India Not to Levy GST on Nepal’s Third Country Trade

July 20, 2017

In response to Nepal’s concerns about the impact of India’s Goods and Services Tax (GST) and the additional charges it would bring in, officials of India’s Ministry of Commerce and Customs, and Central Board of Excise and Customs have clarified that the country would not levy GST on Nepal’s third country imports and exports through India’s seaports and custom points.

As part of an awareness program on GST, the Indian government organized a meeting in New Delhi for high level officials from Nepal and Bhutan. Shree Krishna Nepal, deputy director general of Department of Customs (DoC) led the Nepali delegation to the meeting.

After the GST implementation came into effect on July 1, 2017, service charges had increased for terminal handling, delays and detention during the freight movement between India’s seaports and the Nepal border and vice versa.

Dhaniram Sharma, the spokesperson for Inland Revenue Department (IRD), said that while Indian officials have agreed to Nepal’s proposal to keep the charges unchanged or capped at the pre-GST level, they are yet to decide on the working modality.

India currently accounts for two-thirds of Nepal’s total trade.