Introduction
As Nepal accelerates its digital transformation, e-billing has become a mandatory requirement for businesses across the country. The Inland Revenue Department (IRD) introduced the Electronic Billing Related Regulation, 2074, to promote transparency, reduce tax evasion, and streamline financial reporting.
If you’re a business owner in Nepal—whether running a small shop, restaurant, or enterprise—it’s crucial to understand what e-billing entails, how to implement it, and most importantly, how to stay compliant with IRD standards.
This article serves as a comprehensive guide to help you navigate the world of e-billing in Nepal, including legal obligations, software requirements, compliance best practices, and common pitfalls to avoid.
What is E-Billing?
E-billing, or electronic billing, refers to the process of issuing, managing, and storing invoices digitally using certified software and devices. Unlike traditional paper-based billing, e-billing ensures that all transactions are recorded securely and can be audited by regulatory authorities like the IRD.
Why Was It Introduced?
- To curb tax evasion
- To digitize financial operations
- To improve transparency in business transactions
- To integrate digital payment systems with tax reporting
Who Must Use E-Billing?
According to the IRD, the following types of businesses must use e-billing:
- VAT-registered businesses
- Large-scale retailers
- Restaurants and cafes
- Service providers (e.g., salons, clinics)
- Exporters and importers
- Any business with an annual turnover above a certain threshold (as defined by the IRD)
Legal Framework: Electronic Billing Related Regulation, 2074
The Electronic Billing Related Regulation, 2074, outlines strict guidelines for businesses adopting e-billing systems. It was amended multiple times (in 2075 and 2076) to align with evolving technology and enforcement needs.
Key Highlights of the Regulation:
- All businesses must use IRD-certified e-billing software
- Devices used for billing must meet hardware and software standards
- Invoice data must be stored securely and made available to the IRD upon request
- Businesses must sync invoice data with the Central Billing Monitoring System (CBMS)
Failure to comply may result in fines, penalties, or even temporary closure of business operations.
IRD Certification: Why It Matters
Only IRD-certified e-billing software should be used by businesses in Nepal. These platforms undergo rigorous testing to ensure they meet all technical and operational requirements set by the department.
How to Verify Certification:
- Visit the official IRD website
- Check the list of approved e-billing software
- Confirm whether your chosen platform appears in the list
💡 Using uncertified software can lead to non-compliance and legal consequences.
Technical Requirements for E-Billing Systems
To ensure full compliance, both the hardware and software used for e-billing must adhere to IRD-mandated standards.
A. Hardware Standards
Key Requirements:
- Must store bill data securely within embedded software
- Should allow IRD access to data at any time
- Must include manufacturer/distributor details
- Must have a user manual in Nepali or English
- Must support integration with certified software
B. Software Standards
Core Features Required:
- Built on a relational database management system (RDBMS) such as MySQL or PostgreSQL
- Non-editable and non-deletable invoice records
- Audit trail logging of all actions
- Backup and recovery capabilities
- Invoice numbering per fiscal year (as per Annexure–5)
- One-time print policy (duplicates must be clearly labeled)
- Real-time syncing with CBMS
- Support for exporting reports in Excel, PDF, or XML
C. Cloud-Based Systems
For cloud-based billing:
- The server must be located in Nepal
- Data must be accessible to the IRD
- Must use multi-tenant architecture if serving multiple clients
- Third-party server agreements must be submitted to the IRD
How to Sync Your Billing System with CBMS
The Central Billing Monitoring System (CBMS) is a centralized portal maintained by the IRD to monitor and audit electronic bills issued across Nepal.
Steps to Sync:
- Choose IRD-certified e-billing software
- Complete registration with CBMS
- Configure software settings to enable automatic sync
- Issue a test bill and verify sync status via the IRD portal
🛠️ If sync fails, check internet connectivity, software configuration, and IRD server status.
Reporting Obligations Under IRD
All businesses using e-billing must generate and maintain detailed reports.
Common Reports Required:
- Sales Summary Report
- Tax Breakdown (VAT, Excise Duty)
- Audit Trail Log
- Reprint Records
- CBMS Sync Status Report
These reports must be exportable in Excel (.xls), PDF, or XML format and retained for at least five years.
Penalties for Non-Compliance
The IRD imposes strict penalties on businesses that fail to comply with e-billing regulations.
Possible Consequences:
- Fines ranging from Rs. 10,000 to Rs. 100,000
- Temporary suspension of business license
- Mandatory audit and inspection
- Public listing of non-compliant businesses
⚠️ Repeated violations can lead to permanent closure of the business.
Common Mistakes Businesses Make
Even well-intentioned businesses often make errors that lead to non-compliance. Here are some of the most common ones:
| Mistake | Risk |
|---|---|
| Using uncertified software | Penalty or audit |
| Editing or deleting invoices | Legal action |
| Printing duplicate bills without labeling | Misleading records |
| Not backing up data regularly | Loss of critical information |
| Ignoring audit logs | Incomplete compliance |
Best Practices for Staying Compliant
To avoid issues and ensure smooth operations:
✅ Choose IRD-certified software like BizPro E-Billing, Tigg, or Oneflow
✅ Train staff on proper usage and compliance rules
✅ Monitor daily sync status with CBMS
✅ Generate and retain required reports
✅ Perform regular backups of your database
✅ Stay updated with IRD notifications and regulation changes
Conclusion
E-billing is no longer optional for businesses in Nepal—it’s a legal requirement backed by strict enforcement from the Inland Revenue Department (IRD).
By understanding the regulatory framework, choosing the right software, and following best compliance practices, you can protect your business from penalties while embracing a more efficient and transparent way of doing business.
Digital billing not only helps you stay compliant but also improves customer trust, streamlines accounting, and prepares your business for future growth.
Frequently Asked Questions (FAQs)
Q: Is e-billing mandatory for all businesses in Nepal?
A: Yes, all VAT-registered businesses and those meeting specific turnover thresholds must use e-billing.
Q: Can I switch from one e-billing software to another?
A: Yes, but only to another IRD-certified platform, and you must ensure continuity of data.
Q: What happens if my bill doesn’t sync with IRD?
A: You should re-issue the bill after resolving the issue and ensure it gets synced as soon as possible.
Q: Do I need to print every bill?
A: While printing is encouraged for customer receipt, digital storage is mandatory.
Q: How long should I keep billing data?
A: At least five years, as per IRD guidelines.