The Indian Ambassador to Bhutan, V.P. Haran, also said the excise duty refund has not been discontinued. He says the bilateral trade agreement India has with Bhutan provides for it.
The Indian Ambassador, however, maintains that there had been some exploratory talks with the Ministry of Finance and Ministry of Economic Affairs to see if they could change over to a new system.
“Right now when we export goods to other countries, the exporters either export without paying excise duty and a bond. Of if he pays excise duty he can claim refund from the government of India,” V.P. Haran explains.
He said there has been an exception for Bhutan and Nepal. Both the countries could pay in their own or Indian currencies.
“In this case, the exporters used to pay the excise duty in India. At the end of the years the government used to submit a return saying this is how much we have imported, this is the total excise duty in the imports.” He said amount is verified and the excise duty collected is refunded to the government concerned.
The Indian Ambassador said suppose Bhutan takes up similar trade system India has with Nepal, Bhutanese government will be able to realise duty at the point of import which is immediate.
“As soon as goods come in the good passes through custom points and it will be allowed to be imported only when you pay the duty, so you get the revenue immediately.”
The second advantage he said was if the goods are coming for further processing or re-export either in India or any other country, it will come into Bhutan without payment of duty from India.
However, he says, if there is any change over to the new system, it will not be done unilaterally. He said it will be take up only after a discussion with the Bhutan and Indian governments.
