Community forestry is required to follow a forest management plan (FMP) to ensure sustainable tree harvesting. However, the role of FMPs or forest bureaucrats' discretion in guiding harvesting decisions and the resultant effects has not been explored. This paper investigates tree harvesting practices in community forests (CF) and its effects on forest sustainability, using the forest inventory panel dataset for three consecutive periods (2010, 2013 and 2016), together with qualitative information obtained by key informant interviews and a review of records of the community forest users' group. Harvesting decisions in the CF are largely guided by the decrees or schematic instructions of forest bureaucrats, where the role of the FMP remains highly contested. Whether harvesting decisions should be guided by the prescriptions of the FMP or should be regulated through decrees is a matter of discourse. Forest bureaucrats are arbitrarily reducing harvesting quantities and rarely referring to the prescriptions of the FMP. Consequently, users are compelled to harvest less than half the quantity of trees prescribed in the FMP. Furthermore, they are only allowed to harvest poor quality and dead trees. As a result, the number of good quality trees has increased, while the number of seedlings and saplings has decreased significantly. Although harvesting of saplings and seedlings is a common practice, it is against the provisions of the FMP. Though the current bureaucratic discretion has shown quick short-term effects on the forest stand conditions, the long-term impacts should not be undermined. Our findings will be useful to implementors and policy makers in Nepal and other developing countries with similar circumstances for deciding the tree harvesting. We argue for a rational approach in designing harvesting prescriptions and complying with them rather than regulating harvesting practices through guidelines, circulars and bureaucratic discretion.