Bhutan has raised serious concern about the implementation of GST. The authority is wondering about the effect of the taxation on the industries. The industry officials of Bhutan government said that the government is worried about the economy of Bhutan after the tax reformation.
The process of trade which the two countries used to have before implementation of GST has slowed down now. The worry of Bhutan comes from the fact that India is the major transition for importing goods. Additionally, India has been an essential trading partner of the country.
Thimphu has already sent a couple of finance delegates for discussion on the implementation of GST and its effect on the trade. India in reply has said that it would take at least three months to explore and look the matter properly.
Bhutan has raised three issues which could create immediate concern. The first concern is the price of exported goods which would become more expensive now that GST is effective.
Regarding exports and imports, GST will be levied at the point of entrance. It would not be levied at the point of sales. Bhutan is concerned about this. The PM of Bhutan said in a meeting that they just want to ensure a legal way to shift the tax from the entry point to the sales point.
The next fact which has been raised by the Bhutan government is about the transportation tax after GST. A close source said that the transportation tax had negatively affected the country because the Bhutan does not have any proper railway connectivity. The country depends on India solely for the transition. This is the reason, the delegates have looked for revocation of the transport levy.
The amount of paper work after GST is another matter of concern. The government of Bhutan has said that such massive paperwork would slow down the consignment movement. To control that Bhutan government has asked for a proper system which will make the documentation process easier.
Additionally, the Bhutanese government is worried about their industry because of the dropping profit margin.