Supplier bill entry before the VAT deadline: claim festival input VAT

Which supplier bills let you claim input VAT in Nepal?

Input VAT is the tax you pay suppliers on business purchases. You offset it against the output VAT you charge customers, and you pay the difference. The output VAT and input VAT entry explains how the two net off.

A purchase supports a claim when all of these hold:

• The supplier is VAT registered. A supplier registered only for PAN does not charge VAT, so its bill carries nothing to claim.
• You hold a tax invoice, not a chalan. A delivery note, a quotation or an abbreviated bill does not support the claim.
• The invoice names both sides. It carries the supplier’s name, address and registration number, and your details with your registration number.
• The VAT is shown on its own line, separate from the taxable value. One total with tax folded in is not enough.
• It has a serial number and date, and describes the goods with quantity, rate and amount.
• The purchase is for the business and not in a category the VAT Act 2052 disallows.

A Nepali tax invoice must carry the same details when you sell, as set out in what a VAT invoice must contain. On a purchase, though, you are the one who loses money if they are missing.

Send a faulty bill back the day it arrives. A supplier corrects a bill easily in the same week. Three weeks later, during Dashain, nobody picks up the phone.

What does a late supplier bill cost? A festival month worked through

Take an illustrative clothing store in Asoj 2083. The figures are examples only, and the VAT is worked at 13% VAT.

Three bills worth Rs 3,00,000 before tax are still in the drawer, so Rs 39,000 more leaves the business in the middle of Tihar. The same happens if the bills were entered but the supplier had no VAT registration number on record.

Whether those bills can be claimed in a later return, and within what time, is set by the VAT Act 2052 and VAT Rules 2053. Confirm your position with the IRD or your accountant before you rely on a later claim. The safe plan is to claim in the right month. The VAT calculator splits any bill into taxable value and VAT if you want to check a supplier’s arithmetic.

When is the return due for Bhadra, Asoj and Kartik purchases?

Most VAT-registered businesses file monthly. The return for a Nepali month is due by the 25th of the following Nepali month, and payment is due with it. Applied to the festival season:

Gregorian dates come from the Bikram Sambat table used by the date converter. Festival dates are as published in the 2083 calendar.

The Bhadra deadline catches people because it lands on Ghatasthapana. Treat 25 Asoj as a date to finish early.

Match the bill to the GRN and the order before entry

A purchase order says what you asked for. A goods received note (GRN) says what arrived. The supplier bill says what you are being charged. In festival trade those are often three different numbers, so find out before the bill is entered.

For every bill, check the GRN and the order against the quantity on each line, the rate on each line, and the VAT total at the bottom. If all three agree, enter the bill. If one does not, put the bill on a short pile for a phone call and keep it out of the system for now.

Short supply

You ordered 100 cartons of cooking oil and 90 arrived. The GRN records 90. The bill says 100.

Do not type 90 against a bill that says 100. Your purchase register would then disagree with the supplier’s sales register, and the difference shows up when you both file. Ask the supplier for a corrected tax invoice for 90. If the bill was already entered and approved before anyone counted, raise a debit note against that bill for the 10 cartons. The debit note points at the original bill and reduces both what you owe and the input VAT on it. The debit note format is free if you still raise them on paper.

Rate difference

As an example, the order says Rs 450 a unit and the bill says Rs 480. Either the price really changed and nobody told you, or the bill is wrong. Hold the bill in draft, call the supplier and agree the figure. If the rate was wrong, get a corrected invoice. Do not approve the bill and plan to fix it later. A correction for “how much each” is harder to make cleanly after approval than a correction for “how many”.

Free scheme goods

A supplier runs a Dashain scheme: buy ten cases, get one free. Eleven cases arrive. Record all eleven on the GRN so your stock count is right. The bill carries what the supplier actually charged, and the input VAT you claim is the VAT shown on that tax invoice, no more.

