The Civil Society Organization (Amendment) Bill of Bhutan 2021, Private Members Bill and three Money Bills, the Customs Duty (Amendment) Bill of Bhutan 2021, Tax (Amendment) Bill of Bhutan 2021, and Goods and Services Tax (Amendment) Bill of Bhutan 2021 were tabled during the first day of sixth session of the third parliament.
The Finance Minister submitted that Amendment of the Money Bills has been introduced, due to the revisions made in the “Convention on the Harmonized Commodity Description and Coding System” commonly known as HS of which Bhutan has been a contracting party to since 27th October 2006. The Revisions to the HS have resulted in changes in the Bhutan Trade Classification (BTC) Code, Tariff Schedule, and textual changes in the Schedule in the Acts.
The Bills were then referred to the relevant Committees for review.
Opposition Leader Dorji Wangdi asked Finance minister Namgay Tshering why the reduction in Customs Duty Bill( Tax levied on imported goods) failed to make any impact after it was passed six months ago.
To which the Lyonpo replied that it is indeed true that the past customs duty bill, which reduced the taxes from as low as 10 percent to zero, should actually benefit the importers and consumers but its effect was not felt because of price increase at the source due scarcity in production in the view of Covid situation (supply-chain disruption). Secondly the price increase can be attributed to increase in transportation charges. But that doesn’t mean the Customs Duty Bill failed to make any impact, the prices would have been even higher if the Bill was not implemented.
No matter how powerful a nation is, the price of fuels cannot be changed on whim, Lyonpo cited.
The “Convention on the Harmonized Commodity Description and Coding System” commonly known as HS Convention is used worldwide for the uniform classification of goods traded internationally into a six digit code. It serves as the basis for levying taxes, duties and for the compilation of international trade statistics in 211 economies (of which 158 are ContractingParties to the HS Convention). It is administered by World Customs Organization (WCO) and are revised every 5 years. Bhutan became a contracting party to HS Convention on 27th October 2006 and have formally adopted to HS from 01st January 2007.
“Every five years the WCO reviews the Bhutan Trade Classifications code, some gets redundant. Whenever a new product is introduced in Bhutan, new codes are introduced as well. The BTC code is integrated with the WCO code,” said MP Tshewang Lhangmo.
The new HS 2022 edition has a total of 351 sets of amendments covering a wide range of goods moving across borders.
Some of the factors for revision of HS 2022 are to address the environmental and social concerns of the world, technological changes and obsolescence of products, trade patterns and new stream of products, global trade volume of that particular code and editorial changes.
The 351 sets of amendments to HS 2022 has led to creation of new 400 BTC codes and deletion of 170 BTC codes.