A bus was travelling from Khotang district to Kathmandu when it plunged 300 metres down the road at Mahadevsthan, Xinhua reported.
"As many as 12 passengers died on the spot whereas more than two dozen passengers were injured," a police official said.
The identity of the killed people have not been identified yet. The injured were taken to local hospitals.
More than 40 people were travelling in the bus, the exact number is yet to be determined. According to the police, the bus was overcrowded.