Dorji Choden

While the High Court recently ruled in favour of State Trading Corporation of Bhutan Limited (STCBL), ordering Bhutan Chamber of Commerce and Industry (BCCI) to pay Nu 4.7 million, including a 12 percent penal interest, for the purchase of a Toyota Fortuner, the BCCI President clarified that the vehicle was bought as a pool vehicle for official use and not for personal purposes.

“The BCCI bought this vehicle, but the case was filed in my name, which seems unfair. The contract was made between BCCI and STCBL, not me and STCBL,” said BCCI President Tandy Wangchuk.

In October 2023, BCCI purchased the Toyota Fortuner from STCBL following an initial recommendation for tax exemption from then-finance minister Namgay Tshering.

Acting on this assurance, BCCI acquired the vehicle for Nu 6.2 million, making a down payment of Nu 2 million.

With the quota, the vehicle would have cost Nu 4.03 million, but without the tax exemption, the total cost rose to Nu 6.2 million.

When STCBL forwarded the tax exemption request to the Ministry of Finance, the proposal was rejected.

Tandy Wangchuk said that the purchase was made based on assurances from the then finance minister. “Even though the tax exemption was given by the minister, the finance secretary rejected the proposal multiple times, reasoning that the country’s economy was weak,” he added.

When the final payment became due in January 2024, BCCI requested an extension until March 2024 to settle the dues without penalties. However, STCBL maintained that it could not extend the deadline beyond 90 days.

As the BCCI failed to arrange the remaining payment, it requested STCBL to take back the vehicle.

“Since we had no other source to pay the money, we requested STCBL to take back the vehicle, which we haven’t been able to use. However, they said that they don’t take back purchased vehicles,” he said.

The Toyota Fortuner was originally returned to STCBL after being used by another organisation before being purchased again by BCCI.

The dispute escalated to court after STCBL sued BCCI for non-payment.

The Thimphu District Court initially rejected STCBL’s claim for penal interest on the outstanding balance. However, the High Court overturned this decision, ruling that the 12 percent penal interest was valid as it was a contractual compensation for damages rather than a financial penalty under the Financial Services Act of 2011.

The BCCI President revealed that former finance minister Namgay Tshering was summoned to court regarding the matter but remained neutral, despite having initially signed the tax exemption recommendation. “BCCI acted in good faith, based on the assurances given.”

The former finance minister Namgay Tshering explained that his comments on the request letter were the same as what he stated in court. He said he had no issue supporting the BCCI since they were handling the cost of the vehicle themselves.

“I couldn’t write ‘approved’ on the letter as I had to follow the proper process, so I wrote ‘strongly recommend’ instead. A week later, my term ended, so it was up to the secretary to decide how to take my recommendation,” he said.

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