KATHMANDU — In a major setback to the government’s controversial border customs policy, the Supreme Court of Nepal has ordered authorities not to collect customs duties on daily consumer goods brought from India until a final verdict is delivered on the writ petition challenging the move. 

The interim order comes after growing public outrage in Nepal’s border regions, where ordinary citizens had been facing strict checks and harassment over small household purchases brought from nearby Indian markets. The policy, introduced under the newly formed government led by Prime Minister Balendra “Balen” Shah, had made customs duty mandatory on goods worth more than Rs 100. 

Key Details of the Ruling

• The Government's Decision: The Ministry of Finance, under the Balen Shah-led administration, had strictly enforced a provision requiring cross-border travelers to pay customs duties on any goods exceeding a value of Rs 100. This rule aimed to increase revenue collection and curb informal trade, but it triggered a severe public backlash—particularly in the Terai-Madhesh region—due to aggressive inspections of everyday household items. 

• Who Filed the Case: A writ petition challenging the mandate was filed by advocates Amitesh Pandit, Akash Mahato, Suyogee Singh, and Prashant Bikram Shah. The petitioners argued that taxing minor daily consumer goods contradicts the provisions of the Customs Act and stands in direct violation of existing trade and transit treaties. 

• The Judges on the Bench: The interim order was issued by a joint division bench comprising Supreme Court Justices Hari Prasad Phuyal and Tek Prasad Dhungana. 

• When the Verdict Was Given: The Supreme Court issued this significant interim order on May 15, 2026. 

Judicial Intervention and Public Impact

The division bench directed the Office of the Prime Minister and Council of Ministers, the Ministry of Finance, and related security agencies to halt the implementation of the disputed provision immediately. 

The decision is being viewed as a major embarrassment for the Shah administration, which had heavily defended the crackdown. Critics and political observers argue that the policy was economically impractical and completely disconnected from the ground realities of border communities, which have historically depended on open-market access to affordable Indian goods. 

Residents in border districts had spent weeks complaining of long queues, invasive security inspections, and daily inconveniences after security forces intensified enforcement. Local traders argued that the policy unfairly targeted ordinary citizens making small household purchases rather than stopping large-scale smugglers. 

A Pattern of Executive-Judicial Friction

This ruling marks another blow to the current administration's confrontational administrative style. Opponents claim the government attempted to project a superficial sense of nationalism at the expense of public convenience and Nepal’s deeply interconnected economic relationship with India.

The suspension of the customs rule is expected to bring immediate relief to thousands of families and small traders operating along the Nepal–India border. The Supreme Court’s stay order will remain in full effect until the final hearing of the case determines the legal fate of the Rs 100 border tax policy.