Government of India has removed 20% tax that was levied on rice paddy exported to Nepal. The Indian Ministry of Finance released a notice on Monday about the dismissal of the tax.

Indian Government had recently announced the 20% taxation on rice grains on 8th September. Soon after the notice was released, the Birgunj Chamber of Commerce and Industry protested against the rule.

The Chairman of the Chamber, Subodh Kumar Gupta said that grain traders in Nepal are relieved by the decision to remove excessive tax on rice grains.

He said, “Many rice factories were close to shutting down after having to pay 20% tax on grains that were imported from India, and consumers also were bound to pay for the increase in rice prices.”

He further added, “The removal of the taxation is not only relief for the industries but for the entire nation.”

In the notice published by the Ministry, it was stated that no duty will be charged on rice husk, rice paddy, semi-milled or fully-milled rice, polished or glazed or boiled rice, and basmati rice. Also, no duty will be charged for organic non-basmati rice.

However, the ministry has given a condition that the amount of grain entering Nepal should not exceed 6 lakh metric tons. Last year, Nepal imported 5.5 million metric tons of rice from India.