Concerned about the apprehended impact on Nepal’s commercial and trading activity due to the introduction of the Goods and Services Tax (GST) in India, a high-level government delegation from Nepal will be holding talks with Indian government officials in New Delhi on Tuesday. A 15-20 member team, led by Ravi Shankar Sainju, Joint Secretary in the Commerce Ministry, will be visiting India to discuss the new tax system in relation to the bilateral Trade and Transit Treaty between the two countries, the Kathmandu Post reported. The delegation will also include officials from the ministries of Foreign Affairs and Finance. “Although we are yet to see the actual impact of the GST recently imposed by India, the (Nepal) government has targeted to address the problems that the traders are reported to have been facing following the GST implementation,” Sainju said.
According to the bilateral treaty governing trade and transit, “Goods intended for import into or export from the territories of either Contracting Party from or to a third country shall be accorded freedom of transit through the territories of the other party”.
“No distinction shall be made which is based on the flag of vessels, the place of origin, departure, entry and exit destination or ownership of goods. “Despite this provision in the treaty, traders and freight forwarders have been complaining about a slowdown in export and import of goods to and from third countries via India during last week in the wake of the Indian government enforcing GST, the report said.
According to Nepali traders and freight forwarders, authorities at Kolkata Port earlier used to impose 15 per cent logistic service charge on goods imported from third countries. With the GST coming into effect, that charge has been raised to 18 per cent. “Although the GST should not affect Nepal’s trade, with the confusion among the officials at the implementation level, Nepali traders could have been facing problems,” said Sainju, adding that the ministry will finalise on Monday the main issues to be discussed in the meeting with Indian officials.