What a VAT invoice in Nepal must contain, and the reprint rules

What does a tax invoice have to carry?

A tax invoice issued by a VAT-registered business in Nepal identifies three things: who sold, who bought, and what the tax is. In practice it carries:

• The heading that marks it as a tax invoice.
• Your business name, address and VAT registration number.
• The buyer’s name and address, and their registration number where the buyer is registered.
• A serial number, running in sequence, and the date of issue.
• A description of each item or service, with quantity, unit, rate and amount.
• Any discount, shown before tax is calculated.
• The taxable value.
• The VAT amount, shown separately. The rate is 13% VAT.
• The total payable, commonly also written in words.

Two of these cause nearly all the trouble.

The first is showing VAT separately. A bill with one total and nothing else is not a tax invoice, even if the total is correct. The buyer cannot see the tax, so the buyer cannot claim it.

The second is the sequence. Numbers run in order within the fiscal year. A gap in the numbers leads to questions, and a number used twice is worse than a gap.

A tax invoice is prepared in more than one copy. The original goes to the buyer, and you keep the copies for inspection and for your own records. Confirm the number of copies your trade needs with the IRD or your accountant. Tax offices apply this detail strictly, but websites often report it loosely.

What is an abbreviated tax invoice?

In retail, many customers will never claim input VAT (the VAT a business pays on its purchases and claims back). For these sales there is an abbreviated tax invoice. It is a shorter document. It carries your details and registration number, a serial number and date, a description of what was sold, and the amount including tax.

The shorter form has three limits.

A buyer cannot use it to claim input VAT. If a customer asks for a bill they can claim against, they need the full tax invoice, which means you need their registration number.

It still needs care. It is a numbered, recorded document and follows the same strict numbering sequence.

You cannot use it for every sale. Above certain values, and for certain supplies, the full tax invoice is required instead. Confirm the current limit and the excluded categories with the IRD or your accountant.

At the counter, ask once, early: “Do you need a VAT bill?” It takes two seconds at the point of sale. It saves you reissuing the bill later, which is the hardest thing to do under the rules.

Credit notes and debit notes

Once an invoice is issued, it stays as it is. Returns, overcharges, undercharges and discounts given after the sale are new events, and each gets its own document.

A credit note reduces what the customer owes: a return, an overcharge, a discount agreed after the sale. It adjusts the VAT that was charged.

A debit note increases it: an undercharge, extra goods supplied after the original bill.

Both must refer to the original invoice. That link lets your sales register reconcile (agree with your invoices), and it makes the counterparty schedule come out right. Editing the original instead may seem quicker, but the rules prohibit it.

What are the reprint rules?

This is the part of the Electronic Billing Procedure 2074 that customers notice first, because it changes what they see on paper.

Under normal circumstances, an invoice with its sequential number prints once.

If a copy has to be printed, for any reason, the printed document must clearly show that it is a copy. The procedure names the wording, for example Copy of Original.

The printed copy must also show how many times that invoice has been printed. The software must store that count so it can be examined later during an inspection or investigation.

Cancellation follows the same idea. An issued invoice may be cancelled with the reason recorded, and the master schedule is updated to show it. A report shows the full detail of cancelled invoices. A cancelled invoice can be reprinted, clearly marked as cancelled.

All of this depends on one rule: data once entered cannot be deleted. To correct a mistake, you end the effect of the old record and write a new one. A separate report shows what was corrected. We cover the procedure in full in Electronic Billing Procedure 2074 explained.

Printing practicalities

A small shop needs the same document in three widths: A4 for a corporate buyer, A5 for most counter work, and thermal receipt width for the till. If your software can print only one of them, somebody ends up retyping bills into a word processor, and the numbering sequence breaks without anyone noticing.

Check these points before you choose any system:

• Does the reprint label appear automatically, or does somebody have to remember to tick it?
• Is the reprint count printed on the document as well as stored?
• Can a cancelled invoice be reprinted showing it is cancelled?
• Does the counter flow let you switch a sale from an abbreviated bill to a full tax invoice before it is issued, without retyping?
• Can you see, as a report, every cancellation and every correction made during a month?

How Kuver Books handles it

Invoice numbers in Kuver Books run in sequence inside the Nepali fiscal year and are never reused or edited. Reprints are marked as copies and counted. A cancellation records a reason and keeps the original. A correction is saved as a new record that takes the place of the old one, and the old one is not overwritten. Customer and supplier records hold their permanent account and VAT registration numbers, so the right number prints on the right document and appears in the counterparty schedule. Each document type has its own print templates in A4, A5 and thermal receipt widths. Credit and debit notes stay linked to the original invoice, so the sales register and the VAT reports reconcile at month end. The invoicing page shows the documents, and the reports page shows what they produce.

For the exact format your trade has to use, and for the value limits on abbreviated invoices, confirm with the IRD or your accountant.