Nepal asks India to remove service tax on ocean freight costs

Nepal has asked India to scrap a 4.5 per cent service tax on ocean freight costs, saying it goes against the spirit of the KEY transit treaty signed between the two countries.

The tax was imposed in accordance with a notice issued by the Revenue Department of India on January 12.

Officials at the Nepal Embassy in New Delhi said that they had asked the Indian authorities to remove the tax as soon as possible as it goes against the spirit of the transit treaty signed between the two countries.

"We have made a formal request to India, and they have assured us that they will address the issue as soon as possible," said Krishna Hari Pushkar, a senior diplomat at the Nepal Embassy in Delhi.

"Efforts were being made at multiple levels to resolve the problem."