Electronic Invoicing in Nepal: User’s View

Folks here in Nepal are still having hard time wrapping their heads around the digital signature concept. Some people really think cloud computing operates in the sky and digital signature is that signature picture file you put in the documents requiring sign off. I mean, Grow Up Peoples ! Some of these absurd benighted ideas have made its way to the Electronic Invoicing Directive issued by Inland Revenue Department in Nepal and that is the reason for this frustrating beginning of this blog.┬а

Nothing kills the momentum of a business transaction like paperwork. Leaving your work desk for signing a document, courier it to your client, receive it back after signing and making changes in case of any amendment, that takes a lot of time and administrative hassle. The use of digital signature will help minimize such inefficient administrative work. The same inefficiencies exist in invoicing as well. Print the bill pads, manually type in the contents in the bill in duplicates, maintain the duplicates, scan and courier the original invoices, stamp them, receive it back from client in case the invoice is rejected, lot of time have been consumed. That is some backward manual works with zero invoicing. And because of that, you would expect that the electronic invoicing method works efficiently. Well that is true, but not here in Nepal, it is equally ludicrous and preposterous and senseless compliances. 

Minimum Requirement of Law

Regarding Physical Invoice

Income Tax Act, 2058 and Income Tax Rules, 2059

рдирд┐рдпрдо реирей(рек): рд╕реНрдерд╛рдпреА рд▓реЗрдЦрд╛ рдирдореНрдмрд░ рд▓рд┐рдИ рд╡реНрдпрд╡рд╕рд╛рдп рдЧрд░реНрдиреЗ рдХрд░рджрд╛рддрд╛рд▓реЗ рдЖрдлреНрдиреЛ рдирд╛рдо, рдареЗрдЧрд╛рдирд╛ рддрдерд╛ рд╕реНрдерд╛рдпреА рд▓реЗрдЦрд╛ рдирдореНрдмрд░ рдЙрд▓реНрд▓реЗрдЦ рдЧрд░реА рд╕рд┐рд▓рд╕рд┐рд▓реЗрд╡рд╛рд░ рдирдореНрдмрд░ рд╕рд╣рд┐рддрдХреЛ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреБ рдкрд░реНрдиреЗрдЫ ред
Rule 23(4): A taxpayer who has received permanent account number and engaged in their business shall issue invoice with serial number mentioning their name, address and permanent account number.
Before the Income Tax (Sixth Amendment) Rules, 2073 (2016) effective from 2073.03.20 (04 July 2016), this provision was however not applicable to individual paying taxes in presumptive transasaction basis.┬а

