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Nepal feels India’s GST heat, to send team to New Delhi

The Nepal government is sending a team to India next week to discuss ways to lessen the impact of New Delhi’s new Goods and Services Tax (GST).

world Updated: Jul 07, 2017 18:50 IST
HT Correspondent
HT Correspondent
Hindustan Times, Kathmandu
India-Nepal relations,Goods and Services Tax,Nepal concerns on GST
External affairs minister Sushma Swaraj with Krishna Bahadur Mahara, Nepal’s deputy prime minister and foreign minister, before a meeting in New Delhi on July 3, 2017.(PTI)

Nepal is sending a high-level team to India to convey its concerns over the impact of the Goods and Services Tax (GST) amid fears in official circles in Kathmandu that New Delhi’s new tax regime could increase the prices of imported goods.

The GST regime, implemented by New Delhi on July 1, has already started impacting the economy of Nepal, which is largely dependent on India for imports and also uses Indian ports such as Kolkata for exports.

Under the new regime, prices of goods imported from India will “shoot up” and goods imported from third countries via India will become more expensive, officials said. Authorities at Kolkata port, through which Nepal exclusively imports goods from third countries, have started imposing additional service charges and cargo-handling charges.

The Nepalese team will visit New Delhi next week, after Indian authorities expressed their readiness to sort out issues, said commerce secretary Naiendra Uphadhyay.

Indian officials are organising a briefing with relevant stakeholders in New Delhi, where the two sides will find ways to lessen the tax burden, officials said.

Nepal’s commerce ministry has already written to its Indian counterpart to waive taxes on Nepal-bound goods and items exported via India. The finance and commerce ministries have also constituted two panels to study the impact of GST on Nepal’s economy.

“Our concern is that India should not impose taxes on goods that Nepal imports from India as well as goods we import via Indian ports. Nepal has trade and transit treaties with India and our demands are all trade and transit-related matters should be governed by the provisions of the treaties, not by changes in the tax regime,” said one official.

As a landlocked country, Nepal should get a waiver, officials said.

Deputy prime minister Krishan Bahadur Mahara raised Nepal’s concern with external affairs minister Sushma Swaraj during a visit to India this week and urged her to intervene.

Reports in the Nepalese media suggested imports and exports have slowed down due to the GST and confusion on the Indian side about the tax to be levied on export and import goods.

First Published: Jul 07, 2017 17:37 IST