Notwithstanding anything contained in other rules of this regulation, the following expenses shall not be included in current operating expenses or capital expenses:-
(a) Expenditures not limited to the following:
(1) The cost of work performed directly by the petroleum industry shall not exceed the actual cost, and such cost shall not exceed the competitive rate charged by an unrelated third party for the same work.
(2) The overhead expenses incurred within Nepal should not be more than the actual expenses.
(3) The overhead expenses incurred by the petroleum industry (and all entities associated with the petroleum industry) outside Nepal shall not exceed the annual amount approved in advance by the Government of Nepal. Such amount shall in no case exceed the following limits:- Except for the overhead expenses incurred outside Nepal, the section of the annual expenses of the overhead expenses up to 10,00,000 dirhams - 5 percent From 10,00,000 to 50,000,000 dollars - 3 percent 50,000 ,000 to $2,00,00,000 – 1 percent Above $2,00,00,000 – 0.25 percent
(4) The expenses incurred for the goods and services of the contractors shall not exceed the actual expenses and shall not exceed the competitive rates charged by an unrelated third party at the time of contracting for such goods and services.
(5) Expenditure incurred in acquiring or hiring goods, equipment and other materials and construction of facilities shall not exceed the actual cost and the cost of construction of such goods shall not exceed the established and competitive price and no mark-up or mark-up on such expenditure shall be incurred by the petroleum industry or its Must not include commissions received by any affiliated companies.
(6) The rate of interest, fees and commissions for loans and guarantees should not exceed the prevailing competitive rates in transactions with closely related third parties.
(b) Expenditure not directly related to the petroleum work in the contract area according to the petroleum contract.
(c) Income tax or penalty paid in Nepal or foreign countries.
(d) Sale of petroleum outside Nepalexpenses and transportation, storage, handling and export expenses of petroleum outside the export center of Nepal.
(e) All expenses that fall within the definition of petroleum expenses according to the petroleum agreement but are not included in the statement of petroleum expenses given to the Government of Nepal.
(f) Losses arising from contracts of insurance or protection.
(g) Personal expenses, gift or donation.
(h) Expenditure incurred prior to completion of the petroleum contract.
(i) Losses related to foreign exchange other than losses related to foreign exchange regulations caused by changes in the exchange rate of the dollar and the Nepalese currency.
(j) Bonus paid to Government of Nepal