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Two weeks after the new Goods and Services Tax (GST) regime that was initiated in India, Bhutanese industries have not been able to export to India due to unclear directions and confusions among the parties of the two countries.

GST hits Bhutanese industries

Two weeks after the new Goods and Services Tax  (GST) regime that was initiated in India, Bhutanese industries have not been able to export to India due to unclear directions and confusions among the parties of the two countries.

Industries in Pasakha are losing in millions.

One industrialist in Pasakha, asking anonymity, said his company has not made a single export since July 1.

“We tried to export our first consignment yesterday but to no avail,” he said. “There are other industries in similar situation.”

The industrialist said that the information fed by the locals and the centre vary and are not clear. Industries are yet to learn about theoretical understanding and practical implications of GST.

Most of the 15 industrial establishments in Pasakha are affected.

A ferrosilicon manufacturer in Pasakha has not been able to export about 1,700 metric tonnes (MT) of product after the GST became effective.

Another industry in Pasakha has stockpiled 2,118MT of goods to be exported.

However, it has been understood that sales of the industries are not affected much as orders were made before the implementation of the new GST.

Bringing in raw materials from India, though, has been a problem.

According to one industrialist, the confusion between the parties from Bhutan and India has also resulted in network and supply chain distortion.

As of now, one of the major dilemmas is about the payment of tax at the customs station in Jaigaon while exporting. Most of the Indian importers are based in different places across India and payment of tax at the customs is not determined whether the exporters would do it or importers would come all the way.

Kuensel learnt that Indian importers are asking Bhutanese exporters to pay the tax at customs. Arrangements to cover risks in refund are not yet determined.

A source said that the one percent landing tax that was levied before the new GST, which was supposed to be cancelled, is yet to be sorted out.

Starting July 13, Jaigaon Transporters Welfare Association (JTWA) has restricted entry and exit of vehicles carrying goods from Jaigaon. Unclear of the change the GST brought at the customs system, the association has mentioned and notified that it will not carry goods related to both export and import until the import-export system at the Jaigaon land customs starts working properly.

The association had demanded better facilities and experienced manpower to deal with import and export related to Bhutan.

Citing the free trade relations between India and Bhutan, JTWA also demanded restrictions and formalities to be minimised.

Rajesh Rai | Phuentsholing

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