With the nationwide rollout of the Goods and Services Tax (GST), the Department of Revenue and Customs (DRC) has issued an unequivocal warning to the business community: any business with an annual turnover of Nu 5 million (M) or more must register for GST—without exception.
The directive marks a major shift in Bhutan’s tax landscape and signals the government’s intent to tighten tax compliance, formalise the economy, and close long-standing loopholes that allowed many high-turnover businesses to operate outside the tax net. Officials say GST is not merely a new tax, but a structural reform aimed at strengthening revenue collection and improving transparency.
“GST is designed to bring fairness and accountability to the system,” officials said, stressing that all eligible businesses must comply.
Once registered, businesses are legally obligated to charge a 5 percent GST on all taxable goods and services. They must also issue official GST-inclusive invoices to customers for every transaction. These invoices serve as formal proof that GST has been charged and collected, and they are critical for audit, verification, and consumer protection purposes.
Failure to issue GST invoices, officials warned, constitutes a direct violation of the law and may attract penalties.
“The invoice is not optional,” said Kuenzang Thinley, Collector of GST and BITs Project Manager at the DRC. “It is a legal requirement and a fundamental part of the GST system.”
In a move designed to enhance visibility and accountability, all GST-registered businesses must prominently display their GST registration certificates at their place of business. This requirement allows consumers to easily verify whether a business is legally registered and compliant under the new tax regime.
“Consumers have the right to know whether a business is legally registered under GST,” Kuenzang said. “Displaying the certificate is a simple but powerful way to promote transparency.”
Businesses that fail to display their certificates may face enforcement action, as the absence of visible registration raises red flags for regulators and consumers alike.
Consumer protection has emerged as a central pillar of the GST framework. Under the new system, consumers are no longer passive participants—they are empowered to play an active role in enforcing compliance.
“If a business fails to register for GST, does not issue invoices, or does not display its GST certificate, consumers can file complaints with the Competition and Consumer Affairs Authority (CCAA),” Kuenzang said.
He added that the CCAA has the mandate to investigate complaints and initiate legal action against non-compliant businesses, reinforcing the government’s message that GST violations will not be taken lightly.
Officials believe this consumer-driven oversight will significantly strengthen compliance, as businesses risk not only inspections but also public complaints and legal consequences.
While maintaining a firm stance on enforcement, the DRC has acknowledged that the transition to GST will not be without challenges. Many small and medium-sized businesses, particularly those unfamiliar with digital systems and formal accounting, may struggle to understand and adapt to the new requirements.
“We are aware that there will be difficulties, especially in the early stages,” Kuenzang said. “But the department is actively monitoring the rollout and providing guidance and support to help businesses become compliant.”
According to the DRC, outreach programs, awareness campaigns, and technical assistance are being rolled out to help businesses understand registration procedures, invoicing requirements, and reporting obligations.
Enforcement, however, will be strict. Customs officials will conduct regular field visits and inspections to ensure businesses are complying with GST regulations.
“Currently, only a few thousand businesses are registered for GST,” Kuenzang said. “This makes monitoring manageable at this stage, and it allows us to focus on ensuring proper compliance.”
To ensure uniform enforcement across the country, the DRC has circulated detailed operational guidelines and enforcement strategies to all eight regional customs offices. These guidelines outline inspection procedures, compliance checks, and mechanisms for assisting businesses while addressing violations.
As GST takes full effect, authorities say the message could not be clearer: businesses with an annual turnover of Nu 5M or more must register for GST, issue GST invoices, and display their registration certificates.
Failure to comply could lead to consumer complaints, inspections, penalties, and legal action. With enforcement tightening and consumer awareness increasing, operating outside the GST framework is becoming increasingly risky.
For Bhutan’s business community, GST compliance is no longer a matter of choice or convenience—it is now the price of doing business in a rapidly formalising economy.
Sherab Dorji
Ftom Thimphu
