Centre to address Bhutan's GST concerns

The government is moving fast to address Bhutan’s concerns over implications of India’s new Goods and Services Tax regime on the economy and development programmes of the Himalayan Kingdom.

Thimphu has of late conveyed to New Delhi its apprehensions over the implications of India’s new GST regime on the 12th five-year plan of Bhutan. The Bhutanese government estimated that it would have to forgo Rs 1,400 crore between 2018 and 2023 due to implementation of the GST in India.

Sources in New Delhi told DH that Ministry of External Affairs and Ministry of Finance were in touch to discuss ways to address the concerns of the Bhutanese government.

The Government of India earlier collected the excise duty imposed on raw materials and consumer goods exported from the country to Bhutan. The excise duty was later refunded to the Bhutanese government. But the excise duty was done away with following the introduction of the GST. It would result in a Rs 1,200 crore-drop in Bhutanese government’s revenue collection over the next five years, Thimphu informed New Delhi.

Besides, as the introduction of the GST will also bring down the prices of the goods to be exported from India to Bhutan, the sales tax and green tax collected by the Bhutanese government will also go down resulting in approximately an additional Rs 200 crore drop in its revenue collection between 2018 and 2023, Thimphu conveyed to New Delhi.

New Delhi, according to sources, has already assured Thimphu that necessary steps would be taken to make sure that introduction of the GST regime in India does not hit the economy of Bhutan and derail Bhutanese government’s 12the five-year plan.