The Bhutanese Leading the way.
In response to the recent overcharging of green tax by the 11 car dealers, the Department of Revenue and Customs (DRC) issued a public notice stating that the dealers should refund their customers within 15th February, 2025. The Minister of Finance, Lyonpo Lekey Dorji stated that if the refund is not made within the given deadline, the DRC will invoke the penal provisions as per the relevant Tax Act and enforce them without fear or favour.
Following the lifting of the vehicle import moratorium, a surge in vehicle purchases led to widespread dissatisfaction among the public due to escalating prices. Many people pointed to high taxes as the primary reason for the price increases. In response, the government tasked the DRC with reviewing vehicle pricing structures to identify the factors contributing to the price hikes.
The DRC conducted an in-depth analysis, examining import declarations, manufacturer invoices (submitted at entry), and dealer sales invoices. The investigation revealed a significant inconsistency in the application of Green Tax. Specifically, the GT recorded in import declarations was much lower than the GT charged to customers in dealer invoices.
Upon further investigation, DRC found 11 car dealers inflating the GT amounts, which resulted in a total overcharging of Nu 30.9 million for 4,345 customers. The dealers have been ordered to issue refunds to the affected customers by February 15, 2025. This issue stemmed from errors in tax calculations, leading to unfair charges for vehicle buyers.
Lyonpo stated that the issues that have surfaced recently should not happen again and that the DRC has adopted the systematic procedures before a vehicle can be registered with Bhutan Construction and Transport Authority (BCTA).
The Regional Revenue and Customs Offices will endorse the vehicle Sales Invoices and the Import Declaration of the vehicle.
Then the critical thing in these two documents like the taxes will be thoroughly cross checked to see that the tax amount paid at the point of entry is the same tax amount charged to a customer in the sales invoice.
Lyonpo further stated, “The BCTA shall only allot the registration numbers upon the endorsement of the documents by the RRCOs and there will be zero tolerance from the ministry and the government for non-adherence to the procedures, be it by the officials of DRC or BCTA under whatever reasons or any manipulation of sales invoices by any car dealers.”
