Those who purchased vehicles from dealers between January 2019 and November 30, 2024, and were charged excess Green Tax are eligible for refund
Dorji Choden
Eleven vehicle dealers in the country have recently been found guilty of overcharging customers by inflating green tax amounts, resulting in Nu 30.9 million in refunds to 4,345 customers after a review by the Department of Revenue and Customs (DRC).
The dealers involved are State Trading Corporation of Bhutan Limited (STCBL), Singye Agencies, Zimdra Motors, Zimbi Motors, Bhutan Isuzu, TCD Motors, Shingkhar Auto, Bhutan Hyundai, Leksol Motors, Samden Vehicle, and Freedom Motors.
The refund amounts for each vehicle dealer have been specified by DRC.
STCBL is required to refund Nu 14.33 million for 857 vehicles, while Singye Agencies must return Nu 9.61 million for 185 vehicles.
Zimdra Motors owe Nu 4.99 million for 1,120 vehicles, and Zimbi Motors is set to refund Nu 770,943 for 18 vehicles.
Bhutan Isuzu is expected to return Nu 523,538 for 165 vehicles, and TCD Motors must refund Nu 322,458 for a single vehicle.
Shingkhar Auto will refund Nu 219,286 for 190 vehicles, and Bhutan Hyundai is to return Nu 130,949 for 1,736 vehicles.
Leksol Motors is required to refund Nu 28,826 for four vehicles, while Samden Vehicles will refund Nu 25,000 for 37 vehicles. Freedom Motor is to refund Nu 1,740 for 32 vehicles. DRC has issued a public notice informing that individuals who purchased vehicles from certain dealers between January 2019 and November 30, 2024, and were charged excess Green Tax, are eligible for a refund.
The issue arose following a spike in vehicle prices after the lifting of the vehicle moratorium. During this period, the DRC collected documents from vehicle dealers to review their pricing structures.
It was then that they found the dealers had inflated the Green Tax charges to their customers.
According to the DRC, the dealers pay Green Tax, Customs Duty, and other applicable charges at the Point of Entry.
These indirect taxes are imposed on the customers when they purchase vehicles from the vehicle dealers.
However, the audit revealed that dealers inflated these costs on their invoice, charging customers more than the actual tax amounts.
Dealer-issued invoices are not always submitted to the DRC.
The dealers have been instructed to refund the overcharged amount by February 15, 2025.
In response to public criticism that no penalties have been imposed beyond refunding the overcharged amounts, the DRC stated: “We conduct audits every few years and can identify such issues hereafter. For now, we have no comments on what further actions may be taken against the dealers.”
The Prime Minister instructed the dealers to settle any outstanding taxes owed to the government within a month.
Lyonchhen warned that the government could publicly disclose vehicle import costs if unjustified pricing practices persist.
Additionally, the Department of Revenue and Customs has instructed all car dealers to immediately correct their practices of collecting Green Tax amounts that exceed the established rates.
Going forward, the Department notified that such violations will not be tolerated and that severe penalties will be imposed, with legal action taken in accordance with Bhutan’s tax laws and penal code.
The Department reassured the public that it is taking all necessary measures to prevent similar issues from occurring in the future.