Nepal Expected to Benefit from Indian GST Bill

March 31: The lower house of Indian parliament has passed four supplementary bills related to Goods and Service Tax (GST).

 After the lower house of parliament of India passed the bill on Wednesday, it is certain that this will be implemented from July 1.  The bill will now be sent to the upper house for approval.

The bill will be implemented in all the states of India within three months after its approval by the Indian Parliament.

Economists analyse that this step of Indian government to change the tax system in a bid to strengthen the economy will also help Nepal's economy which is turning import-oriented.

According to Shambhu Gupta, Professor at the Economics Department of Tribhuvan University, single rated GST will make the import and export process from India organised and systematic.

Gupta further shares that if GST will be implemented, the transport cost while importing from other countries will come down. "Besides this, the cost of finished goods and raw materials will also decrease and will reduce the price of goods in Nepalese market," he says.

India has been charging various taxes including state entrance tax, service tax and transportation tax.   So, it is expected that the replacement of all those indirect taxes by GST will create positive impact in the import and export of Nepal.

"Prior to this decision also, there was no tax in terms of import.  However, we had to pay various kinds of service taxes. We expect that this decision will provide us some relief now," shares Pashupati Murarka, President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). 

It is expected that the implementation of this tax system will help strengthen the economy of Nepal which depends on India for its two thirds of total imports.