Published August 17, 2026.
If your business issues a meaningful volume of invoices, there's a good chance you've either already been pulled into the Inland Revenue Department's electronic billing mandate, or you're going to be at some point in the next few years. IRD has been expanding its Centralized Billing Monitoring System, or CBMS, in phases, and the pattern so far is consistent: the turnover threshold that triggers mandatory compliance keeps moving downward, bringing progressively smaller businesses into the system with each phase.
This guide covers what CBMS actually is, why IRD built it, exactly how the threshold has moved and what that means going forward, what changes operationally once your business is required to comply, and why businesses currently below the threshold shouldn't treat that as a permanent exemption. If your business is anywhere near the current threshold — or you're simply trying to plan ahead rather than react once a notice arrives — this is the detail worth understanding now.
What's in this guide
- What CBMS actually is, and why IRD built it
- The threshold mechanics — and why they keep shrinking
- How to check if your business is currently affected
- What actually changes operationally
- If you're currently below the threshold
- What non-compliance risk looks like
- Frequently asked questions
- Bottom line
What CBMS actually is, and why IRD built it
CBMS — the Centralized Billing Monitoring System — is the infrastructure IRD uses to receive sales and invoice data directly and in real time from businesses required to bill electronically. Mechanically, a licensed software vendor sets up a device or software connection between a business's billing system and IRD's servers. Every sale that gets billed through that connected system is recorded on IRD's side as it happens, rather than surfacing only later when the business files its periodic return.
The underlying reason IRD built this is straightforward and worth stating plainly rather than dancing around: a meaningful share of the gap between what businesses report and what they actually transact happens at the billing stage — sales that go unrecorded, underreported, or documented informally in a way that never makes it cleanly into the tax base. Real-time, system-level visibility into billing closes that gap in a way that periodic returns and post-hoc audits, by their nature, can't fully replicate. This isn't a uniquely Nepali approach — real-time invoice reporting systems have become common internationally as tax administrations have modernized — but it's a real and current shift in how compliance works here, and it's worth treating as a permanent feature of doing business at scale in Nepal going forward, not a temporary initiative.
The threshold mechanics — and why they keep shrinking
CBMS didn't launch by covering every business in Nepal at once — it started with a turnover threshold well above what most businesses generate, and has been narrowing that threshold in phases since. The most recent move: the mandatory threshold was previously set at NPR 25 crore (250 million) in annual turnover, and has been reduced to NPR 20 crore (200 million), with the lower threshold taking effect from the end of the Chaitra quarter of FY 2082/83.
That's not a small adjustment — it's a meaningful expansion of which businesses are now legally required to connect to CBMS, and it follows a pattern rather than standing alone. IRD's own stated direction is a phased roadmap toward bringing every business entity in Nepal into the digital billing ecosystem over time. Read plainly, that means the NPR 20 crore threshold in effect now is very unlikely to be the last word — expect it to be revised downward again as the rollout continues, the same way it moved from NPR 25 crore to NPR 20 crore. Businesses well above the current threshold have no ambiguity about their obligation. Businesses meaningfully below it still have a genuine planning question worth taking seriously: not if the threshold will eventually reach them, but roughly when, based on how quickly the phases so far have moved.
How to check if your business is currently affected
The starting point is your actual annual turnover, taken from your filed returns rather than an estimate or a rough sense of how business has been going. If your turnover is above NPR 20 crore, you fall within the current mandatory threshold and should already be moving toward — or have completed — an electronic billing integration through a licensed vendor.
If your turnover is close to the threshold in either direction, it's worth checking your position more carefully rather than assuming you're clearly on one side of the line. Businesses growing toward the threshold should treat crossing it as something to plan for in advance, since setting up a compliant electronic billing connection through a licensed vendor takes real lead time — testing the integration, training staff on the new billing process, and confirming the connection is reporting correctly to CBMS before you're relying on it for every sale. Waiting until you've technically crossed the threshold to start that process leaves you exposed for the gap in between. If there's any doubt about where your business currently stands, confirming directly with IRD or a tax professional is worth the certainty.
