GST could boost business for Phuentsholing

 

Although the government claims that it is yet to understand the impact of India’s shift to the Goods and Services Tax (GST) regime on Bhutan, the move is expected to impact Phuentsholing differently.

With zero tax on exports under this regime, import into Phuentsholing and rest of the places in the country is likely to increase. However, residents in this cross border area will get to see two different prices of the same commodities and have options to buy between Phuentsholing and Jaigaon.

Unlike the current situation, Phuentsholing is expected have more advantage and could even attract customers from across the border.

Talking to Kuensel, a consultant, Naman Siddharth of ImsTaxoservice, who is working closely with Association of Bhutanese Industries (ABI) and Bhutan Camber for Commerce and Industries said that Bhutanese consumers need to understand that prices of goods is going to drop.

There will be no taxes in whatever they buy, he said, adding that the Bhutanese consumers should always prefer buying from Bhutan.

One of the major changes Phuentsholing and Jaigaon are expected to see is on the household (electronics) appliances.

Prior to the GST, the average VAT rate on most of the household appliances was charged between 11-12.5 percent in most of the Indian states. There was a 12.5 percent excise duty on household electronic appliances.

Considering the Central State Tax and other local taxes, an average of 25 percent to 26 percent tax was charged on such goods. Now, GST slab for the same is 28 percent but export is tax-free. This means, Phuentsholing will have a price edge of 28 percent over Jaigaon for the same electronics.

Since electronics have a market in the country’s growing construction sector, tables are likely to turn against traders across the border.

OHowever, Bhutanese traders will have to buy directly from the manufacturers to stay away from manipulations.

Cell phones, which attract hundreds of Bhutanese across the border today now come with a 12 percent GST. This means, Phuentsholing stores would have better to offer.

Naman Sidharth said that this is likely for Phuentsholing with the GST. “Market in Phuentsholing will boom,” he said.

Meanwhile, there is still confusion among Bhutanese consumers on whether they would be charged GST for buying from Jaigaon or not.

BCCI’s business representative in Phuentsholing, Lobzang Tshering, said, that until there are clear understandings and directives, he has nothing to say right now.

GST was initiated from July 1 this year. While there are no clear directives from both the governments, GST is expected to impact the domestic carbonated soft drinks manufacturer the most. Soft drinks manufacturers in India are exempted the 21 percent excise duty, which means they will have the advantage.

However, with raw materials getting cheaper, how much impact would our soft drinks manufactures have to bear is yet to be ascertained.

Related Posts

Govt. to Waive Royalty for Tourists Visiting Eastern Bhutan

“Tourists visiting eastern dzongkhags need not pay the daily fee of USD 65 once the proposal comes through,” he said....

Nov 15, 2017 07:18

A Gift from His Majesty The King to the People - Drop in Petrol...

“The reduction of fuel prices was not passed down because of the fear in the reduction of the domestic revenue, but to...

Nov 11, 2017 10:52

A Very Successful Royal Visit to India

The Royal visit to New Delhi from 31st October to 3rd November was a big success by all standards. Most importantly, it...

Nov 09, 2017 10:47

Gross National Happiness of Business Assessment Tool Proposed

The proposed GNH tool is expected to systematically assess a business establishment’s effort to integrate GNH values...

Nov 08, 2017 13:48

Her Majesty The Gyaltsuen Inaugurates Ozone Park

Motithang Park in Thimphu was declared an ‘Ozone Park’. With the support from Thimphu Thromde, the park was remodelled...

Nov 07, 2017 17:44

Bhutan’s Possible Collaboration with the Finnish Education System

Finland is the top ranked nation for high quality education. It is also known as the top-ranking nation in the Programme...

Nov 02, 2017 10:35

Latest

News

Govt. to Waive Royalty for Tourists Visiting Eastern Bhutan

“Tourists visiting eastern dzongkhags need not pay the daily fee of USD 65 once the proposal comes through,” he said. The government, he...

Nov 15, 2017 07:18

A Gift from His Majesty The King to the People - Drop in Petrol Prices

“The reduction of fuel prices was not passed down because of the fear in the reduction of the domestic revenue, but to honour His Majesty’s...

Nov 11, 2017 10:52

Features

Conserving the Traditional Art of Weaving

The mission of the Royal Textile Academy is to preserve and promote the traditional form of weaving.

Nov 18, 2017 10:36

The Disappearing Practice of Polyandry

The traditional practice of polyandry in Laya was born out of necessity – the remoteness of the place. Located up in the highlands, Laya...

Nov 10, 2017 06:50

Sports

Chencho Gyeltshen Named Most Valuable Player

The home team fought hard against one of the best Middle Eastern teams with experienced professional players and a physically strong team.

Nov 16, 2017 05:28

Coach Pema Returns to Lead National Squad

Coach Pema has the experience of leading the boys since he first took over the squad in the match against the Maldives during the world cup...

Nov 04, 2017 17:30

Business

Bhutan to Graduate from Least Developed Countries Group by 2022

Bhutan has stable political, economic and social settings that could attract a lot of Foreign Direct Investments.

Nov 17, 2017 09:01

Applying the Concept of GNH on Social Enterprises

The essence of a social entrepreneur is what they can do and how they can balance the social and the commercial aspects of a business.

Nov 14, 2017 07:47

Travel

Professionalising Bhutanese Tour Guides

When tourists arrive in Bhutan, the first thing they see is not the pristine mountains or the serene environment. They see the guides.

Nov 11, 2017 12:24

Pray to Conceive at the Chimi Lhakhang

For couples who longed to have children, miracles were said to have happened after they have received fertility blessings at the Chimi...

Nov 08, 2017 08:44

Lifestyle

Efficacy of Traditional Bhutanese Medicine

Research carried out by a postgraduate student at the faculty of traditional medicine under Khesar Gyalpo University of Medical Sciences...

Nov 07, 2017 07:39

Popularity of Bhutan Natural's Lemongrass Oil

Bhutan Natural began to import Lemongrass oil from Bhutan in 2016. “We have since established ourselves as a reliable supplier of Bhutan...

Nov 05, 2017 10:41

Subscribe to our newsletter

Never miss out on new happenings and news stories!