The Government of India (GoI) has agreed to refund Bhutan an excise duty of Nu 4bn, for 2016.
On behalf of the Indian Government, Directorate General Performance Management (DGPM) signed an agreement with the Department of Revenue and Customs yesterday to refund a little over Nu 4bn Excise Duty. The refund of excise duty has increased by over Nu 1bn compared to 2015. This is mainly attributed to increase in imports such as petroleum products and motor vehicles from India. For 2015, the country received a refund of Nu 2.9bn.
As per the Annual Trade Statistics, in 2016, Bhutan imported goods worth of Nu 55bn from India. The country spent roughly Nu 5.8bn on import of diesel and other petroleum products; and ngultrum Nu 5.5bn on purchasing passenger cars and motor vehicle for transport of goods.
The increase in the Excise Duty refund is also due to the improved recording of imports data and maintenance of documents as desired by the Indian Government.
However, the increase in excise duty refund to Bhutan is projected to slump in coming years due to introduction of Goods and Services Tax (GST) in July last year by the Indian Government.
Meanwhile, GoI expects to release the agreed amount of Nu 4bn Excise Duty Refund before June this year. The Government of India refunds the Excise Duty annually in line with the Bilateral Trade and Transit Agreement.
