Under the Goods and Services Tax (GST) framework, essential items such as rice, oil, salt, sanitary napkins and diapers, and wheelchairs are exempt from GST. However, these exemptions do not apply uniformly to all varieties, leading to ongoing confusion among both consumers and retailers.
Two weeks after the GST came into effect, confusion continues among businesses and consumers over which goods are exempt from the tax.
Some shopkeepers have been charging GST on all rice and cooking oil, while others have exempted these items entirely. They say the confusion stems from a lack of clear product specifications in the Goods and Services Tax Act 2025 and limited public understanding.
According to the Act, rice, classified under the Bhutan Trade Classification as semi-milled or wholly milled – whether polished or glazed, is exempt from GST. This category includes all imported rice and rice produced by the Food Corporation of Bhutan.
Kuenzang Thinley, GST and BITS Project Commissioner said, “When it comes to rice, there is one type of rice listed under the exemption, with BTC Code 1006.30.00. Although it appears that only one rice type falls under this code, all rice consumed comes under this category, semi-milled or wholly milled rice.”
However, broken rice used for industrial purposes and local rice sold through GST-registered businesses are subject to GST.
When you buy local rice directly from farmers or markets like Kaja Throm, you don’t pay GST, as these sellers are not registered under the GST system. However, purchasing the same local rice from a GST-registered shop incurs a five per cent GST.
For cooking oil, only sunflower-seed oil and mustard oil are exempt. Other varieties, such as soybean, olive, coconut, palm, rice bran, and sesame, are subject to GST.
GST and BITS Project Commissioner said, “All sunflower and mustard oil will receive tax exemption. Other oils, such as soybean oil, olive oil, dalda, and oil used for offerings, do not fall under the exemption.”
Meanwhile, all types of salt, sanitary napkins, diapers, and wheelchairs remain fully exempt from GST, regardless of brand or variety.
Tshering Zam/ Sangay Chezom
