Prices of Essential Commodities Remain Almost the Same Post-GST

Email

The effect of Goods and Services Tax (GST) implemented from July 1 last year by India is yet to be felt on essential commodities prices in Bhutan.

A grocery shop in Bhutan. (Source: https://www.bhutan-short-tour.html)

 

By Krishna Ghalley|Business Bhutan

 

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 Bhutan. However, the prices of some other goods have fallen slightly. GST ranges from 5%-28% in Bhutan. However, GST on export from India is exempted.

According to owners of some retail outlets, prices of a few commodities have fallen by up to 10% at the most since a month ago.

However, the prices of rice and other essential commodities, which were supposed to fall post-GST regime, has remained the same. Prices, according to the merchants, is determined not by the GST alone 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.

Prices of goods determined by market forces rather than the GST

“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 the manager of the 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 the 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. The 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.

Has GST benefits been passed down to the consumers?

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 of monitoring in Phuentsholing last year.

The department has so far conducted monitoring on the automobile industry. It will then shift its 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 Taxo services working with the Association of Bhutanese Industries and the Bhutan Chamber of Commerce and Industry said that prices will fall in the Bhutanese market and the customers can benefit ultimately.

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 the Maximum Retail Price (MRP) as the price contains the GST component. 

“The prices of commodities should be cheaper by up to 30% in Phuentsholing than in Jaigaon,” he said.

 

This article first appeared in Business Bhutan and has been edited for the Daily Bhutan.

 

 


Related Posts

Handicraft Shops Do Lucrative Business

Handicraft business in Paro is lucrative. The profit margin was very high. Although the same remains true now,...

Aug 21, 2017 15:17

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

Fuel Price Drop to Spur Economic Growth by 1%

“The drop in the prices will stimulate the economy by lowering the cost of transportation, resulting in a drop in prices...

Nov 27, 2017 10:48

Fuel Price Cut Leads to Reduction in Consumer Price Index

“Drukair is passing on savings to consumers derived as a result of lower fuel prices with airfare reduction starting...

Mar 31, 2018 17:49

World Bank project to improve agriculture productivity and food...

The Royal Government of Bhutan (RGOB) and the World Bank this week launched the USD 8 million Food Security and...

Sep 29, 2017 11:49

Multidimensional Poverty Drops Between 2012 and 2017

The Bhutan MPI monitors 13 indicators – food security, low education and inadequate sanitation, distributed across three...

Jan 04, 2018 11:19

Latest

News

Find Innovative Solutions For Every Challenge: Prime Minister Modi To Bhutan’s Youth

Prime Minister Modi said that he ‘sees dynamism and felt energised’ while meeting with the future of Bhutan.

Aug 18, 2019 23:58

Prime Minister Narendra Modi On 2 Day State Visit To Strengthen India-Bhutan Bilateral Ties

Prime Minister Modi is visiting Bhutan upon the invitation of Bhutan's Prime Minister Dr Lotay Tshering.

Aug 17, 2019 23:59

Features

Fulfilling His Majesty The King’s Vision, Digital Drukyul Is Set To Improve Public Service Delivery And Empower Citizens Digitally

Digital Drukyul will help create a digital ecosystem for citizens which is unencumbered by bureaucratic red tape.

Aug 19, 2019 15:28

National Tourism Policy To Be Implemented By July 2020: Tourism Council Of Bhutan

Promoting ‘High value and low volume’ tourism has been Bhutan’s policy for the last 50 years.

Aug 12, 2019 17:48

Sports

Two Young Bhutanese Swimmers Competed In 18th FINA World Championship

The duo are proud to represent Bhutan and compete on a worldwide stage for the first time.

Jul 28, 2019 21:32

Bhutan’s Dragon Boys Starts FIFA World Cup Qualifiers With A 1-0 Win Over Guam

Midfielder, Tshering Dorji’s 35th minute strike was enough to make Bhutan win the first leg of the first round of the 2022 World Cup and...

Jun 08, 2019 22:18

Business

Southeast Asian Company Invests Over US$100,000 In Bhutanese Start-up Drukfood

The investment includes a mix of cash and investment-in-kind.

Aug 15, 2019 14:26

Bhutan’s First Crowdfunding Platform Gaining Traction, Opens Doors For Entrepreneurs To Raise Funds

So far, three promoters - Bhutan Alternatives, Freelancer Bhutan and Himalayan food have registered with the Bhutan crowdfunding platform.

Aug 05, 2019 22:10

Travel

7 Facts You Never Knew About Flying Into Bhutan

Druk Asia interviewed Namgyal Wangchuk, Senior First Officer with Drukair to find out what it's like to fly into Paro International Airport.

Aug 07, 2019 23:18

Bhutan Has Great Potential To Be A Top Eco-Tourism Spot: Albert Teo

Despite Bhutan being home to a wide array of flora and fauna, it is still not a top ecotourism destination.

Jul 19, 2019 23:58

Lifestyle

Finding One’s Voice: Rapping In The Kingdom Of Bhutan

The lack of support for rappers stems from the general misconception that most people have about rap.

Aug 10, 2019 23:38

First Bhutan-Bollywood Film Collaboration - Rolong: Make the Dead Walk In The Making

The film is expected to hit the theatres by the middle of 2020.

Aug 04, 2019 23:58

Subscribe to our newsletter

Never miss out on new happenings and news stories!