Bhutan Cuts Prices on 1,900+ Items; New 5% GST to Take Effect
- brg_news_room
- 20 hours ago
- 2 min read
BHUTAN: With the introduction of a five percent Goods and Services Tax (GST), over 1,900 commodities previously taxed at higher Bhutan Sales Tax (BST) rates are expected to become more affordable. However, consumers may experience temporary price pressures during the transition, as goods imported or purchased before 1 January still carry the embedded BST. When these items are sold under the new GST system, a short-term double taxation effect may occur, which should ease once pre-GST inventories are cleared.
Finance Minister Lekey Dorji noted that 1,522 commodities previously subject to 10 percent BST, such as footwear, clothing and textiles, televisions, machinery, steel products, sanitary ware, kitchen and household items, and betel leaves, are likely to see noticeable price reductions under GST.
Goods previously taxed at higher BST rates are expected to become even cheaper. Items taxed at 15 percent BST, including cement, watches, cosmetics, preserved fruits and vegetables, carpets, bags, and suitcases, are set for price declines, while commodities taxed at 20 percent BST, such as noodles, bread, pastries, pan masala, supari, furniture, and sweet biscuits, are also expected to become more affordable.
At the highest end, goods previously attracting 30 percent BST, such as fruit juices, betel nuts, plastic carry bags, ice creams, and motorcycles between 500cc and 800cc, could see substantial price drops under GST.
At the same time, Minister Dorji acknowledged that some prices may rise. A total of 2,252 commodities that were previously zero-rated under BST, including vegetables, fresh meat and fruits, eggs, basic medicines, agricultural seeds and tools, computers and laptops, mobile phones, and rice cookers, may become marginally more expensive. Essential goods like rice, salt, edible oil, sanitary napkins, and wheelchairs remain exempt from GST. Additionally, four commodities previously taxed at 2.5 percent BST and three at 4 percent BST may see slight price increases.
Source: Kuensel
