Playing as a light-side bounty hunter, I'm conflicted. I don't want to kill Huttsbane on the one hand but tricking Nem'ro with the head of another Evocii seems disingenuous. I know my character is not yet a Mandalorian at this point (I've played the story before so i know how it goes) so there probably isn't a formal code of "honor" that I live by, but I generally have it so that my BH doesn't kill his targets unless they fight back and give him no choice or unless they themselves want to die honorably rather than be captured, in which case I agree to kill them (In the case of the Eidolon and Reneget Vause the Trandoshan). Here are my main reasons for sparing him although I am not fully convinced:

1) Yes, sparing him and lying about it is "dishonorable" but you're not yet a Mandalorian and thus probably don't live by a rigid code, not to mention that you're working w/ Mako regardless and she's already spreading lies to advance your reputation.

2) It could be your character simply craves challenges and wishes to test themselves against strong opponents. From what it seems, Huttsbane isn't actually that tough and perhaps he himself has made a reputation through trickery. Killing him is the equivalent of preying on the weak rather than fighting a worthy opponent honorably.

3) it establishes early on that your character isn't simply a cold-blooded killer but has a method to their madness if you are wishing to play as a more "light sided" bounty hunter, thus they only kill as a last resort.

Please Share your thoughts

I don't really have a suggestion here, because I agree that from the angle you're approaching your character this is a tough call.

I play my hunters a little more neutral (though they still tend toward light side). If I'm being paid to kill Huttsbane, I'm killing Huttsbane. If I'm being paid to bring him in alive, I'm going to do everything reasonable to bring him in alive instead of killing him. This is different, though, and still suggests more indifference to life with my characters than you're going for.

One suggestion I could make is that your character doesn't get into the Great Hunt without Nemro's sponsorship. It might not be worth the risk lying to him. Not to mention lying to a Hutt gangster is a good way to find yourself, unarmed, in your underwear, 1v1ing a Rancor in his arena. If we suspend disbelief and ignore game mechanics, that's probably not a risk worth taking just yet. Despite Huttsbane's motives being sympathetic, he is still technically a terrorist, and the bounty hunter is still somebody who has killed and will kill again, even if only grudgingly. A person who balks at killing Huttsbane is definitely in the wrong profession to begin with.

I don't think the story you're pigeonholed into leaves as much room for altruism and honor as you'd like.

1) Yes, sparing him and lying about it is "dishonorable" but you're not yet a Mandalorian and thus probably don't live by a rigid code,

I don't see the relationship between "you're not a Mandalorian" and "[you] don't live by a rigid code". Are you trying to say that only Mandalorians have a (rigid) code of honour?