Effects of GST

 Impact On imports And Revenue Collection

Import from India dropped considerably for a few months since the implementation of GST as

Indian exporters had to be registered below the new income tax bracket. Indian exporters get

GST refund from the govt once their customs certifies the export. As per GST rules, solely

producing corporations and their authorized dealers are allowed to export. Indian customs can

certify solely those export bills bestowed from producing corporations or their authorized

dealers.

Later, Nepal government additionally issued a compulsory provision for Nepali importers from

Republic of India to submit ‘bill of export’ from Indian corporations and authorized dealers for

imports on top of Rs 5,000 from Sep this year. Earlier, bill of export wasn't needed for import of

products up to Rs 25,000.

The Department of Customs has slashed the quantity from Rs 25,000 to Rs 5,000. While not ‘bill

of export’ it's tough for little traders to import from the border cities of Republic of India as

Indian customs doesn't settle for GST bills of the native suppliers if they're not authorized

dealers. This provision has checked probabilities of unauthorized trade between the 2 countries

from the border cities. This provision has had a brief term impact on the government’s customs

revenue. The Ministry of Finance stated that, customs revenue in first few months of this

financial stands at Rs 18.53 billion against the target of Rs 20.59 billion.

  Extra added cost on trade

Another effect of it will be seen in the import of goods to Nepal. The GST will increase the

transportation tax rate by three percent. Due to this, the transportation fare will rise by three

percent, say industrialists and traders. Transportation tax which was 15 percent earlier has

reached 18 percent. This is the reason for the increase in transportation fares while importing

goods to Nepal.

And also additional service charges and cargo-handling charges are being charges through

various ports in India. As Kolkata is one of the major ports of Nepal, authorities at Kolkata port

through which Nepal exclusively imports goods from third countries, have started imposing

additional service charges and cargo-handling charges.

 Effect in Nepals export

GST is similar to that of the Value Added Tax (VAT) in Nepal, but GST has a system of

multiple costs where the charges are laidd out on the basis of the products/merchandise: 0%, 5%,

12%, 18% and 28% on the class of goods and services. In various kinds of products and services

which are described as a basic necessity, the fees are lower and people defined as luxurious have

higher costs. GST is a single unified tax system in India which consolidated numerous taxes

levied on the state and central level government which have trouble. Since its implementation,

Indian industries and carrier vendors are expected to have less of an exemptions in a good way to
leading to have long-term impact on Nepali industries.

As majority ( two third) of Nepal’s export trade takes place with India, the new tax system in

India has adversely affected Nepal’s export to India as it has become costlier. Though, there is
zero-GST on exports from India. Which results in Nepal’s exports becoming less competitive

comparing with the Indian export trait which has a massive edge having zero- GST on exports.

 Exemption on certain cost

GST can also raise the price of services however there are certain benefits of charge reductions

that may mitigate the more tax burden. Cost of Indian import may additionally reduce. As export

from Nepal to India can be regulated under trade treaty, GST won’t be any hindrance. Nepal’s

competitive part will need to be ensured now for plenty exportable items as their fees throughout

the border have become cheaper because of charge reduction and removal of inter-nation tax

levy through GST.