The prices of the goods imported from third country have not decreased. This is because of increased transportation cost.
National Council member from Punakha, Lhaki Dolma, said that prices of the goods had not decreased even after rationalisation and implementation of Custom Duty (CD).
She cited an example of sanitary pads imported from the third countries. Prices had remained the same because of the increase in the fuel and transportation cost.
Finance Minister Namgay Tshering said that had CD not been rationalised to 10 percent and that of necessary products to zero percent, the prices of the goods would have increased drastically.
About 90 percent of goods are imported and out of which 70 percent is from India.
“Due to Covid-19, production and supply chain has been disturbed around the world,” Lyonpo said, which affected import-dependent countries like Bhutan.
The prices of commodities, Lyonpo said, could decrease as the situation improves.
While introducing the Custom Duty (Amendment) Bill 2021 to the House, Lyonpo said that amendment was proposed mainly to harmonise commodity description and coding system.
Since Bhutan is party to the World Customs Organization (2006), Harmonized System (HS) is necessary.
Lyonpo said that the HS Convention is used worldwide for the uniform classification of goods traded internationally into a six digit code which serves as the basis for levying taxes, duties and for compilation of international trade statistic in 211 member countries.
It is revised every five years and changes should be made in line with the 7th edition of HS, the Custom Duty, Sales Tax, and Green Tax. Goods and Services Tax schedules should be amended accordingly.
Bhutan also follows a system called the Bhutan Trade Classification and Tariff Schedule (2007).
Lyonpo said that revision is due in January 2022 and that reason for proposing the changes was as per the changes in environmental, social concerns, technological advancement and trade volumes, among others.
Lyonpo said that the car battery is given separate coding since it affects the environment and that with advancement of technology there is a need for a separate coding.
For example, with almost no usage of telephone, trade volume has decreased and its coding has been removed.
Lyonpo said that to encourage the use of alternate sources of energy, new duty rates proposed in the Bill were all within the existing rate except for the HS code for Solar Water Heater.
Approving the proposed amendments from the economic affairs committee, the House referred the Bills back to the committee to prepare for adoption.