How free goods are shown and treated for VAT is the supplier’s question first and your accountant’s second. The discount and scheme entry explains why these need care. Do not invent a VAT amount for free goods on your side.

Get the supplier record right, because Annex 13 depends on it

The VAT return is filed with a counterparty schedule, Annex 13. It lists every supplier and customer with their registration number, registered trade name, opening and closing balances, and purchases and sales split between goods and services.

The schedule takes its details from your supplier records instead of from each bill. Three fields cause most of the trouble:

• The registration number. A missing or mistyped number means the row cannot be matched to the supplier’s own filing.
• The trade name. Use the registered name, not the name on the shop board or the salesman’s card.
• Goods or services. Transport charges and repair work are services. Categorise them once, when the item is created.

Before the festival orders start, go through your supplier list and fix these three fields for every supplier you will buy from. It takes an hour now and saves you a query later. Annex 13 explained walks through every column.

In Kuver Books a supplier cannot be saved without either a PAN number or a VAT number, and suppliers can be imported rather than retyped. The form allows PAN alone, so check that suppliers who charge you VAT have their VAT number filled in.

A weekly supplier bill entry routine instead of a month-end pile

In festival months, month-end entry fails because the month end falls in the festival. A fixed weekly slot works better. Pick the quietest morning of the week, usually before the shop opens.

Two habits keep this going through Dashain. Put one person in charge of the tray, so bills do not end up in three different jackets. And staple each bill to its GRN once it is entered, so “entered” and “not entered” are two separate piles.

The VAT return filing guide covers the reconciliation checks in the last week in more detail. If the same festival month is also stretching your cash, collecting udhaaro before Dashain is the other half of the problem.

Photograph bills at the delivery door with AI bill scanning

The slowest part of supplier bill entry is typing. A distributor who receives a dozen bills a day in Asoj spends hours typing line items that are already printed on paper.

AI bill scanning in Kuver Books replaces the typing with a photograph. Photograph the bill (PNG or JPEG), up to 5 photos per batch, 20 MB each. You choose the receiving warehouse, upload the batch, and carry on billing while it works in the background. Each bill comes back as a draft purchase bill. The supplier, bill and due dates, discount, tax, totals and every line are filled in, and each line is matched to a product in your catalogue with a confidence score.

A person then checks the draft and submits it. The review screen shows the photograph beside the form. Check quantities, rates and the VAT total against the paper, correct anything that is wrong, and submit. The purchase bill then goes through the normal approval steps, and the image stays attached to the record.

Three things get better results in a festival week:

• Create suppliers and products first. Where they already exist, they fill in automatically. Where they do not, you enter them by hand.
• Photograph the bill flat, in good light, with all four edges visible. A crooked or shadowed photo is the main reason a line is missed.
• Mind the allowance. 25 AI bill scans a day included on Standard and Premium. On your heaviest delivery days, plan which bills to scan and which to key.

When a folder and a spreadsheet are enough

A shop that buys from three or four suppliers a month does not need scanning, and may not need purchase software at all. A tray, a purchase register in a spreadsheet and a fixed weekly entry morning will get the input VAT claimed on time. Keeping to that weekly morning matters more than which tool you use.

Software starts to pay off when bills arrive daily, when goods receipts and bills are handled by different people, or when the Annex 13 schedule has to be retyped each month. If you are still planning the festival stock itself, start with the Dashain and Tihar stock plan and come back to the bills.

Before you switch mid-season

Price. Standard is NPR 9,999/year, and 13% VAT applies on top. The pricing page shows what each plan includes.

Trying it. There is a 14-day free trial, no card required. Test it on one week of real supplier bills rather than sample data.

Setup. Guided setup; workspace ready the same business day. Suppliers and products can be imported, and the Excel migration guide covers bringing over what you keep in spreadsheets.

Timing. You can start in the middle of Asoj if you start with purchases only. Enter the month’s bills from the date you begin and keep the earlier bills in your existing register. Your accountant can join the two for that one return.