Introduction
As more businesses in Nepal adopt electronic billing systems under the Electronic Billing Related Regulation, 2074, many are turning to software platforms that appear on the IRD-certified list. However, there’s a hidden danger: not all listed software is fully compliant with IRD standards.
Some platforms may have passed initial certification but fail to meet ongoing compliance requirements, especially after regulatory updates or amendments. This can lead to serious consequences during IRD inspections, including fines, legal action, or business suspension.
In this article, we’ll explore why non-compliant or partially compliant e-billing software can be disastrous for your business, and how to protect yourself from falling into this trap.
🚩 The Hidden Risk: Partial Compliance
The IRD maintains a public list of certified e-billing software, which businesses rely on when selecting a platform. But being listed doesn’t always mean the software:
- Is up-to-date with the latest amendments
- Meets all technical and operational requirements
- Has been tested for real-world use cases
- Continues to sync properly with the Central Billing Monitoring System (CBMS)
💡 Just like outdated tax rules or expired licenses, using a partially compliant system can still result in non-compliance penalties.
🔍 Common Signs of Non-Compliant E-Billing Software
Here are some red flags that your supposedly “certified” e-billing software might not be fully compliant:
1. Invoice Data Not Syncing with CBMS
If your bills aren’t syncing with the IRD’s Central Billing Monitoring System, you’re already at risk—even if the software claims to be compliant.
2. Editable or Deletable Invoice Records
One of the core principles of IRD compliance is data immutability. Any system allowing deletion or editing of invoices without proper audit logs is violating regulation.
3. No Audit Trail Logging
A compliant system must log every user action—like invoice generation, reprinting, or cancellation—with timestamps and user IDs.
4. Incorrect Invoice Format or Numbering
Using the wrong format or missing required fields (e.g., PAN number, fiscal year, bill number) can invalidate your invoices during an audit.
5. Outdated Reporting Tools
Software that doesn’t support exporting reports in Excel, PDF, or XML fails to meet reporting obligations set by the IRD.
6. Lack of Multi-Tenant Architecture for Cloud Systems
For cloud-based systems, storing data outside Nepal or failing to isolate client data violates security and location-based compliance rules.
⚖️ Consequences During IRD Inspection & Audit
During an IRD inspection or audit, businesses using non-compliant software may face:
✅ Penalties and Fines
- Fines ranging from Rs. 10,000 to Rs. 100,000
- Daily compounding fines for unresolved issues
✅ Tax Disallowance
- Sales recorded through non-compliant systems may be disallowed during VAT filing
✅ Business Suspension
- Temporary closure orders may be issued until compliance is achieved
✅ Legal Action
- Repeated violations can lead to criminal charges under the VAT Act
🧭 How to Verify True Compliance
Even if a software appears on the IRD list, here’s how to ensure it meets full compliance:
1. Check the Latest Amendments
Ensure the software supports the latest version of the Electronic Billing Related Regulation (2074, Fourth Amendment).
2. Test Sync with CBMS
Issue test bills and verify they appear on the IRD CBMS portal.
3. Review Audit Logs
Confirm whether all actions (invoice creation, reprinting, cancellations) are logged and time-stamped.
4. Generate Required Reports
Try exporting sales reports, audit trails, and CBMS sync logs to confirm they match IRD expectations.
5. Contact IRD Directly
If unsure, reach out to the IRD or your local tax office to confirm whether your software remains compliant.
🛡️ Best Practices to Stay Safe
To protect your business from compliance risks:
✅ Choose software with ongoing support and regular updates
✅ Train staff on compliance rules and audit procedures
✅ Monitor daily sync status with CBMS
✅ Keep backups of all data and logs
✅ Use only IRD-certified software from trusted providers
📌 Conclusion
Being listed on the IRD-certified software list is a good start—but it’s not a guarantee of full compliance. Many businesses unknowingly expose themselves to legal, financial, and operational risks by relying on outdated or partially compliant systems.
By understanding what true compliance looks like and taking proactive steps to verify it, you can protect your business from costly mistakes during IRD inspections and audits.
Remember: It’s not enough to just go digital—it has to be done right.
❓Frequently Asked Questions (FAQ)
Q: Is every software listed by IRD fully compliant?
A: No. Some may be outdated or lack full features required by amended regulations.
Q: Can I get fined for using listed but non-compliant software?
A: Yes. The responsibility lies with the business to ensure full compliance.
Q: How do I know if my software is syncing with CBMS?
A: Check the IRD CBMS portal or ask your software provider for sync verification tools.
Q: What should I do if I find out my software is non-compliant?
A: Switch to a verified, updated, and fully compliant alternative immediately.
Q: Does the IRD update its list regularly?
A: Yes, but not always in real-time. Always double-check compliance independently.