Ben­e­fits of GST has to be availed by the ul­ti­mate con­sumers

Bhutan Times - - Front Page - Sonam Pen­jor

The ben­e­fits of Goods and Ser­vice Tax (GST) has to be passed on to the ul­ti­mate con­sumers by the im­porters, sup­pli­ers, dis­trib­u­tors, deal­ers, whole­saler and re­tail­ers.

The GST, of­fi­ci­at­ing sec­re­tary of min­istry of eco­nomic af­fairs, Sonam P Wangdi said the GST is a im­prove ver­sion of tax which is a self reg­u­lat­ing tax which is called as des­ti­na­tion con­sumer base tax that is an ad­just­ment hap­pened at ev­ery stages of the value chain from raw ma­te­ri­als sup­plier to ul­ti­mate con­sumers.

Ac­cord­ing to the press re­lease from the depart­ment of trade un­der min­istry of eco­nomic af­fairs GST fol­lows a multi stage col­lec­tion mech­a­nism and credit of tax paid at pre­vi­ous stage is avail­able for set off at the next stage of the trans­ac­tion. “The GST sys­tem is ex­pected to en­hance com­pet­i­tive­ness of the in­dus­try and in­crease con­sumer wel­fare.”

GST is a sin­gle in­te­grated tax­a­tion sys­tem within In­dia that com­bines sev­en­teen (17) state and cen­tral taxes into a sin­gle tax of six tax bands vary­ing from zero to 28 per­cent. It is a des­ti­na­tion and con­sump­tion based tax, im­posed to the fi­nal con­sumer.

Sonam P Wangdi said that ex­port from In­dia to any coun­try will be zero rated, which means that im­port into Bhutan will be­come cheaper.

How­ever, he added that the price im­pact in Bhutan will be fully as­cer­tained af­ter the GST sys­tem in In­dia is stream­lined and fully im­ple­mented.

The con­sumer can ex­pect the prices of the com­modi­ties to be cheaper in Bhutan than in In­dia. Study on item wise price dif­fer­ence is cur­rently be­ing car­ried out by the depart­ment of trade and of­fice of the con­sumer pro­tec­tion (OCP).

In In­dia, seven per­cent of the items come un­der the ex­empted list, 14 per­cent fall in the 5 per­cent tax band, 17 per­cent in the 12 per­cent tax band, 43 per­cent un­der the 18 per­cent tax band and 19 per­cent of the items will fall un­der the 28 per­cent tax band.

The press re­lease stated that about 81 per­cent of all goods and ser­vices fall be­low or in the 18 per­cent tax band and the bal­ance items will fall un­der the 28 per­cent tax band.

To avail the ben­e­fits of the GST, Sonam P Wangdi said that it must be im­ported through GST- reg­is­tered en­ti­ties in In­dia.

“All im­porters, sup­pli­ers, dis­trib­u­tors, deal­ers, whole­salers and re­tail­ers are ad­vice to im­port goods from GST regis- tered en­ti­ties in In­dia and en­sure that ben­e­fits of all in price is passed down to the con­sumers.”

“Non com­pli­ance with the no­ti­fi­ca­tion will be dealt as per the con­sumer pro­tec­tion act pro­vi­sions.”

OCP is em­pow­ered by Con­sumer Pro­tec­tion Act of Bhutan 2012 to en­sure that the li­censed busi­ness en­ti­ties do not mis­lead and give false in­for­ma­tion to con­sumers re­gard­ing prices or method of de­ter­min­ing prices.

Fur­ther, sec­tion 34 of the con­sumer pro­tec­tion rules and reg­u­la­tion 2015 strictly pro­hibit busi­ness en­ti­ties from dis­tort­ing the in­for­ma­tion im­pair­ing the con­sumers to make in­formed de­ci­sion.

“The de­fault­ers shall be li­able to pay fines equiv­a­lent to the value of the goods or ser­vices or the busi­ness li­cense may also be re­voked.”

Mean­while, with the in­tro­duc­tion of GST in In­dia, the price of goods of In­dian ori­gin will fall in the coun­try that for top ten com­modi­ties will be dropped by 14 per­cent and prices of con­sum­able goods are ex­pected to fall by around five per­cent on an av­er­age. Be­sides that raw ma­te­ri­als will be be­come cheaper for the man­u­fac­tur­ers and there will be no im­pact on es­sen­tial goods like veg­eta­bles, rice, oil, salt, su­gar milk, etc.

And for im­port of ve­hi­cle not ex­ceed­ing 1500cc are ex­pected to drop by 13.6 per­cent and those ex­ceed­ing above 1500cc are ex­pected to drop by 21 per­cent.

Goods and Ser­vices Tax (GST) is an in­di­rect tax which was in­tro­duced in In­dia on 1 July 2017 and was ap­pli­ca­ble through­out In­dia which re­placed mul­ti­ple cas­cad­ing taxes levied by the cen­tral and state gov­ern­ments.

The prices of all goods im­ported from In­dia will now fall by zero to 28 per­cent. This is as per the di­rec­tive is­sued by the Of­fice of Con­sumer Pro­tec­tion un­der the eco­nomic af­fairs min­istry on Au­gust 28.

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