A police spokesman said they prevented the Tibetans from voting as their act was illegal.
More than 9,000 Tibetan exiles were participating in the voting process to elect their Prime Minister in exile on Sunday when the police intervened, eyewitnesses said.
Nepal is home to more than 20,000 Tibetan exiles. The government prevented the voting in the wake of growing pressure from the Chinese Embassy here to stop any activity directed against the northern neighbour.
Thousands of Tibetans living in India, Bhutan, Nepal, Europe and the United States took part in Sunday's vote, a preliminary election for a new prime minister and parliament in exile.
The police seized ballot boxes from three places in Kathmandu.