Core rule: section 17 links input credit to taxable transactions. Rule 39 requires a valid tax invoice for domestic purchases or the prescribed import evidence. Special restrictions and apportionment can limit credit even when the bill is genuine.
Example: a VAT-registered trader buys taxable resale stock for NPR 100,000 plus NPR 13,000 VAT. Assuming full taxable-business use, valid evidence and no restriction, NPR 13,000 is input VAT. An employee's private purchase is not eligible merely because the business paid for it.
Rule 39 permits a claim only once and requires invoices or import documents within its one-year look-back. Reconcile the purchase register with the actual supply and return.
Keep the original invoice, supplier details, receipt or service evidence and import/payment documents where relevant. A fabricated invoice or unsupported ledger entry does not establish a credit.