The government of India (GoI) declared a total excise duty refund (EDR) of Nu 4.001B (billion) to Bhutan for 2016, yesterday in Thimphu.
The refund is an increase of Nu 1.084B from the previous year. Bhutan received Nu 2.91B as EDR for 2015.
A press release on EDR 2016 states that the increase is due to improved recording of imports data and maintenance of documents in a manner desired by GoI delegates.
Excise duty is an indirect tax levied on goods and commodities manufactured domestically in India. As per the bilateral trade agreement, the Indian government refunds to Bhutan the tax it levies on goods India exports to Bhutan on an annual basis.
Finance minister Namgay Dorji said EDR has played an important role in the country since its inception in 2008 and that it would be closed after the assessment of about six months EDR for 2017.
GoI’s director general of Directorate General of Performance Management (Customs and Central excise), Devendra Singh, said that a team from GoI would be visiting Bhutan to deliberate on EDR for 2017 and the effects of goods and services tax (GST) on EDR in May or June this year.
A meeting between Bhutanese and GoI delegates was also held yesterday morning to discuss and finalise the EDR for 2016. Issues such as disbursement of EDR amount for 2016, EDR claim for 2017 and capacity building of custom officials at the National Academy of Customs, Excise and Narcotics, India was discussed during the meeting.
The Bhutanese delegation was led by Yonten Namgyel, director of revenue and customs.
A delegation led by Devendra Singh had visited Bhutan for verification and quantification of the EDR 2016 from January 15 to 23 this year.