VAT Act, 2052 and VAT Rules, 2053

рджрдлрд╛ резрек(рез): рдкреНрд░рддреНрдпреЗрдХ рджрд░реНрддрд╛ рднрдПрдХреЛ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рддреЛрдХрд┐рдП рдмрдореЛрдЬрд┐рдордХреЛ рдЕрд╡рд╕реНрдерд╛рдорд╛ рдмрд╛рд╣реЗрдХ рдХреБрдиреИ рд╡рд╕реНрддреБ рд╡рд╛ рд╕реЗрд╡рд╛ рдЖрдкреВрд░реНрддрд┐ рдЧрд░реНрджрд╛ рдкреНрд░рд╛рдкрдХрд▓рд╛рдИ рдмреАрдЬрдХ рджрд┐рдиреБ рдкрд░реНрдиреЗрдЫ ред
рджрдлрд╛ резрек(реи): рдмреАрдЬрдХрдХреЛ рдврд╛рдБрдЪрд╛ рддреЛрдХрд┐рдП рдмрдореЛрдЬрд┐рдо рд╣реБрдиреЗрдЫ ред┬а
рджрдлрд╛ резрек(рей): рдмреАрдЬрдХ рд▓рд┐рдиреБ рдкреНрд░рд╛рдкрдХрдХреЛ рдХрд░реНрддрд╡реНрдп рд╣реБрдиреЗрдЫ ред
рджрдлрд╛ резрек(рек): рджрд╢ рд╣рдЬрд╛рд░ рд░реБрдкреИрдпрд╛рдБрднрдиреНрджрд╛ рдмрдвреАрдХреЛ рдХрд░ рд▓рд╛рдЧреНрдиреЗ рд╡рд╕реНрддреБ рд╡рд┐рднрд╛рдЧрд▓реЗ рддреЛрдХреЗрдХреЛ рдХреНрд╖реЗрддреНрд░рдмрд╛рд╣рд┐рд░ рдвреБрд╡рд╛рдиреА рдЧрд░реНрдиреЗрд▓реЗ рдХрд░ рдмреАрдЬрдХ рд╕рд╛рдердорд╛ рд░рд╛рдЦреНрдиреБ рдкрд░реНрдиреЗрдЫ ред
рджрдлрд╛ резрек(рел): рд╡рд┐рднрд╛рдЧрд▓реЗ рд╕реВрдЪрдирд╛ рдкреНрд░рдХрд╛рд╢рди рдЧрд░реА рд╡рд╛ рд▓рд┐рдЦрд┐рдд рдЖрджреЗрд╢ рджрд┐рдИ рддреЛрдХреЗрдХреЛ рдХреБрдиреИ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рдХреБрдиреИ рддреЛрдХреЗрдХреЛ рд╡рд╕реНрддреБрдХреЛ рд╕реЛрд╣реА рд╕реВрдЪрдирд╛ рд╡рд╛ рдЖрджреЗрд╢рдорд╛ рддреЛрдХреЗрдХреЛ рд╕рдордпрд╛рд╡рдзрд┐рдХрд╛ рд▓рд╛рдЧрд┐ рддреНрдпрд╕реНрддреЛ рд╡рд╕реНрддреБрдХреЛ рдЦреБрджреНрд░рд╛ рдмрд┐рдХреНрд░реА рдореВрд▓реНрдп рд╕рд╛рд░реНрд╡рдЬрдирд┐рдХ рдЧрд░реНрдиреБрдкрд░реНрдиреЗ рдЧрд░реА рддреЛрдХреНрди рд╕рдХреНрдиреЗрдЫ ред рдпрд╕реНрддреЛ рд╕реВрдЪрдирд╛ рд╡рд╛ рдЖрджреЗрд╢ рдкреНрд░рд╛рдкреНрдд рднрдПрдкрдЫрд┐ рдЦреБрджреНрд░рд╛ рдмрд┐рдХреНрд░реА рдореВрд▓реНрдп рд╕рд╛рд░реНрд╡рдЬрдирд┐рдХ рдирдЧрд░реА рдХреБрдиреИ рд╡рд╕реНрддреБрдХреЛ рдмрд┐рдХреНрд░реА рд╡рд╛ рд╣рд╕реНрддрд╛рдиреНрддрд░рдг рдЧрд░реНрди рдкрд╛рдЙрдиреЗ рдЫреИрди ред
рджрдлрд╛ резрек(рем): рджрдлрд╛ резрек(рел) рдмрдореЛрдЬрд┐рдо рддреЛрдХрд┐рдПрдХреЛ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рддреНрдпрд╕реНрддреЛ рд╡рд╕реНрддреБ рджрд░реНрддрд╛ рдирднрдПрдХреЛ рд╡реНрдпрдХреНрддрд┐рд▓рд╛рдИ рдмрд┐рдХреНрд░реА рдЧрд░реНрджрд╛ рд╕рд╛рд░реНрд╡рдЬрдирд┐рдХ рднрдПрдХреЛ рдореВрд▓реНрдпрдорд╛ рддреЛрдХрд┐рдПрдХреЛ рдврд╛рдБрдЪрд╛рдорд╛ рдмреАрдЬрдХ рджрд┐рдИ рдЙрдкрднреЛрдХреНрддрд╛ рддрд╣рдХреЛ рдХрд░ рд╕рдореЗрдд рдЕрд╕реБрд▓ рдЙрдкрд░ рдЧрд░рд╛рдЙрдиреЗ рд╡реНрдпрд╡рд╕реНрдерд╛ рдЧрд░рд┐рдиреЗрдЫ ред рддрд░ рджрдлрд╛ резрек(рел) рдмрдореЛрдЬрд┐рдо рдирддреЛрдХрд┐рдПрдХреЛ рдХреБрдиреИ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рдкрдирд┐ рд╕реНрд╡реЗрдЪреНрдЫрд╛рд▓реЗ
рдпрд╕ рдЙрдкрджрдлрд╛ рдмрдореЛрдЬрд┐рдордХреЛ рдмреАрдЬрдХ рджрд┐рди рд╕рдХреНрдиреЗрдЫ ред
Section 14(1): Every registered person is required to issue an invoice to the recipient, in supplying any goods and services except in circumstances prescribed.
Section 14(2): The format of an invoice shall be as prescribed.
Section 14(3): It shall be the duty of the recipient to obtain an invoice.
Section 14(4): Invoice shall be kept by a person delivering taxable goods worth more than Ten Thousand Rupees in places other than that prescribed by the Department.
Section 14(5): The Department may, by publishing a notice or giving an order in writing, so specify that any person specified by such a notice or order has to make public the retail sale value or price of any such goods as specified in that order or notice for such period as specified therein. No sale or transfer of any goods shall be made without making public the retail sale price after the receipt of such a notice or order.
Section 14(6): Provision shall be made to require any person specified pursuant Section 14(5): in selling such goods to any unregistered persons, to issue invoices of the price made public in the specified format and also recover the tax at the consumer level. Provided that, any person not specified pursuant to Section 14(5) may issue invoices as referred to in this Sub-section in a prescribed format.

Regarding Electronic Invoicing

Income Tax Act, 2058 and Income Tax Rules, 2059

рджрдлрд╛ реорез(рек): рд╡рд┐рднрд╛рдЧрд▓реЗ рдорд╛рдкрджрдгреНрдб рд░ рдкреНрд░рдХреНрд░рд┐рдпрд╛ рддреЛрдХреА рдХреБрдиреИ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рд╡рд┐рджреНрдпреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрди рд░ рджрдлрд╛ реорез(рез) рдмрдореЛрдЬрд┐рдо рд░рд╛рдЦреНрдиреБ рдкрд░реНрдиреЗ рдХрд╛рдЧрдЬрд╛рддрд╣рд░реВ рд╡рд┐рджреНрдпреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рд░рд╛рдЦреНрди рд╕реНрд╡реАрдХреГрддрд┐ рджрд┐рди рд╕рдХреНрдиреЗрдЫ ред
Section 81(4): the Department may, upon prescribing the standards and procedures, give approval to any person to issue invoices through electronic means and to keep the documents required to be kept under Section 81(1) through electronic means.┬а

