The Electronic Billing Related Regulation, 2074, as amended in 2076/09/09, outlines comprehensive standards for the use of electronic devices and software in issuing bills and maintaining records. These standards ensure that all billing systems are secure, transparent, and compliant with government requirements. This article provides a detailed overview of these standards to help businesses understand their obligations and implement them effectively.
1. Standards for Electronic Devices
Any electronic device used for issuing bills must meet specific criteria to ensure its reliability and compatibility with government monitoring systems.
Key Requirements:
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Data Storage and Accessibility:
All data entered into the device must be stored securely within the embedded software. The Inland Revenue Department (IRD) must have access to this data at any time for verification or audit purposes. -
Manufacturer and Distributor Information:
Each device must come with clear documentation containing:- Manufacturer’s name and contact details
- Distributor’s name and address
- Date of manufacture
- Warranty or usage period (if applicable)
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User Manual Availability:
A user manual must be provided either in Nepali or English, either printed or in digital format (e.g., PDF or help file). This ensures users can operate the device effectively. -
Compliance with Software Standards:
The device must be compatible with certified billing software that complies with Section 6 of the regulation. This includes proper integration and data exchange capabilities. -
Clarity on Technical Details:
The IRD may request further clarification regarding the software, database, and system architecture used in the device. Manufacturers must provide this information upon demand.
2. Standards for Software
The software used for electronic billing must adhere to strict technical and functional guidelines to ensure data integrity, security, and compliance with tax laws.
Key Requirements:
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Database Management System (DBMS) Compatibility:
The software must be built on a relational database management system (RDBMS) such as MySQL, PostgreSQL, or SQL Server. It should support queries written in Structured Query Language (SQL). -
Data Integrity and Immutability:
Once entered, data in the database must not be editable or deletable. Any corrections must be made through new entries that clearly indicate the changes, ensuring transparency and traceability. -
Audit Logging and Backup:
- Every transaction must be logged and archived (Log Archive Enabled).
- Regular backups of the database must be maintained to allow recovery in case of data loss or corruption.
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Detailed Record Keeping:
Each record in the database must include:- Timestamp of entry
- Identity of the user who entered the data
- Reason for any modifications
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Unique Invoice Generation:
Invoices must be generated sequentially within each fiscal year using the structure defined in Annexure–5, which includes fields like:- Fiscal Year
- Bill Number
- Customer Name and PAN
- Transaction Date
- Amount and Tax Details
- Payment Method
- Sync status with IRD
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Single Print Policy:
Each invoice can be printed only once. If reprinted for any reason, it must be marked clearly as “Copy of Original” or “Duplicate”, along with the number of times it has been printed. -
Legal Compliance in Invoice Format:
Invoices must follow formats specified in Annexure–6, including:- Full Tax Invoice
- Abbreviated Tax Invoice
- Simple Invoice (for income tax only)
These formats must align with the Value Added Tax Act, 2052, and other relevant laws.
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Cancellation Mechanism:
If an invoice needs to be canceled, the reason must be recorded, and the cancellation must be reflected in the database and reports. The Master Bill (Annexure–5) must also be updated accordingly. -
Reporting Capabilities:
The software must generate various reports such as:- Sales Report
- Audit Trail Report
- Credit/Debit Notes
- Reprint Records
- CBMS Sync Reports
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Export and Download Options:
Data from tables must be exportable in common formats like Excel (.xls), XML, or PDF via the front-end application. -
Backup and Security Measures:
Only authorized users should be able to perform backups of the database and log archives. This prevents unauthorized tampering or deletion of critical data. -
User Documentation:
A help file or user manual must be available in Nepali or English, both in print and embedded within the software. -
Integration with Central Monitoring System:
The software must be capable of transmitting real-time data to the Central Billing Monitoring System (CBMS) operated by the IRD. -
Automatic Transmission for Digital Payments:
When payments are made via electronic payment instruments (cards, mobile banking, etc.), the software must automatically transmit the following data to the payment service provider in accordance with Nepal Rastra Bank’s standards:- Seller’s PAN
- Invoice Number
- Total Amount
- VAT Amount
- 10% of VAT (refundable amount)
- Customer ID
- Transaction ID
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Activity Logging:
Every action performed by a user must be logged in an Audit Trail Report, including login/logout events and key transactions.
3. Cloud-Based Systems and Multi-Tenant Architecture
For cloud-based billing systems:
- The central server must be located in Nepal, and the IRD must have access to it.
- If the server is managed by a third party, a formal agreement must be submitted to the IRD outlining responsibilities related to data storage and access.
- The system must use Multi-Tenant Architecture, ensuring that data from different users remains isolated and secure.
4. Conclusion
The Electronic Billing Related Regulation, 2074 (Fourth Amendment) sets a robust framework for the use of electronic devices and software in financial transactions. These standards aim to enhance transparency, accountability, and efficiency in tax collection while reducing opportunities for fraud or manipulation.
Businesses adopting electronic billing systems must ensure full compliance with these standards to avoid penalties and maintain smooth operations. By embracing these digital tools, Nepal is moving toward a more digitized, accountable, and globally aligned tax administration system.
For businesses, staying updated with these regulations is not just a legal requirement but also a step toward operational excellence and customer trust in an increasingly digital economy.