For thousands of businesses across Bhutan, the Goods and Services Tax, GST is no longer just a new tax system. It has become part of their daily operations. Businesses are now required to issue GST-compliant invoices, maintain detailed records and file tax returns on time. While many accept GST as an important reform, some say adjusting to these new responsibilities still remains a challenge.
The cash register rings. A GST invoice is printed. Another sale is recorded.
These have become part of the daily routine for thousands of businesses since the implementation of the Goods and Services Tax or GST.
After months of awareness campaigns and taxpayer education, the Department of Revenue and Customs has transitioned into the GST compliance phase.
However, many say filing monthly returns, calculating Input Tax Credit and using digital systems still remain difficult, even seven months after GST was introduced.
“We were told that businesses with an annual turnover of five million ngultrum or more will be required to pay GST. Our business fall under that category, but I still do not understand the procedures or how to file taxes,” said Yeshey Wangchuk from Yeshi Yetsho Transport in Phuentshogling.
“Many of us are not yet ready for GST. It is also affecting our sales. For instance, some of my customers are postponing their purchases because they are waiting to see if GST will be done away with,” said Tashi Dorji, a shopkeeper in Paro.
Under stricter compliance requirements, businesses are now expected to issue GST-compliant invoices, maintain proper sales and purchase records, calculate taxes accurately, and submit returns within the prescribed deadlines.
Eligible businesses that have not yet registered are also expected to do so without delay.
Under the GST Act, businesses that fail to register can be fined Nu 10,000, while serious offences such as tax evasion can attract penalties of up to twice the unpaid tax amount, capped at Nu 1 M.
To meet the tax obligation with confidence and without making mistakes, the shopkeepers say they need training and timely guidance.
“If the government wants to strictly implement GST, they should have first provided us with proper training so that we fully understand how the system works,” said Prem Lal Dulal, a shopkeeper in Tsirang.
However, not everyone sees the transition as a burden.
Others believe GST is a necessary reform that will strengthen the country’s economy.
“I think businesses have understood GST, although not everyone understands it completely. The government has introduced this tax system with good intentions. If we want to improve our economy, we need a strong system. Businesses may face some inconvenience, but I believe most have understood it,” said Ugyen Dorji, a shopkeeper in Bumthang.
He added that businesses that deliberately fail to comply should be held accountable.
“The policy and system that the government have set up, it is good if people understand it, and if they do not understand it, it is important for the department to make them understand it. However, if businesses intentionally violate the law and rules, it is important to penalise them. If the government keeps on being lenient with us, how long will our country stay this way?”
While many businesses continue to face challenges, they remain hopeful that with support from the department and experience will make compliance easier.
They believe that, over time, GST will become a routine part of doing business.
Deki Lhazom
Edited by Sangay Chezom