VAT Act, 2052 and VAT Rules, 2053

рджрдлрд╛ резрекрдХ(рез): рдХрд░рджрд╛рддрд╛рд▓реЗ рд╡рд┐рднрд╛рдЧрдХреЛ рдкреВрд░реНрд╡ рд╕реНрд╡реАрдХреГрддрд┐ рд▓рд┐рдИ рд╡рд┐рджреНрдпреБрддреАрдп рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрди рд╕рдХреНрдиреЗрдЫ ред
рджрдлрд╛ резрекрдХ(реи): рджрдлрд╛ резрекрдХ(рез) рдорд╛ рдЬреБрдирд╕реБрдХреИ рдХреБрд░рд╛ рд▓реЗрдЦрд┐рдПрдХреЛ рднрдП рддрд╛рдкрдирд┐ рд╡рд┐рднрд╛рдЧрд▓реЗ рд╕реВрдЪрдирд╛ рдкреНрд░рдХрд╛рд╢рди рдЧрд░реА рддреНрдпрд╕реНрддреЛ рд╕реВрдЪрдирд╛рдорд╛ рддреЛрдХрд┐рдПрдХрд╛ рдХрд░рджрд╛рддрд╛рд▓рд╛рдИ рдЕрдирд┐рд╡рд╛рд░реНрдп рд░реВрдкрдорд╛ рд╡рд┐рджреНрдпреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реА рддреНрдпрд╕реНрддреЛ рд╡рд┐рджреНрдпреБрддреАрдп рдорд╛рдзреНрдпрдорд▓рд╛рдИ рд╡рд┐рднрд╛рдЧрдХреЛ рдХреЗрдиреНрджреНрд░реАрдп рдмреАрдЬрдХ рдЕрдиреБрдЧрдорди рдкреНрд░рдгрд╛рд▓реА (рд╕рд┐рд╡рд┐рдПрдордПрд╕) рдорд╛ рдЖрд╡рджреНрдз рдЧрд░реНрди рдЖрджреЗрд╢ рджрд┐рди рд╕рдХреНрдиреЗрдЫ ред
рджрдлрд╛ резрекрдХ(рей): рд╡рд┐рджреНрдпреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреЗ рд╕рдлреНрдЯрд╡реЗрдпрд░ рд╡рд╛ рдЙрдкрдХрд░рдгрдХреЛ рд╕реБрд░рдХреНрд╖рдг рддрдерд╛ рд╡рд┐рд╢реНрд╡рд╕рдиреАрдпрддрд╛ рд╕рдореНрдмрдиреНрдзрдорд╛ рд╡рд┐рднрд╛рдЧрд▓реЗ рдХрд╛рд░реНрдпрд╡рд┐рдзрд┐ рдмрдирд╛рдИ рд▓рд╛рдЧреВ рдЧрд░реНрдиреЗрдЫ ред рддреНрдпрд╕реНрддреЛ рдХрд╛рд░реНрдпрд╡рд┐рдзрд┐ рд╕рдореНрдмрдиреНрдзрд┐рдд рдЙрддреНрдкрд╛рджрдХ, рд╡рд┐рддрд░рдХ рд░ рдкреНрд░рдпреЛрдЧрдХрд░реНрддрд╛рд▓реЗ рдкрд╛рд▓рдирд╛ рдЧрд░реНрдиреБ рдкрд░реНрдиреЗрдЫ ред
Section 14A(1): Taxpayer may issue electronic invoice upon obtaining prior approval of the Department.
Section 14A(2): Notwithstanding anything contained in Section 14A(1), Department may by publishing a notice, order taxpayers specified in the notice to compulsorily issue invoice through electronic medium and affiliate such electronic medium with Central Billing Monitoring System (CBMS) of Department.
Section 14A(3): Department shall prepare and implement procedure regarding security and credibility of the software or device used to issue invoice through electronic medium. Such procedure shall be followed by concerned producers, distributors and users.┬а

рджрдлрд╛ резремрдХ(рез): рдкреНрд░рдЪрд▓рд┐рдд рдХрд╛рдиреВрдирдорд╛ рдЬреБрдирд╕реБрдХреИ рдХреБрд░рд╛ рд▓реЗрдЦрд┐рдПрдХреЛ рднрдП рддрд╛рдкрдирд┐ рдЕрдиреНрдпрдерд╛ рдкреНрд░рдорд╛рдгрд┐рдд рднрдПрдорд╛ рдмрд╛рд╣реЗрдХ рдХрд░ рдкреНрд░рдпреЛрдЬрдирдХреЛ рдирд┐рдорд┐рддреНрдд рд╡рд┐рднрд╛рдЧ рд╡рд╛ рдЕрдиреНрддрд░реНрдЧрддрдХрд╛ рдХрд╛рд░реНрдпрд╛рд▓рдпрдорд╛ рд░рд╣реЗрдХрд╛ рдХрдореНрдкреНрдпреВрдЯрд░рдмрд╛рдЯ рдкреНрд░рд╢реЛрдзрд┐рдд рдХрд░рджрд╛рддрд╛ рд╕рдореНрдмрдиреНрдзреА рдЕрднрд┐рд▓реЗрдЦ рдкреНрд░рдорд╛рдгрдХреЛ рд░реВрдкрдорд╛ рдЧреНрд░рд╛рд╣реГрдп рд╣реБрдиреЗрдЫ ред
рджрдлрд╛ резремрдХ(реи): рд╡рд┐рднрд╛рдЧрд▓реЗ рд╕реВрдЪрдирд╛ рдкреНрд░рдХрд╛рд╢рди рдЧрд░реА рд╡рд┐рджреНрдпреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреЗ, рд▓реЗрдЦрд╛ рд░рд╛рдЦреНрдиреЗ, рдХрд░ рд╡рд┐рд╡рд░рдг рдкреЗрд╢ рдЧрд░реНрдиреЗ рддрдерд╛ рднреБрдХреНрддрд╛рдиреА рдЧрд░реНрдиреЗ рд╕рдореНрдмрдиреНрдзрдорд╛ рдЖрд╡рд╢реНрдпрдХ рд╡реНрдпрд╡рд╕реНрдерд╛ рдЧрд░реНрди рд╕рдХреНрдиреЗрдЫ ред
Section 16A(1): Notwithstanding anything contained in the prevailing law the record of taxpayer generated from the database recorded in computer of Department or Offices thereunder shall be acceptable as evidence for purposes of tax, except it is otherwise proved.
Section 16A(2): Department may, by publishing a notice, make necessary provision regarding issuing invoice, audit, filing tax returns and payment through electronic medium.┬а

