For years, billing in Nepal meant pre-printed bill books. Today the Inland Revenue Department (IRD) expects more and more businesses to issue bills through approved electronic billing software, and larger businesses are required to send each invoice to IRD's monitoring system as it is issued. Many owners are unsure what applies to them and what "compliant" actually means.
This guide explains the essentials in plain language. It is general information, not tax advice: IRD's thresholds and rules change, so always confirm the current requirements with IRD or your tax advisor.
What is electronic billing in Nepal?
Electronic billing means producing invoices from software rather than handwritten bill books. IRD sets rules for that software — for example, that bills are numbered in sequence, cannot be silently deleted or edited after issue, and that cancelled bills are handled through proper credit notes. IRD also runs a central billing monitoring system; businesses that fall under its requirements must connect their billing software so each sale is reported in real time.
Who needs to comply?
Requirements depend on things like annual turnover and business sector, and IRD revises them over time. In general:
- VAT-registered businesses must issue proper tax invoices showing VAT correctly.
- Businesses above IRD's turnover thresholds, and some specific sectors, must use IRD-approved billing software connected to IRD's monitoring system.
- Even where it isn't mandatory yet, using compliant software now avoids a rushed switch later.
What a correct tax invoice includes
- Your business name, address and PAN/VAT number.
- The buyer's name and, for business customers, their PAN.
- A sequential invoice number and the date (BS and/or AD).
- Each item with quantity, rate and amount, the taxable amount, VAT at 13%, and the total.
- For hotels and restaurants, the service charge shown correctly before VAT.
- A clear marking when a copy is reprinted, so it can't pass as a second original.
Common mistakes we see
- Editing or deleting bills. Corrections must go through a credit note, not by changing the original.
- Discounts that break the tax figures. A discount applied in the wrong place can produce negative rates or totals that don't add up.
- Rounding lines. Totals should add up exactly, without a mysterious "rounding" row.
- Group bills split wrongly. One group invoice should be one sale, with tax figures that match.
- Failed submissions nobody notices. If a bill doesn't reach IRD's system, someone must know and retry it.
How our software handles it
- SajhiloStay HMS registers every bill with IRD's system as it is taken, prints in the IRD tax-invoice layout, records customer PAN and business PAN/VAT, tracks reprinted copies, sends refunds as credit notes, and automatically retries any bill that failed to submit — with a clear status on each invoice.
- Smart Billing System gives shops and service businesses IRD-compliant VAT billing with stock, customers, suppliers and tax reports.
- Restaurant POS handles VAT billing for restaurants and cafés alongside table and kitchen management.
We've also written about choosing billing software for pharmacies, retail and restaurants.
Frequently asked questions
Can I keep using handwritten bill books?
It depends on your turnover and sector. Check IRD's current requirements; many businesses switch voluntarily because software bills are faster and reduce errors.
Does the software work if the internet is down?
Bills can still be issued, and submissions that couldn't reach IRD are retried automatically when the connection returns.
Will my accountant be able to use the reports?
Yes. Sales, VAT and credit-note reports export cleanly for your accountant and for VAT returns.
Not sure whether your billing is compliant? Contact OM IT Solutions and we'll review how you bill today and what to change.