The GST Act, which was passed in February last year, was supposed to come into effect on July 1 this year. But the government is not ready for its implementation as the GST software is being developed.

The National Assembly yesterday passed the GST (amendment) Bill 2021, which will be forwarded to the National Council (NC) for deliberation. The NC’s view on the Bill, however, will not be legally binding.

All 39 members present in the House voted for deferring implementation of the Bill from July 1, 2022. The GST Bill should be passed in the same session, as it is a money Bill.

The government last week had proposed deferment of the Bill.   According to Finance Minister Namgay Tshering, the GST software worth Nu 600 million was being developed and it is expected to take up to six months to complete.

“The Thimphu Techpark, which is developing the software with technical experts from Armenia, has said that it would be completed soon. But we don’t want to rush on implementation,” he said.

The government has also sought time for its implementation in view of the need to train local technicians and officials on how to use the GST system. The government also wants to conduct awareness programmes among the business community to make the implementation of the GST system successful.

However, the government will have to wait for the pandemic situation to subside for a full-fledged awareness programme.

The GST (Amendment) Bill was referred to the economic and finance committee of the National Assembly as a Money Bill for review. The House deliberated the Bill and agreed to the government’s proposal.

The government hopes to recoup an additional Nu 3B in revenue with the implementation of the Act.

GST is a consumption-based tax and it is supposed to eliminate the cascading taxation effect. Just like any other GST regime across the globe, business entities and individuals in the country would be levied GST on all goods and services either manufactured within or imported.

By MB Subba

Edited By Tshering Palden