The Inland Revenue Department (IRD) has issued an directive directing the business entities having annual turnover of more than Rs 250 million to get registered in the Central Billing Monitoring System (CBMS) at IRD.
As of now, the provision is mandatory only for the large taxpayers having turnover more than Rs.250 million. Issuing a public notice, the tax authority has revised the rule making it mandatory also for the businesses having the specified transaction volume. The IRD in this regard has directed the authorities including Large Taxpayers’ Offices, Medium Level Taxpayers’ Offices and Inland Revenue Offices to include such businesses in the framework.
The CBMS allows monitoring and retrieving of all transaction data while the business firms issue their bills for their clients. According to the IRD, the system helps in tax collection and improvement of the overall tax administration.
With the system becoming mandatory, business firms need to install software that will connect their billing system to the IRD’s computers. Software developers licensed by the IRD will install a device and add a specific field in their computer system. The system records sales instantly and allows the IRD to charge taxes accordingly.
The government launched the system as a pilot project on November 17, 2017, which was brought into force in the fiscal year 2018/19. In the first phase, the IRD incorporated around 600 large businesses and firms using individual software.
The system is also expected to prevent business firms from evading taxes. Business firms’ entry into this system is important to control rampant tax evasion through fake VAT bills and hiding of real transaction details. Using duplicate excise duty stickers, selling bootleg liquor or doing business without maintaining account books in a bid to evade tax are rampant in the domestic market.
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The CBMS makes it mandatory for the specified business firms to issue electronic billing for their customers. The government, through the announcement of the budget for the fiscal year 2023/24, talked about including taxpayers with annual turnover of the aforementioned threshold in the CBMS.
(source: My Republica)