рдирд┐рдпрдо резреордХ: рд╡рд┐рднрд╛рдЧрд▓реЗ рдХреБрдиреИ рдХрд░рджрд╛рддрд╛рд▓реЗ рдХреНрдпрд╛рд╕ рдореЗрд╢рд┐рди рдкреНрд░рдпреЛрдЧ рдЧрд░реНрдиреБрдкрд░реНрдиреЗ рдЧрд░реА рддреЛрдХреНрди рд╕рдХреНрдиреЗрдЫ рд░ рддреНрдпрд╕рд░реА рддреЛрдХрд┐рдПрдХреЛрдорд╛ рддреНрдпрд╕реНрддреЛ рдХрд░рджрд╛рддрд╛рд▓реЗ рдХрд╛рд░реЛрдмрд╛рд░ рдЧрд░реНрджрд╛ рдХреНрдпрд╛рд╢ рдореЗрд╢рд┐рдирдХреЛ рдкреНрд░рдпреЛрдЧ рдЧрд░реА рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреБ рдкрд░реНрдиреЗрдЫ ред
рддрд░ рд╡рд┐рдзреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрди рд╕реНрд╡реАрдХреГрддреА рдкреНрд░рд╛рдкреНрдд рдХрд░рджрд╛рддрд╛рд▓реЗ рд╕реЛрд╣реА рдмрдореЛрдЬрд┐рдо рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреБ рдкрд░реНрдиреЗрдЫ ред┬а
Rule 18A: Department may notify requiring any taxpayer to use cash machine and such taxpayer so notified shall use cash machine to issue invoice for transaction. However, taxpayer who has obtained approval for raising invoice through electronic medium shall raise invoice accordingly.

рдирд┐рдпрдо реирез: рдЖрдкреВрд░реНрддрд┐рдХрд░реНрддрд╛рд▓реЗ рдХреБрдиреИ рд╡рд╕реНрддреБ рд╡рд╛ рд╕реЗрд╡рд╛рдХреЛ рдЖрдкреВрд░реНрддрд┐ рдЧрд░реНрджрд╛ рддреНрдпрд╕рдХреЛ рдкреНрд░рддрд┐рдлрд▓ рдмрд╛рдкрдд рдкреНрд░рд╛рдкрдХрдмрд╛рдЯ рдкрд░рд┐рд╡рддреНрд░реНрдп рд╡рд┐рджреЗрд╢реА рдореБрджреНрд░рд╛ рднреБрдХреНрддрд╛рдиреА рд▓рд┐рдИ рдХрд░ рдмреАрдЬрдХ рджрд┐рдБрджрд╛ рдХрд╛рд░реЛрдмрд╛рд░ рднрдПрдХреЛ рджрд┐рдирдХреЛ рдиреЗрдкрд╛рд▓ рд░рд╛рд╖реНрдЯреНрд░ рдмреИрдЩреНрдХрд▓реЗ рддреЛрдХреЗрдХреЛ рд╡рд┐рдирд┐рдордп┬а рджрд░ рдмрдореЛрдЬрд┐рдо рдЙрдХреНрдд рд╡рд┐рджреЗрд╢реА рдореБрджреНрд░рд╛ рдмрд░рд╛рдмрд░ рд╣реБрдиреЗ рдиреЗрдкрд╛рд▓реА рд░реБрдкреИрдпрд╛рдБрдХреЛ рд░рдХрдо рдХрд░
рдмреАрдЬрдХрдорд╛ рдЙрд▓реНрд▓реЗрдЦ рдЧрд░реА рдмреАрдЬрдХ рджрд┐рдиреБ рдкрд░реНрдиреЗрдЫ ред
Rule 21: While issuing the tax invoice by a supplier upon receiving payment from the recipient in a convertible foreign currency as consideration of the supply of any goods or services, the supplier shall issue the tax invoice by mentioning therein the amount in Nepalese rupees equivalent to the foreign currency according to the rate of exchange prescribed by the Nepal Rastra Bank on the day of transaction.

