IRD e-billing in Nepal: what to automate and what to leave alone

If your business turns over more than Rs 200 million a year, the Inland Revenue Department (IRD) now expects every invoice you issue to go through certified billing software and land in its Central Billing Monitoring System (CBMS) as it is issued. The FY 2083/84 budget points the line lower, to Rs 100 million. Most of that pipeline can be automated. A few decisions should stay with a person.

This post covers who is in scope, what the software has to do, how the data actually flows, and where we'd draw the automation line. It's general information for business owners, not tax advice. The threshold has moved three times in under three years, so confirm your own position with your auditor or tax office.

What is CBMS, and why does IRD want your invoices?

CBMS is IRD's central server for sales data. Certified billing software sends each invoice to it at the moment of issue, so the department sees your sales as they happen instead of waiting for the monthly VAT return. The target is fake and duplicate VAT bills and sales that never get reported, according to myRepublica's report on the 2023 expansion.

It isn't new. The system started as a pilot on 17 November 2017 and became mandatory for about 600 large taxpayers in FY 2018/19. What has changed is how far down the turnover ladder it reaches.

Who has to connect: Rs 250, 200 or 100 million?

You'll find all three numbers online, and each was true at some point. That's why older articles disagree with newer ones.

• Rs 250 million: IRD's December 2023 notice extended CBMS to businesses above this annual turnover (myRepublica, Fiscal Nepal).
• Rs 200 million: in mid-April 2026 IRD lowered the line to Rs 20 crore, as reported by ICT Frame and tax firm N. Ghimire & Associates. ICT Frame notes that banks and financial institutions are currently exempt because Nepal Rastra Bank already supervises them.
• Rs 100 million: the FY 2083/84 budget, presented in late May 2026, said businesses above Rs 10 crore that use e-billing will be linked to CBMS (Clickmandu).

The most authoritative figure in force is IRD's decision at Rs 200 million. The Rs 100 million line is a budget announcement, and as reported it covers businesses that already issue electronic bills, not everyone above that turnover. As of mid-September 2026 we haven't seen a separate IRD notice giving it a start date. If you sit between Rs 100 and 200 million, plan as if you'll be in scope this fiscal year.

What does IRD-approved billing software have to do?

The Electronic Billing Procedure, 2074, now on its fourth amendment, sets the rules. Billing software and equipment must be enlisted with IRD, a business needs approval to issue electronic bills, and there are separate requirements for the software, the hardware and cloud-hosted setups. IRD publishes the list of enlisted software, and tax firms such as Baker Tilly Nepal republish it.

In practice, an issued invoice can't be quietly edited or deleted. Corrections go through a credit note, and the audit trail shows who did what and when. The invoice still has to carry the contents the VAT Rules, 2053 require: seller and buyer names and PAN, a serial number, the date, item descriptions with quantity and rate, the taxable value, and VAT shown separately.

The law is getting stricter too. According to Shankar Associates' June 2026 summary, the Finance Bill 2083 amends the Income Tax Act so IRD can require CBMS connection, and rewrites section 119Ka with a Rs 500,000 fee for using software that can delete or alter billing data and Rs 100,000 for other invoicing breaches. Check the Finance Act as passed for the final wording.

How does an invoice get from your till to CBMS?

Here's the flow we design around. Your POS, online checkout or ERP creates the sale. The certified billing module turns it into a numbered tax invoice. That invoice goes into a local queue before anything leaves the building. A sync worker sends it to the CBMS API and waits for the acknowledgement. Only when IRD accepts it is the invoice marked as reported. The same record then feeds the ledger and the monthly VAT return.

The queue matters because internet connections in Nepal still drop. Without one, a failed request can mean an invoice was printed for the customer but never reached IRD, and nobody notices until an assessment. With one, the invoice waits and retries, and someone gets an alert if it sits too long. How much delay IRD tolerates is a question for your software vendor. The expectation is that invoices reach CBMS as they're issued.

What is safe to automate?

Anything mechanical, repeatable and checkable. These are the jobs where software is more reliable than a tired person at month end:

• Invoice generation from confirmed orders, so nobody retypes a sale into a second system.
• CBMS sync through a queue with retries, so an outage delays reporting instead of losing it.
• Alerts when sync fails or an invoice sits unacknowledged past a set time.
• VAT sales and purchase registers built from acknowledged invoices.
• Daily reconciliation of CBMS records against the ledger, with a short exception list for a person to clear.

Reconciliation is where most of the hours go. The pattern is the one in our fintech reconciliation blueprint: match automatically, and send only the exceptions to a person. Wallet settlements from Fonepay, eSewa and Khalti are a separate matching problem and belong in their own job, which we covered in reconciling wallet payments.

What should stay with a person?

Anything that changes what you owe, or writes a permanent correction into IRD's record. A credit note or cancellation reduces reported sales, and because issued invoices can't be edited, a wrong one becomes something else you have to explain. Let the system draft it, attach the original invoice and the reason, and require an accountant to approve it.

The same goes for tax judgement calls: whether a supply is exempt or zero-rated, how to treat a mixed invoice, and what to do when CBMS and your books disagree for a reason the software can't see. Automation should surface these, not settle them.

What does this mean for a Nepali business right now?

If you're above Rs 200 million and still issuing bills from a spreadsheet or an unlisted system, fix that first. Choose enlisted software, then build around it. If you're between Rs 100 and 200 million, you have time to do it properly rather than in a rush once IRD issues its notice.

Don't start by rebuilding everything. Connect what you already run to the certified module, add the queue and the alerts, then automate reconciliation. That order gets you compliance first and saved hours second. Our automation ROI guide shows how to size the payoff before you spend, and the agentic back-office blueprint shows how exception handling can work at scale.

What should you ask a billing software vendor?

• Show me your IRD enlistment. Which version of the software does it cover?
• What happens to an invoice when the internet is down, and how will I know it reached CBMS?
• Can I pull a report of every invoice IRD hasn't acknowledged?
• How are credit notes approved, and who can issue them?
• Can your system export clean data to my ledger, or will we retype it?

If a vendor can't answer the second and third questions clearly, the gap will land on your accountant.

NeuralYug builds the connective layer around certified billing software: order-to-invoice integration, sync queues, alerting and reconciliation, with people kept on the decisions that carry tax risk. If you want a second look at your setup, talk to us or see how our Flow Automation service works.