Indian consignments delayed due to confusion over exports

Most business communities in Phuentsholing are yet to receive consignments post-Goods and Services Tax (GST) imposition in India.

For the past one and half months, no new consignments have reached the shops despite placing supply orders.

Godowns are running empty with existing stocks being depleted. Grocery retailers who have been importing from India have started to procure from Bhutanese wholesale dealers.

According to retail dealers, Indian suppliers are reluctant to supply without clear cut information on GST for exports to Bhutan. They have not made any bills for payment as they are confused whether they should include GST for products exported to Bhutan. “They are unsure about including GST or not,” a retailer said.

For some, the consignments have reached the Jaigaon border but have not entered Bhutan. The consignments have to enter after completing required formalities for GST at the land and customs checkpoint.

“Without that, we cannot place orders or receive any consignments,” said Manager at Dolma Enterprises, BL Sharma. The electronic wholesale dealer received two new consignments but not any since then.

For exporters, the GST for the product has to be paid at source and the price is determined since then. But some believe that since GST is exempted for import to Bhutan, the suppliers are still confused over the pricing of their goods. “They may not have different prices for the same goods,” another wholesaler said. He has also not received any consignments since GST regime implementation.

Some traders have goods delivery dues to the government departments and are liable to pay penalties for the late delivery. These traders have won from competitive bidders to supply hardware materials in open bidding tenders. “Since they have not started billing for the products, the products are not delivered. We have pending deliveries to some of our clients,” proprietor of Aggarwal Trading, Sunil Aggarwal, said. He has pending dues worth Nu 1.8mn to the clients. “I am worried about the penalties,” he said.

Most traders who deal with Indian products are now running out of stock. Proprietor of Tshogdag Enterprise, Pradeep Rai, said that goods have not been delivered post-July despite placing orders.

“They say that prices are not yet confirmed for Bhutanese customers so they are not preparing any bills,” a sanitary hardware dealer said.

However, traders are hopeful that the issue will be resolved soon and smooth trade will resume.

Traders who import goods from third countries though have an advantage now. “Since we buy products from Thimphu’s wholesale dealers who import through air, GST has not affected us,” said a retailer, Tshering Wangmo.

Meanwhile, Naman Siddarth, a consultant who works closely with Association of Bhutanese Industries and Bhutan Chamber of Commerce and industries said that the prices of goods should fall for Bhutanese customers after GST.

“There should not be a problem billing for Bhutan-bound goods as export to Bhutan is GST-free,” he said.

Krishna Ghalley from Phuentsholing