рджрдлрд╛ реиреп(рез)(рдЫреи): рд╡рд┐рджреНрдпреБрддреАрдп рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрди рд╕реНрд╡реАрдХреГрддрд┐ рд▓рд┐рдПрдХреЛ рд╡рд╛ рд╕реНрд╡реАрдХреГрддрд┐ рдирд▓рд┐рдПрдХреЛ рдХрд░рджрд╛рддрд╛рд▓реЗ рддрдереНрдореЗрдпрд╛рдВрдХ рдореЗрдЯреНрди рд╡рд╛ рд╕рдЪреНрдпрд╛рдЙрди рд╕рдХрд┐рдиреЗ рд╕рдлреНрдЯрд╡реЗрдпрд░ рдкреНрд░рдпреЛрдЧ рдЧрд░реЗрдХреЛ рдкрд╛рдЗрдПрдорд╛ рдкрд╛рдБрдЪ рд▓рд╛рдЦ рд░реБрдкреИрдпрд╛рдБ рдЬрд░реАрд╡рд╛рдирд╛ рд▓рд╛рдЧреНрдиреЗ ред
Section 29(1)(Chha2): If a taxpayer issuing electronic invoice upon approval or without approval is found using software for erasing or amending the data, then a fine of Five Lakh Rupees is applicable.┬а

рдирд┐рдпрдо резрен(рез): рджрд░реНрддрд╛ рднрдПрдХреЛ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рдХреБрдиреИ рд╡рд╕реНрддреБ рд╡рд╛ рд╕реЗрд╡рд╛ рдЖрдкреВрд░реНрддрд┐ рдЧрд░реНрджрд╛ рдХрд░ рдЕрдзрд┐рдХреГрддрд▓реЗ рдЕрдиреНрдпрдерд╛ рд╕реНрд╡реАрдХреГрдд рдЧрд░реЗ рджреЗрдЦрд┐ рдмрд╛рд╣реЗрдХ рдкреНрд░рд╛рдкрдХрд▓рд╛рдИ рдЕрдиреБрд╕реВрдЪреАтАУрел рд░ релрдХ. рдмрдореЛрдЬрд┐рдордХреЛ рдврд╛рдБрдЪрд╛рдорд╛ рдХрд░ рдмреАрдЬрдХ рджрд┐рдиреБ рдкрд░реНрдиреЗрдЫ ред рддреНрдпрд╕рд░реА рдХрд░ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрджрд╛ рдХреБрдиреИ рд╡рд╕реНрддреБрдХреЛ рдХрд┐рд╕рд┐рдо, рд╕рд╛рдЗрдЬ, рдореЛрдбрд▓ рд░ рдмреНрд░рд╛рдгреНрдб рднрдПрдорд╛ рд╕реЛ рдЦреБрд▓рд╛рдЙрдиреБ рдкрд░реНрдиреЗрдЫ ред
рдирд┐рдпрдо резрен(резрдХ): рдирд┐рдпрдо резрен(рез) рдорд╛ рдЬреБрдирд╕реБрдХреИ рдХреБрд░рд╛ рд▓реЗрдЦрд┐рдПрдХреЛ рднрдП рддрд╛рдкрдирд┐ рдРрдирдХреЛ рджрдлрд╛ резрек(рем) рдмрдореЛрдЬрд┐рдо рд╡рд╕реНрддреБ рд╡рд╛ рд╕реЗрд╡рд╛рдХреЛ рдмрд┐рдХреНрд░реА рдЧрд░реНрджрд╛ рдЕрдиреБрд╕реВрдЪреАтАУрелрдЦ. рдорд╛ рдЙрд▓реНрд▓рд┐рдЦрд┐рдд рд╡рд┐рд╡рд░рдг рдмрдореЛрдЬрд┐рдордХреЛ рдХрд░ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреБрдкрд░реНрдиреЗрдЫ ред
рдирд┐рдпрдо резрен(реи): рдЙрдкрдирд┐рдпрдо (рез) рдмрдореЛрдЬрд┐рдо рдкреНрд░рд╛рдкрдХрд▓рд╛рдИ рджрд┐рдЗрдиреЗ рдмреАрдЬрдХрдХреЛ рдореБрдЦ рдкреГрд╖реНрдардорд╛ рджреЗрдЦрд┐рдиреЗ рдЧрд░реА рдкреНрд░рд╖реНрдЯрд╕рдБрдЧ рдХрд░ рдмреАрдЬрдХ рд▓реЗрдЦрд┐рдПрдХреЛ рд╣реБрдиреБ рдкрд░реНрдиреЗрдЫ ред рдпрд╕реНрддреЛ рдХрд░ рдмреАрдЬрдХрдХреЛ рддреАрди рдкреНрд░рддрд┐ рддрдпрд╛рд░ рдЧрд░реА рддреНрдпрд╕рдХреЛ рд╕рдХреНрдХрд▓ рдкреНрд░рддрд┐ рдкреНрд░рд╛рдкрдХрд▓рд╛рдИ рджрд┐рдиреЗ, рджреЛрд╕реНрд░реЛ рдкреНрд░рддрд┐ рдХрд╛рд░реНрдпрд╛рд▓рдпрд▓реЗ рдорд╛рдЧ рдЧрд░реЗрдХрд╛ рдмрдЦрдд рдкреЗрд╢ рдЧрд░реНрдиреЗ рдЧрд░реА рдЫреБрдЯреНрдЯреИ рдЕрднрд┐рд▓реЗрдЦ рдЦрдбрд╛ рдЧрд░реА рд░рд╛рдЦреНрдиреЗ рд░ рддреЗрд╕реНрд░реЛ рдкреНрд░рддрд┐ рджрд░реНрддрд╛ рднрдПрдХреЛ рд╡реНрдпрдХреНрддрд┐рд▓реЗ рдЖрдкреНmрдиреЛ рдХрд╛рд░реЛрдмрд╛рд░ рдкреНрд░рдпреЛрдЬрдирдХреЛ рдирд┐рдорд┐рддреНрдд рдЕрднрд┐рд▓реЗрдЦ рдЦрдбрд╛ рдЧрд░реА рд░рд╛рдЦреНрдиреЗ рд╡реНрдпрд╡рд╕реНрдерд╛ рдЧрд░реНрдиреБ рдкрд░реНрдиреЗрдЫ ред
Rule 17(1): Unless otherwise approved by the Tax Officer, the registered person, in supplying any goods or services, shall issue a tax invoice in the format as set forth in Schedule 5 and 5A. Invoice issued accordingly shall disclose type, size, model and brand of any goods, if any.
Rule 17(1A): Notwithstanding anything contained in Sub-rule (1), when goods or services are sold under Section 14(6) of the Act, tax invoices shall be issued as per the details referred to in Schedule 5B.
Rule 17(2): Tax invoice shall be written clearly and conspicuously on the front page of the invoice to be issued to the recipient under Rule 17(1). Such tax invoices shall be prepared in three copies, and the original copy shall be given to the recipient, the second copy to be separately recorded so that it can be produced as and when asked for by the Office and the third copy be recorded by the registered person for the purpose of their transaction.

