Digital Invoicing Now Mandatory for Businesses with Over Rs 200 Million Annual Turnover

Businesses with an annual turnover exceeding Rs 200 million are now required to issue digital invoices, the Inland Revenue Department (IRD) has announced.

The decision, made by the department in mid-April, reduces the previous threshold of Rs 250 million. According to the IRD, companies exceeding the new limit must also register with the Central Bill Monitoring System (CBMS).

"Implementation of the Rs 200 million threshold for mandatory e-invoicing has already begun," said Madan Dahal, Director General of the IRD. He added that the department plans to gradually lower the threshold further in the coming years.

Authorities say digital invoicing enhances transaction transparency and facilitates easier monitoring. Every invoice issued through the system is automatically recorded on a central government server, which is expected to help curb tax evasion, boost revenue collection, and strengthen trust between taxpayers and the government.

Dahal also noted that the department is encouraging smaller businesses to voluntarily join the system. "Online billing links every transaction to our system in real-time, increasing transparency and helping control irregularities in billing," he told New Business Age.

However, Dahal clarified that banks and financial institutions are currently not required to integrate their transactions into the CBMS.

Krishna Prasad Sharma, President of the Lumbini Province Chapter of the Federation of Nepalese Chambers of Commerce and Industry, said issuing digital invoices is not problematic in itself. "But the government must ensure that its systems are effective," he cautioned, adding that cumbersome and low-quality official systems often create difficulties for businesses. "If every system is seamless, industrialists and traders will readily adopt them."

This news has been updated to correct that businesses with an annual turnover exceeding Rs 200 million are now required to issue digital invoices. An earlier version mentioned an inaccurate figure.