Generating VAT Returns and IRD Annexes
Every VAT-registered business in Nepal must file a monthly VAT return with the Inland Revenue Department (IRD), supported by the statutory purchase and sales registers (खरिद खाता and बिक्री खाता). Udyot ERP builds these reports directly from your voucher entries — no manual re-keying — so what you submit to IRD always matches your books. This article walks you through generating your monthly VAT return, downloading IRD Annexes 1 through 9, and printing the Purchase Book and Sales Book in IRD Rule 23 format.
How Udyot ERP calculates VAT figures
Every Sales invoice you raise and every Purchase bill you record carries a per-line VAT percentage (13% for standard-rated goods and services, 0% for VAT-exempt or zero-rated items such as exports). When you save a voucher, Udyot immediately posts the corresponding GL entries:
- Sales invoice at 13% — Debits your customer (receivable) and credits both the sales income ledger and the VAT Payable ledger.
- Purchase bill at 13% — Debits both the purchase expense ledger and the VAT Input Credit ledger, then credits the supplier (payable).
- Credit note / Debit note — Automatically reverses the original VAT lines so the net output and input VAT figures in your return are always correct.
Because the VAT return draws its numbers straight from these posted vouchers, the figures on your IRD submission are identical to your Trial Balance and P&L — there is no separate “VAT module” to reconcile.
Generating the monthly VAT return
In Nepal, VAT returns are filed monthly, covering the Nepali calendar month (Bikram Sambat). Udyot uses BS dates throughout, so all month and year selections follow the BS calendar.
- Go to Tax → VAT Return.
- Select the BS month and year you want to file (for example, Shrawan 2082).
- Review the summary figures that appear:
- Total taxable sales and output VAT (from your Sales invoices and Credit notes for the period).
- Total taxable purchases and input VAT credit (from your Purchase bills and Debit notes).
- Net VAT payable or refundable — output VAT minus input VAT credit. A negative figure means you have excess input credit to carry forward.
- Click Generate to lock the return for the period. Udyot creates a VAT Return record that you can revisit at any time.
- From the VAT Return record page, open the IRD Annex tabs to download each annex (see the next section).
Important: If you try to generate a return for a period you have already filed, Udyot will warn you that the period is already on record and ask whether you want to revise it. Do not generate a fresh return for a filed period without first checking with your accountant.
IRD Annexes 1–9
After generating the VAT return, each annex is available as a downloadable CSV or PDF from the VAT Return record page. The table below summarises what each annex covers.
| Annex | What it contains |
|---|---|
| Annex 1 | Sales register — every tax invoice issued in the period, with party PAN, invoice number, taxable amount, VAT, and total |
| Annex 2 | Purchase register — every purchase bill received, with supplier PAN, bill number, taxable amount, and input VAT claimed |
| Annex 3 | Credit and Debit note register for the period |
| Annex 4–9 | Additional schedules required by IRD (imports, exports, exempt supplies, adjustments, and others) — generated automatically where the underlying vouchers exist |
All annex files are formatted to match IRD’s upload templates, so you can upload them directly to the taxpayerportal.ird.gov.np e-filing portal without reformatting.
Purchase Book and Sales Book (IRD Rule 23)
IRD Rule 23 requires VAT-registered businesses to maintain a Purchase Book (खरिद खाता) and a Sales Book (बिक्री खाता) in a prescribed format. Udyot generates both from your posted vouchers.
- Go to Tax → IRD → Sales Register for the Sales Book, or Tax → IRD → Purchase Register for the Purchase Book.
- Select the BS month and year.
- The register displays each transaction in IRD Rule 23 format — one row per invoice — with columns for date, invoice number, party name, party PAN, taxable amount, VAT amount, and grand total.
- Click Print to open a print-ready layout, or Download PDF to save a copy for your records.
The figures in the Sales Register and Purchase Register feed directly into Annex 1 and Annex 2 respectively, so you can cross-check them before submitting.
Nepal-specific notes
- VAT rate: Nepal’s standard VAT rate is 13%. Udyot supports both 13% (taxable) and 0% (exempt/zero-rated) per invoice line. Lines with a 0% rate appear in your Sales Book but contribute zero output VAT.
- PAN requirement: For B2B transactions, the buyer’s PAN is required on the invoice for Annex 1. Udyot links each party to their PAN stored in Masters → Parties. Keep party PAN details up to date so the annex exports cleanly.
- BS dates: All date selectors in the VAT Return and annex screens use Bikram Sambat. The first month of the fiscal year is Shrawan (month 4 in BS). Make sure your voucher dates are in the correct BS month before generating the return.
- Monthly filing deadline: IRD requires VAT returns to be filed by the 25th of the following month (Nepali calendar). Generating the return early lets your accountant review the figures before the deadline.
- TDS on purchases: TDS deductions are handled separately in the TDS Return (under Tax → TDS Return) and do not affect VAT figures. See the TDS guide for details.
Before you generate — quick checklist
- All Sales invoices, Purchase bills, Credit notes, and Debit notes for the month have been posted and saved.
- Each party’s PAN is recorded in Masters → Parties.
- Your VAT Input Credit and VAT Payable ledger balances in the Trial Balance match the figures shown in the VAT Return summary.
- No vouchers are sitting in “draft” status for the period — only posted vouchers flow into the return.