рдирд┐рдпрдо реирел: рдЦрд░рд┐рдж рддрдерд╛ рдмрд┐рдХреНрд░реА рдЦрд╛рддрд╛ рдкреНрд░рдорд╛рдгрд┐рдд рд╕рдореНрдмрдиреНрдзреА рд╡реНрдпрд╡рд╕реНрдерд╛рдГ рдРрдирдХреЛ рджрдлрд╛ резрем(рей) рдмрдореЛрдЬрд┐рдо рдХрд░ рдЕрдзрд┐рдХреГрддрд▓реЗ рдЦрд░рд┐рдж рддрдерд╛ рдмрд┐рдХреНрд░реА рдЦрд╛рддрд╛ рдкреНрд░рдорд╛рдгрд┐рдд рдЧрд░реНрджрд╛ рджреЗрд╣рд╛рдп рдмрдореЛрдЬрд┐рдо рдкреНрд░рдорд╛рдгрд┐рдд рдЧрд░реНрдиреБ рдкрд░реНрдиреЗрдЫ: (рдХ) рдХрд░рджрд╛рддрд╛рд▓реЗ рдЦрд░рд┐рдж рддрдерд╛ рдмрд┐рдХреНрд░реА рдЦрд╛рддрд╛ рдкреНрд░рдорд╛рдгрд┐рдд рдЧрд░реНрдирдХреЛ рд▓рд╛рдЧрд┐ рдХрд╛рд░реНрдпрд╛рд▓рдпрдорд╛ рдирд┐рд╡реЗрджрди рджрд┐рдПрдорд╛, (рдЦ) рдХрд░ рдкрд░реАрдХреНрд╖рдг рд╡рд╛ рдЬрд╛рдБрдЪрдХреЛ рдЕрд╡рдзрд┐рдорд╛ , (рдЧ) рдирд┐рд░реАрдХреНрд╖рдгрдХреЛ рд╕рдордпрдорд╛ ред рддрд░┬а рд╡рд┐рдзреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рдмреАрдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрди рдЕрдиреБрдорддрд┐ рд▓рд┐рдПрдХреЛ рдХрд░рджрд╛рддрд╛рдХреЛ рд╡рд┐рдзреБрддреАрдп рдкреНрд░рдгрд╛рд▓реАрдмрд╛рдЯ рдиреИ рд╕реНрд╡рддрдГ рдмрд┐рдХреНрд░реА рдЦрд╛рддрд╛ рддрдпрд╛рд░ рд╣реБрдиреЗ рднрдПрдорд╛ рдмрд┐рдХреНрд░реА рдЦрд╛рддрд╛ рдкреНрд░рдорд╛рдгрд┐рдд рдЧрд░рд╛рдЙрдиреБрдкрд░реНрдиреЗ рдЫреИрди ред┬а
Rule 25:┬аWhile certifying the purchase and sales books pursuant to Section 16(3) the Act, Tax Officer shall certify as follows: (a) If the taxpayer files an application to the Office for certification of the purchase and sales books, (b) During the period of tax inspection or audit, (c) At the time of inspection. However, taxpayer who has obtained approval to issue invoice from electronic medium shall not be required to certify their sales book if the sales book is prepared automatically by the electronic medium of the taxpayer.┬а

Electronic Billing Directive, 2074

Electronic Billing Directive is pretty lengthy. You can find the full text here: Electronic Billing Directive. Here we will discuss only the issues that are revelant or highlight the red flags if any.┬а

