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.

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Ravi Shankar Sainju, Joint-secretary of the Commerce Ministry will lead a high-level Nepali delegation on Tuesday to hold discussions in New Delhi with government officials from India on the possible implications of the recently introduced Goods and Services Tax (GST) to the trade between the two countries. Bureaucrats from the Foreign Affairs and Finance Ministries would also be part of the team comprising 15 to 20 officials in all.

According to Mr. Sainju, while Nepal is yet to perceive the actual impact of the GST, Nepali traders and freight forwarders have been facing issues in the export and import of goods to and from other countries via India.

As per the provisions of the bilateral Trade and Transit Treaty between India and Nepal the GST should not affect Nepal’s trade. However, there have been complaints that the logistic service charge on goods imported from third countries has been increased from 15 percent to 18 percent at the Kolkata port.

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