Core rule: eligible input VAT exceeding output VAT is ordinarily carried to the next period. Rule 39(4) provides a refund-application route where excess remains for four consecutive months. Separate qualifying export-refund provisions also apply.
Example: eligible input VAT is NPR 30,000 and output VAT NPR 20,000. The NPR 10,000 difference is a credit balance, not cash that may simply be withdrawn from the tax account. Carry it forward unless a valid refund claim is made under an applicable route.
Support a claim with filed returns, purchase/import records, sales details and reconciliation of the credit. The department may verify eligibility and outstanding obligations before paying a refund.
Do not claim the same balance both as refunded and as credit carried forward. Track the application and resulting adjustment so later returns remain consistent.