable threshold. For online sellers earning over Rs. 40,000 per month consistently, PAN registration is strongly advisable. Banks and payment platforms (eSewa, Khalti, Connect IPS) are increasingly requiring PAN for merchant accounts above certain transaction volumes.
Company or Business Registration
If you are operating as a business entity (selling on multiple platforms, employing staff, operating a brand), you must register with the Office of the Company Registrar (for private limited companies) or the relevant local government office (for sole proprietorships and partnerships). Registration fees start at Rs. 1,000 for a sole proprietorship.
VAT and Tax Obligations for Nepal's Online Sellers
When Does VAT Apply?
Value Added Tax (VAT) at 13 percent applies when an individual or business has annual taxable sales exceeding Rs. 5 million (Rs. 50 lakhs). Below this threshold, VAT registration is not mandatory, but voluntary registration is possible and may be beneficial if you buy inputs with VAT (you can claim input tax credits).
Online platforms that facilitate sales between buyers and sellers are currently navigating VAT responsibility — the Nepal government is developing clearer guidelines for marketplace VAT, but as of 2026, the primary obligation remains with the individual seller.
Income Tax
All income from business activities, including online selling, is subject to income tax under Nepal's Income Tax Act 2058. Individuals pay tax at progressive rates starting at 1 percent. Accurate bookkeeping of all online sales and expenses is essential for tax filing.
Consumer Rights You Are Obligated to Honour as an Online Seller
Under the Consumer Protection Act 2075, your buyers have the following rights that you must respect:
Right to accurate information: Your product listing (photos, video, description) must accurately represent what you are selling. Exaggerated claims about quality, brand affiliation, or country of origin are violations.
Right to refund for defective products: If a buyer receives a product that is defective or materially different from what was listed, they have the right to a refund or replacement. Refusing a valid refund claim is a violation.
Right to price transparency: The price shown must be the total price the buyer pays. Hidden fees or charges added after a buyer agrees to purchase are prohibited.
Dispute Resolution for Online Transactions in Nepal
Nepal's framework for online dispute resolution is still developing. The Department of Information Technology under the Ministry of Communication and Information Technology handles complaints related to the Electronic Transaction Act. For consumer protection disputes, the Department of Commerce, Supplies and Consumer Protection (DOCS-CP) is the relevant authority.
For practical purposes, most online transaction disputes in Nepal are currently resolved either through the platform's own dispute mechanism (such as Troverve's escrow dispute system) or through informal negotiation. Formal legal proceedings are time-consuming and expensive for small transactions.
Platforms like Troverve that include escrow and built-in dispute resolution effectively provide buyers and sellers with a faster, lower-cost alternative to formal legal channels for the vast majority of disputes.
What This Means for You as a Troverve Seller
When you list on Troverve, your video listing serves as your product disclosure — the law requires accurate representation, and video is the most accurate representation available. The escrow system ensures your payment is protected and dispute resolution is built in. And Troverve's verified seller onboarding helps ensure you are operating within Nepal's registration requirements.
We are not legal advisors, and this guide is for general information purposes only. If you have specific questions about your tax or registration obligations as an online seller, consult a certified public accountant or legal advisor registered in Nepal.
Ready to sell legally and safely on Nepal's most transparent marketplace? Join the Troverve seller waitlist at troverve.com.