What is the scope of Electronic Billing Directive? How has the term “Electronic Billing” been defined?
рдЦрдгреНрдб реи(рдХ): “рд╕рдлреНрдЯрд╡реЗрдпрд░” рднрдиреНрдирд╛рд▓реЗ рд╡рд┐рдзреБрддреАрдп рдорд╛рдзреНрдпрдо рдкреНрд░рдпреЛрдЧ рдЧрд░реА рдмрд┐рдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреЗ рд╡рд╛ рддрддреНрд╕рдореНрдмрдиреНрдзрд┐ рд▓реЗрдЦрд╛ рд░рд╛рдЦреНрдиреЗ рдкреНрд░рдпреЛрдЬрдирдХрд╛ рд▓рд╛рдЧрд┐ рдкреНрд░рдпреЛрдЧ рдЧрд░рд┐рдПрдХреЛ рд╡рд┐рдзреБрддреАрдп рдЙрдкрдХрд░рдгрдорд╛ рдЬрдбрд┐рдд рд╕рдлреНрдЯрд╡реЗрдпрд░ рд╕рдВрд╕реНрдХрд░рдг (Software Version) рд╕рдореНрдЭрдиреБрдкрд░реНрдЫ ред
рдЦрдгреНрдб реи(рдЦ): тАЬрдмрд┐рджреНрдпрддреБреАрдп рдЙрдкрдХрд░рдгтАЭ рднрдиреНрдирд╛рд▓реЗ рд╡рд┐рдзреБрддреАрдп рдорд╛рдзреНрдпрдордмрд╛рдЯ рд╡рд┐рдЬрдХ рдЬрд╛рд░реА рдЧрд░реНрдиреЗ рд╡рд╛ рддрддреНрд╕рдореНрдмрдиреНрдзрд┐ рд▓реЗрдЦрд╛ рд░рд╛рдЦреНрдиреЗ рдкреНрд░рдпреЛрдЬрдирдХрд╛ рд▓рд╛рдЧрд┐ рдкреНрд░рдпреЛрдЧ рдЧрд░рд┐рдиреЗ рдЙрдкрдХрд░рдг рд╕рдореНрдЭрдиреБ рдкрд░реНрджрдЫред рдпрд╕рд▓реЗ рд╕рдлреНрдЯрд╡реЗрдпрд░ рдЬрдбрд┐рдд рдмрд┐рд▓рд┐рдВрдЧ рдореЗрд╕рд┐рди, рдХреНрдпрд╛рд╕ рд░рдЬрд┐рд╕реНрдЯрд░, рдкреЛрдЗрдиреНрдЯ рдЕрдл рд╕реЗрд▓, рдХреНрдпрд╛рд▓рдХреБрд▓реЗрдЯрд░ рд╡рд╛ рдпрд╕реНрддреИ рдХрд┐рд╕рд┐рдордХрд╛ рд╕рдлреНрдЯрд╡реЗрдпрд░ рдЬрдбрд┐рдд рдЕрдиреНрдп рдЙрдкрдХрд░рдг рд╕рдореЗрддрд▓рд╛рдИ рдЬрдирд╛рдЙрдБрджрдЫ ред ┬а
рдЦрдгреНрдб реи(рдб): тАЬрд╡рд┐рдзреБрддреАрдп рдмрд┐рдЬрдХтАЭ рднрдиреНрдирд╛рд▓реЗ рд╡рд┐рдзреБрддреАрдп рдЙрдкрдХрд░рдгрдХреЛ рдкреНрд░рдпреЛрдЧ рдЧрд░реА рд╕рдлреНрдЯрд╡реЗрдпрд░ рдорд╛рд░реНрдлрдд рдЬрд╛рд░реА рд╣реБрдиреЗ рд╡рд┐рдЬрдХрд▓рд╛рдИ рдЬрдирд╛рдЙрдБрджрдЫ ред

Frequently Asked Questions on Electronic Billing

Q1: Can I use any billing software for issuing electronic billing?
A1: No only the IRD approved softwares can be used for electronic billing. The list of approved softwares can be found here:┬аIRD Approved Billing Softwares

Q2: Can even foreign softwares and open source softwares be listed as approved billing softwares?
A2: Yes. The software developer or maintainer should apply to IRD to obtain such approval. If such foreign softwares do not have authorized distributors in Nepal then the user themselves can apply for the approval of such softwares.┬а

Q3: Can I use different billing softwares in different branches of same entity?
A3: No this is not under Part 4 of the Electronic Billing Directive.┬а

Q4: Can I create backdated invoice from electronic billing softwares?
A4: Yes, backdated invoices can be created but there will be a creation timestamp in any invoice. Additionally, the backdated invoice cannot be dated earlier than the previous invoice. The minimum requirement is that the invoice should be serial numbered and created in chronological order. This is also how the developers are expected to create the billing software.┬а

Q5: IRD requires the source code of the software to be submitted to IRD for approval? Does not this go against Trade Secret/undisclosed information chapter of Trade Related Aspect Of Intellectual Property-TRIPS Agreement? Does this violate Doctrine Of Relevancy or Doctrine of Legitimate Expectation?
A5: Supreme Court has decided on this matter that it is not in violation of TRIPS agreement and doesn’t go against the Doctrine Of Relevancy or Doctrine of Legitimate Expectation. See the full case here: Rajiv Jung Shah v/s Inland Revenue Department

Q6: Why does Electronic Billing Directive, 2074 consider primitive device like “cash register” as electronic billing equipment?
Q7: Cash Register is not a primitive device. Its a preety smart device to be honest at least the mechanics behind it. In a cash register machine, a seller enters the item and price details and the amount received from customer and the machine automatically allots the money into slots and also seperates the tender amount to be provided to the customer. Some cash machines are more than that. They even have the capacity to act like a POS machine. It can provide the invoice alongwith using the software along with it. Where such softwares capeable of invoicing is installed in the machine, such softwares need to be approved by IRD before issuing valid electronic invoice. Such machines have memory fitted inside it, called fiscal memory that maintains the duplicate rolls or data log of all the transactions made for the purpose of tax authorities. So they are also sometimes called fiscal printers.┬а

Types of Invoicing Solutions in Nepal

Not Using Electronic Billing

Manual & Physical Invoice (i.e. Wet Ink Contents)

A company is not using electronic invoicing. Rather the company is using pre-printed bill pads and uses carbon to create concurrent duplicates of the invoice and staffs creates invoices manually. What are the minimum requirement the company has to fulfill to issue invoice?

