Es­sen­tial com­mod­ity prices re­main the same post-GST

Business Bhutan - - Front Page - Kr­ishna Ghal­ley

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.

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