This study focuses on the seismic assessment of underground structures in the transition of Higher Himalayan and Lesser Himalayan region of Nepal. Due to fragile geology of the Himalaya, most of the underground structures are constructed in the highly jointed rock mass. Rock mass classification approaches are extensively used for the estimation of supports without seismic consideration. Design of the underground structures like tunnels and cavern seismic effect is rarely considered in the Nepal Himalaya. For the sustainable development of hydropower project tunnel and caverns plays vital role in terms of its stability. Presence of faults, and crushed zone, along the alignment of tunnel, the existing in-situ stress increases beyond its critical level and strength. The long-term seismic behaviour of an underground structure is very essential in weak rock mass. A detailed dynamic analysis of underground response is evaluated using 2D numerical analysis with the geological data, rock mass and fault encountered in hydropower tunnel, through case study. A comparison is then made between the analysis result of the tunnel response with and without seismic consideration.