The Bhutanese Leading the way.
So far, it is well known that businesses with annual turnover of Nu 5 million (mn) and above come under compulsory GST registration.
However, what is not known is that if a businessowner has multiple licenses under his or her name, and the combined are a turnover of Nu 5 mn or more, then all the businesses come under GST registration.
This was clarified by an official of the Department of Revenue and Customs (DRC) for those who are not aware.
For example, if a person holds three business licences with annual turnovers of Nu 1.5 mn, Nu 2 mn, and Nu 3 mn, the combined turnover comes to Nu 6.5 mn. As a result, all three businesses must be registered under GST.
Individually, each business may not qualify for GST registration, but when they are owned by the same person, they are assessed together.
The DRC official said that as the country is currently in a transition phase, authorities are mainly encouraging businesses to register voluntarily. However, in the future, based on tax information, eligible businesses will be approached for compulsory registration.
He said this practice is not new and was followed under the earlier BST regime, when surveys were conducted to identify businesses required to pay sales tax.
If a businessperson believes they can avoid registration but imports goods worth Nu 5 mn or more in a year, import data alone will make them liable for GST registration.
The DRC also has access to companies’ tax records and is aware of which businesses are eligible.
According to the DRC, around 4,400 companies and agencies, including government bodies, are eligible for GST registration, and so far, more than 4,000 have already registered.