What actually changes operationally
Once a business is required to comply, the shift isn't cosmetic — it changes how every sale gets billed, day to day. A licensed software vendor integrates the connection between your existing billing system (or a new one, if your current setup can't support the integration) and IRD's CBMS servers. From that point forward, sales need to be recorded and transmitted in real time through that connected system as they happen.
Practically, that means a few concrete changes for staff and operations. Manual or handwritten bills, which may have been an acceptable fallback before, are no longer compliant once a business is required to bill electronically — every sale needs to go through the connected system. Staff issuing bills need to be trained on the new process, since a real-time connected system generally behaves differently from a standalone point-of-sale or manual ledger. And the integration itself needs to be treated as an operational dependency that gets maintained, not a one-time technical setup — if the connection goes down or a device fails, that's a compliance gap until it's restored, not a background IT issue that can wait.
For businesses already using modern point-of-sale or accounting software, the transition is often more about vendor integration and staff process than about starting from scratch. For businesses still running billing manually or through basic, non-integrated software, this mandate is effectively also a forcing function to modernize the billing setup itself, not just bolt on a reporting connection to what's already there.
If you're currently below the threshold
It's tempting to read a turnover threshold as a line that simply doesn't apply to you if you're on the right side of it today, and move on. Given how this rollout has actually played out — moving from NPR 25 crore down to NPR 20 crore in a single phase, with IRD's stated intent being to keep extending digital billing to more of the business population over time — that's a riskier assumption than it looks. The direction of travel is consistently toward more businesses being covered, not fewer, and there's no signal that the threshold has settled at its current level.
There's also a second angle worth factoring in: IRD has signaled plans for incentive schemes intended to encourage smaller vendors to adopt digital billing voluntarily, ahead of being legally required to. If that materializes as expected, there may be a real advantage to moving early rather than waiting to be pulled in by a lowered threshold — better terms, smoother vendor selection without the same time pressure, and a business that's already comfortable with electronic billing before it becomes mandatory rather than scrambling to comply against a deadline. Businesses that are growing quickly, or that expect to cross NPR 20 crore within the next year or two even if they're currently under it, are the ones with the clearest case for starting to plan the transition now rather than waiting for a formal notice.
There's a bookkeeping dimension to this decision too, worth weighing alongside the compliance angle. A business billing electronically through CBMS generates a running, system-verified record of every sale, which tends to make monthly reconciliation and return preparation more straightforward than reconstructing figures from manual bills or disconnected point-of-sale exports. Businesses that adopt early, even voluntarily, often find their bookkeeping gets cleaner as a side effect of the transition, not just their compliance standing — the same real-time data that IRD is using for oversight is also data your own accounting can use for better visibility into the business.
What non-compliance risk looks like
The entire premise of CBMS is giving IRD real-time visibility into billing specifically because that visibility is harder to get through periodic returns alone. A business that's required to connect but hasn't is, by definition, one of the gaps this system exists to close — which means it's a more visible gap, not a less visible one, compared to before CBMS existed. That's a different risk profile than under the old reporting-only model, where a business's actual billing activity was less directly observable between filing periods.
Beyond the direct compliance exposure, non-integration can complicate things that depend on a clean, current tax standing — loan applications, tender eligibility, and tax clearance certificates all tend to draw on a business's compliance record, and an unresolved electronic billing obligation is the kind of thing that can surface at an inconvenient moment during any of those processes. Our tax clearance certificate guide covers more on what these processes generally look for. The practical takeaway is to treat your compliance deadline as firm once you know it applies to you, rather than waiting to see how strictly it gets enforced in practice — that's a more expensive way to find out than confirming your position proactively.
If you're unsure whether your business is currently required to comply, or you know you're required to but haven't started the integration process yet, reach out to CompanySathi. Getting a licensed billing integration set up correctly, and keeping it compliant on an ongoing basis, is part of the tax and accounting support we provide — see our tax services for the fuller picture of what that covers.
Frequently asked questions
What is CBMS?
