Essential commodity prices remain the same post-GST
The effect of Goods and Services Tax (GST) implemented from July 1 last year by India is yet to be felt on essential commodity prices in the country although prices of some other goods have fallen slightly.
According to owners of some retail outlets, prices of a few commodities have fallen by up to 10% at the most since a month back.
However, the price of rice and other essential commodities, which were
supposed to fall post-GST regime remains the same. Prices, according to the merchants, is determined not by the GST but by market forces. Since most of the Indian rice is consumed internally or exported, the price falls when the export drops and vice versa.
“GST is just a taxation system but the price is determined by the market factors,” said Umesh Prasad, a Phuentsholing trader. “So far the price of rice has remained almost the same pre and post GST regime.”
Meanwhile, the prices of Horlicks and toothpaste have decreased by 10 and 5% respectively. The price of Horlicks has fallen from Nu 250 to Nu 225 per jar. Similarly, noodles costs less by Nu 2 now. “There is not much change in the price except for a few goods,” said Manager of Tashi Shopping Complex, Anup.
A wholesaler has confirmed that due to customs duty the price of oil has increased. Though the GST does not apply on such commodities, the price has increased in India. Other goods like Maggi noodles cost Nu 11 now; less by Nu 1. Cosmetic products also cost less, according to Manager of Zimdra Impex, Bikash Sharma.
The manager of Eight Eleven said that except for a few items, prices have not changed. Oil, rice, flour and salt though are not taxed in Bhutan but their prices keep on fluctuating. Price of biscuits have reportedly fallen, too.
As for liquor, shopkeepers said that the price of Bhutanese liquor was revised twice last year. A bottle of peach wine costs Nu 200 compared to Nu 230 last year. “But it cannot be ascertained if this is due to GST,” said Dechen Wangmo, a wine shop owner. However, the price of Indian and other imported wines remains the same.
Also, the impact of GST on pharmaceuticals and footwear is yet to be felt. Right now, the prices are constant.
The Office of the Consumer Protection under the economic affairs ministry is monitoring whether the GST benefits have been passed down to the ultimate consumers. The team from the department already started their rounds in Phuentsholing last year.
The department has so far conducted monitoring on the automobile industry. It will then shift focus to the 15 essential commodities in the market. The department after compiling the report was supposed to submit to the Prime Minister’s Office for action.
A consultant, Naman Siddarth of IMS Taxoservices working with Association of Bhutanese Industries and Bhutan Chamber of Commerce and Industry said that prices will fall in the Bhutanese market and the customers can benefit. The export invoice should be declared at the Land Customs office in Jaigaon where GST will be exempted. Any wholesale dealer should now sell below Maximum Retail Price (MRP) as the price contains GST component. “The price of commodities should be cheaper by up to 30% in Phuentsholing than in Jaigaon,” he said.
GST ranges from 5%-28%. However, GST on export from India is exempted.