What a VAT bill in Nepal must show

If your business is registered for VAT in Nepal, every sale needs a proper tax invoice (कर बीजक). This guide walks through what the VAT Rules, 2053 ask for, in plain words, with the rule numbers so you can check them yourself.

This is general information to help you get your bills right, not tax advice. Rules change with amendments; confirm anything important with your tax office or accountant.

Who has to issue a tax invoice

Rule 17 says a registered person supplying goods or services has to give the buyer a tax invoice in the format of Schedule 5 (or Schedule 5A for insurance), unless the tax officer has allowed otherwise.

What goes on the tax invoice

The Schedule 5 format has these parts:

• Invoice number and two dates: the transaction date and the date the invoice was issued.
• Seller: name, address and taxpayer registration number (PAN).
• Buyer: name, address and the buyer’s taxpayer registration number (PAN).
• Mode of payment: cash, cheque, credit or other.
• A line for each item: serial number, description, quantity, price per unit and amount.
• Totals: discount (and its percentage), taxable amount, VAT (and its rate, 13%), and the total.

Rule 17 also says that where it applies, the invoice must name the goods’ kind, size, model and brand. “Mobile phone” isn’t enough when you can write “Samsung Galaxy A15, 128 GB, black”.

The words “Tax invoice” (कर बीजक) must appear clearly on the front of the bill.

Three copies

Under Rule 17(2), a tax invoice is prepared in three copies:

1. the original, which goes to the buyer;
2. a second copy, kept separately to show the tax office when asked;
3. a third copy, for your own records.

With billing software, the “copies” are the saved invoice plus the printout, but keep in mind that the tax office can ask to see your invoices.

Short tax invoices for small retail sales

Rule 18 lets a retailer, with permission from the tax officer, give a short tax invoice (Schedule 6) instead of a full one:

• It is only for sales up to Rs 500. Above that, a full tax invoice is required.
• Many small items can be written as one lump sum.
• If a buyer asks for a full tax invoice, you must give one even below Rs 500.
• A buyer holding only a short tax invoice cannot claim input VAT on it.

Returns and price changes: credit and debit notes

When a price changes after the sale, for example a return or a correction, Rule 20 asks for a credit note or debit note that shows:

• a serial number and the date of issue;
• the seller’s name, address and registration number;
• the buyer’s name, address and registration number (if registered);
• which tax invoice it relates to, and its date;
• the goods or services, the amount credited or debited, and the VAT on that amount.

Keep a monthly account of these notes. Don’t tear up or edit a finalised bill; correct it with a credit note.

Keep your records for six years

Rule 23 lists the records a registered person must keep, including the tax invoices and short tax invoices you issue and receive, and all credit and debit notes. They must be kept safely for six years.

How Sano Godam helps

Sano Godam’s A4 tax invoice shows the heading “Tax invoice”, your business name, address and PAN/VAT number, a sequential invoice number, the date in AD and BS, the customer’s name, address and PAN, each item with quantity, rate, discount and VAT, and the taxable amount, VAT and total. Finalised invoices can’t be edited; returns go through credit notes linked to the original invoice, and cancelled bills keep their number with a reason.

Two parts of the Schedule 5 format aren’t printed yet: the mode of payment and a separate transaction date (the invoice has one date). If your tax office asks for them, write them on the printout until we add them.

Sano Godam is not yet IRD-verified billing software. If your business is required to use IRD-verified software (for example for real-time CBMS reporting), check with your tax advisor.

Sources

• Value Added Tax Rules, 2053 (English translation), Nepal Law Commission: Rules 17, 18, 20 and 23.
• मूल्य अभिवृद्धि कर नियमावली, २०५३ (with amendments up to the 22nd), Nepal Law Commission: Rule 17 and Schedule 5 (tax invoice format).
• Inland Revenue Department: tax laws