Prices of es­sen­tial com­modi­ties shoot up

GST ex­emp­tion does not seem to be work­ing at all

Business Bhutan - - Money - Kr­ishna Ghal­ley from Phuentshol­ing

Three months af­ter Goods and Ser­vices Tax (GST) im­po­si­tion in In­dia, and in­stead of Bhutanese consumers reap­ing the ben­e­fits, they are ac­tu­ally pay­ing more for cer­tain es­sen­tial com­modi­ties.

Though the In­dian gov­ern­ment has de­clared ex­emp­tion on GST for goods ex­ported to Bhutan, the price of rice, oil and su­gar has ac­tu­ally in­creased. Each case of these prod­ucts is dearer by up to Nu 60.

Go­ing by the looks of it, Bhutanese cus­tomers are not go­ing to ben­e­fit from the GST ex­emp­tion any time soon. Whole­salers and re­tail­ers, with the in­crease in prices are com­pelled to pass the ex­tra cost to cus­tomers.

An In­dian mer­chant who sup­plies to Bhutan said that in­con­ve­niences at Jaigaon’s Elec­tronic Data In­ter­change (EDI) port or the erst­while land cus­toms of­fice is an­other rea­son for in­crease in prices.

GST fil­ing which is de­layed for days com­pels traders to hike up prices. Traders have to pay de­ten­tion charge which is in­cluded in the prices de­spite GST ex­emp­tion.

“If such de­lays are caused at the port, how can they ex­pect traders to de­crease prices? In fact, we face loss and are com­pelled to in­crease prices,” a trader whose con­sign­ment is stuck at Jaigaon said.

Also, traders said that the Depart­ment of Rev­enue and Cus­toms im­poses 5% Bhutan Sales Tax (BST) on the GST amount. “Al­ready, we are not GST ex­empt and we are taxed ad­di­tion­ally on GST,” said Man­ager of Gyelt­shen En­ter­prises, Divesh.

Due to lim­ited ben­e­fits, Jaigaon is still a pre­ferred shop­ping hub, oth­er­wise had the GST reg­i­men been im­ple­mented, Phuentshol­ing would ide­ally be see­ing com­par­a­tively big­ger hordes of shop­pers.

An­other rea­son Bhutanese pre­fer to shop in Jaigaon is be­cause of the avail­abil­ity of more choices. “We hear that prices will drop in Bhutan, but most prod­ucts still come cheaper in Jaigaon,” said San­gay Wangdi, a pri­vate em­ployee.

Mean­while, Ly­onch­hen Dasho Tsh­er­ing Tob­gay in his last meet­ing with the busi­ness com­mu­nity in Phuentshol­ing had as­sured that prices of com­modi­ties in Phuentshol­ing would fall com­pared to Jaigaon and that Bhutanese traders would be at ad­van­tage.

The In­dian gov­ern­ment has im­posed GST be­tween 5%-28% on prices of goods. How­ever, GST on ex­ports from In­dia is ex­empted.

Mean­while, the Of­fice of Con­sumer Pro­tec­tion un­der the eco­nomic af­fairs min­istry is mon­i­tor­ing whether GST ben­e­fits are be­ing passed down to the ul­ti­mate consumers. The team from the depart­ment started mon­i­tor­ing from month start.

Ini­tially, the depart­ment is fo­cus­ing on the au­to­mo­bile mar­ket af­ter which it will do the same for 15 es­sen­tial com­modi­ties in the mar­ket.

The depart­ment is still com­pil­ing re­ports which af­ter com­ple­tion will be sub­mit­ted to the Prime Min­is­ter’s Of­fice for nec­es­sary ac­tion.

“Just now, we are mon­i­tor­ing whether GST ben­e­fits are be­ing passed down to ve­hi­cle buy­ers,” said Chief Trade Of­fi­cer from the Of­fice of Con­sumer Pro­tec­tion, Gopal Prad­han in a pre­vi­ous in­ter­view with Busi­ness Bhutan.

A case each of rice, sugar and oil costs up to Nu 60 more af­ter GST im­po­si­tion

Newspapers in English

Newspapers from Bhutan

© PressReader. All rights reserved.