CBMS stands for Centralized Billing Monitoring System, the platform the Inland Revenue Department uses to receive sales and invoice data in real time from businesses required to bill electronically. A licensed software vendor connects your billing system or device to IRD's servers, and each sale is recorded on IRD's side as it happens rather than being reported later through a periodic return alone.
What is the current turnover threshold for mandatory electronic billing?
As of the current phase, businesses with annual turnover above NPR 20 crore (200 million) are required to issue invoices electronically through CBMS. This was lowered from the previous threshold of NPR 25 crore (250 million), with the reduced threshold taking effect from the end of the Chaitra quarter of FY 2082/83.
My turnover is below NPR 20 crore. Does that mean I'm permanently exempt?
No. IRD has already lowered the threshold once, from NPR 25 crore to NPR 20 crore, as part of a phased rollout, and its stated direction is to keep bringing more businesses into the digital billing system over time. Being below the current threshold means you're not required to comply today, not that you're exempt from ever having to comply. IRD has also signaled incentive schemes to encourage smaller vendors to adopt digital billing voluntarily ahead of the mandate reaching them.
How do I know if my business is currently required to use CBMS?
Compare your business's annual turnover against the current NPR 20 crore threshold using your actual filed returns, not an estimate. If you're close to the threshold either way, or your turnover has grown since your last filing, it's worth confirming your status directly with IRD or a tax professional rather than assuming, since crossing the line brings an integration obligation with a lead time attached.
What actually changes operationally once a business is required to bill electronically?
A licensed software vendor sets up the connection between your billing software or device and IRD's CBMS servers. From that point on, sales are expected to be recorded and reported in real time through that connection rather than through manual or handwritten bills. Staff need to issue every sale through the connected system, and the business needs to keep that integration running continuously rather than treating it as a one-time setup task.
Can I keep using handwritten or manual bills once I'm above the threshold?
No. Once a business is required to bill electronically under the CBMS mandate, invoices need to be issued through the connected electronic system in real time rather than through manual or handwritten bills. Continuing to issue manual bills after crossing the threshold defeats the purpose of the system and is the kind of gap IRD's monitoring is specifically designed to catch.
What are the risks of not complying once my business crosses the threshold?
Since CBMS exists specifically to give IRD real-time visibility into sales, a business that's required to connect but hasn't sits in a position where its reported figures are more likely to draw scrutiny, not less. Beyond the compliance exposure itself, non-integration can complicate routine dealings that depend on a clean tax record, such as loan applications, tenders, or tax clearance certificates. The safer approach is treating the integration deadline as firm rather than waiting to see how strictly it's enforced.
Where do I get the software or device to connect to CBMS?
The connection is set up through vendors licensed by IRD for this purpose, rather than through any billing software a business happens to already be using. It's worth confirming a vendor's current licensing status with IRD before committing, and building in setup and testing time ahead of your compliance deadline rather than starting the integration at the last moment.
Can CompanySathi help with getting a business compliant with the CBMS mandate?
Yes. Confirming whether your business is currently affected, coordinating the transition to a licensed electronic billing setup, and keeping your reporting compliant on an ongoing basis is a standard part of the tax and accounting support CompanySathi provides. Get in touch through our contact page if you'd like help assessing where your business currently stands.
Bottom line
CBMS is not a one-time initiative that happened to affect a narrow band of large businesses — it's a phased, expanding system, and the threshold has already moved once, from NPR 25 crore down to NPR 20 crore, with IRD's own stated direction pointing toward bringing progressively more of Nepal's business population into it over time. If your turnover puts you above the current threshold, treating the integration as urgent rather than optional is the right call. If you're below it, the safer read of the trend so far is to plan for when the threshold reaches you rather than assume it won't. Either way, our tax and accounting services can help assess where your business currently stands and get a compliant billing setup in place before it becomes a deadline instead of a decision. For the wider tax compliance picture, our VAT registration threshold guide and digital payment VAT discount guide are worth reading alongside this one. When you're ready, contact CompanySathi to get started.
