Despite expectations that the Goods and Services Tax (GST) would lower the prices of some commodities, concerns have emerged over rising costs of certain products and the lack of noticeable reductions in others.
Items such as iced coffee, which were expected to become cheaper under GST, have instead seen price increases, while the prices of bread, noodles, juices, and other everyday goods have either remained unchanged or risen. Concerns were also raised over the possibility of monopolistic practices by distributors or importers, potentially preventing consumers from benefiting from tax reductions.
The issue was raised during Question Hour in the Parliament by Member of Parliament Tashi Tenzin, who questioned Lyonpo Namgay Dorji, Minister for the Ministry of Industry, Commerce and Employment (MoICE), on the actual impact of GST on market prices.
Responding to the concerns, Lyonpo Namgay Dorji said that the government and relevant authorities are actively monitoring the market to better understand price changes and identify factors contributing to rising costs.
To improve price transparency, the government is developing a Price Watch App, a mobile platform that will allow consumers to compare the prices of goods across different shops. According to the minister, the app will help consumers identify price differences, compare rates before making purchases, and choose more affordable options. By making pricing information publicly accessible, the platform is also expected to discourage overpricing and encourage retailers to remain competitive, as consumers will be able to easily identify unusually high prices.
The minister also announced that the government plans to introduce a Competition Bill during the upcoming winter session of Parliament. The proposed legislation is expected to curb monopolistic practices by preventing businesses from unfairly controlling markets, fixing prices, or limiting competition. It would also promote fair market practices by creating rules to prevent anti-competitive behaviour among distributors, importers, and suppliers, helping ensure that price reductions, including those resulting from GST, are passed on to consumers.
Additionally, a Consumer Protection Act is expected to be enacted to safeguard consumers against overpricing and unfair trade practices. The minister said the law would strengthen consumer rights by introducing measures to address misleading pricing, unjustified price hikes, false advertising, and exploitative business practices. It is also expected to create mechanisms for complaints and enforcement, helping ensure that businesses pass GST-related price reductions on to consumers rather than retaining the benefits.
Lyonpo Namgay Dorji attributed part of the price increase to rising fuel costs, noting that transportation expenses, fuel prices, and exchange rate fluctuations continue to affect the cost of goods in the market.
He added that the government has also been working to educate the public about GST and its intended benefits. Through collaboration with media outlets, the ministry aims to improve public understanding of the tax system and reduce misinformation.
The minister reiterated that enhanced market monitoring, legal reforms, public awareness campaigns, and digital tools such as the Price Watch App form part of the government’s broader strategy to ensure consumers fully benefit from GST implementation.
Sherab Dorji, Thimphu