  1. Company A gets the invoice printed in format specified by Income Tax and VAT Act. Such invoices are not required to be pre-attested by tax authorities.
  2. Company A is not required to pre-print the serial number of the invoice in the invoice pad itself. This is not required by Income Tax Act or VAT Act. However, pre-printing the serial number is generally the practice as it helps in the avoiding human errors in the numbering.
  3. Company A has to physically create the invoice and using carbon create the invoices in duplicate/triplicate copies. The original invoice is issued to the recepient of the goods/service.┬а

Automatic & Physical Invoice (i.e. Dot Matrix Contents / Thermal Printing Contents)

A company is not using electronic invoicing. Rather the company is using pre-printed bill pads and uses carbon to create concurrent duplicates of the invoice and staffs uses dot matrix printer to dot print the contents of the invoice (like using a cheque writing machine). What are the minimum requirement the company has to fulfill to issue invoice?

  1. Company A gets the invoice printed in format specified by Income Tax and VAT Act. Such invoices are not required to be pre-attested by tax authorities. However, since the company is using dot matrix printer to print invoices in duplicates, the invoices should be Carbonless copy paper (CCP) so that the dot matrix printer can print all copies at once.
  2. Company A can use the softwares like Excel / printer settings to arrange the print settings. This should not be viewed as using software for printing the invoice because excel is a software that allows to perform mathematical functions on the data and print them. Utilizing excel’s untweaked utilities to print automatically is just the same as utilizing excel software to get any other mathematical operations made. Also this is a no brainer, utilizing cheque writer to create cheques is not equivalent to doing electronic transacitons. This should never be a confusion or an issue.
  3. Company A is not required to pre-print the serial number of the invoice in the invoice pad itself. This is not required by Income Tax Act or VAT Act. However, pre-printing the serial number is generally the practice as it helps in the avoiding human errors in the numbering.
  4. This method is very effective to companies who are intending to increase administrative efficiency. A good dot matrix printer costing around 30k NPR and excel / google spreadhseets can resolve the need to go into the electronic invoicing realm altogether.
  5. Let’s say Company A has huge office space. Some sales are made from warehouse, some sales are made from accounts office, some sales are made from the shop. Although within the same location, the coordication issue is getting very severe. Folks from warehouse, accounts and display shop are having hard time running around with invoice pads. This method could solve the problem altogether. Place multiple dot matrix printers at each billing unit and create communicate the latest invoice number (though manual cmmunicaiton or through shared invoicing template) among the billing units and raise physical invoices.┬а
    Efficiency 101

Using Electronic Billing

Think carefully before entering into electronic invoicing decision, in Nepal, because of the following reasons:

  1. The invoicing software prevalent in Nepal could easily cost you around Rs. 20,000 even at the starter packages.
  2. The invoicing software prevalent in Nepal are not very efficient or user friendly and there is not much exceptional customer services.
  3. If you want to change the billing software, it is going to be a rather lengthy process as there is no standard procedure to change the software.
  4. IRD has not clearly provided any clear provision for exiting the electronic billing requirement. So exiting from electronic billing to manual invoicing could create a lots of problems.
  5. There is not much awareness on the recipient of the invoices regarding electronic invoices so the buyers will definitely in most cases require you to wet sign the invoice and produce company stamp in the invoice. They also may require the hardcopy invoice to process your payment, which is another deal breaker. I mean, why go through such a long process of electronic invoicing, if at the end, you will ultimately have to deliver the hardcopy invoices to the recipient.
  6. The fines for non-compliance of electronic invoicing guideline is very high.
  7. There is no public available API provided by IRD for linking with the IRD Central Billing Monitoring System. One has to manually go and request API with IRD. This has led to lack of interest among the developers to experiment with open source billing software.
  8. Even approved electronic software have not adopted digital signature modules. IRD also hasn’t worked on any such digital verification of the invoices. This has led to the recipients not being confident if the invoice being raised to them actually the valid / authentic invoice.┬а

Is there any open source IRD approved invoicing software for use of general public free of cost?

There are many open source erp and invoicing tools like:
1. ApacheOfBiz,
2. YetiForce,
3. Zenbership,
4. Dolibarr,
5. BoxBilling,
6. InvoiceNinja,
7. Prestashop etc.
My personal favourite is InvoiceNinja which is so much in sync with the domain, emails, functionality and all. See its full funtionality here: Free Open-Source Invoicing, Expenses & Time-Tracking | Invoice Ninja

But sadly there aren’t any open source IRD approved invoicing softwares. I have been tweaking InvoiceNinja to compliance of IRD, and approval. Keep following my post, I will soon post about the completion and approval of this pet project.