Bhutan: NA rejects NC’s recommendations to withdraw GST Bill


The National Assembly (NA) on June 27 rejected the National Council’s (NC) recommendations to withdraw the Goods and Services Tax (Amendment) Bill of Bhutan 2022.

The NA passed the Bill on June 20 this year and was forwarded to the National Council.

The Bill was passed stating that the Act would come into force from the day the Parliament approves for enforcement when the goods and services tax (GST) system is ready.

However, the NC did not agree with the deferment of the commencement date of the Bill citing legality and concerns about the preparedness of the government, and the need to draw a clear distinction between the money Bill and the financial Bill. The NC also recommended the amendment of Section 46B of the Public Finance (Amendment) Act 2012.

Section 46B of the Act prescribes that the money Bills shall be applied retroactively from the date it was initially tabled in the National Assembly.

According to the National Council, Section 46B of the Public Finance (Amendment) Act 2012 is yet to be amended. The House said that it is concerned that until such time the Section 46B is amended, any deviation from it would amount to willful violation of the prevailing law, and to accept and pass any bill that ultra-vires the law passed by the Parliament is a threat to rule of law and legislative norms.

Supporting NC’s recommendations, Bartsham-Shongphu MP Passang Dorji said that there are risks of cancellation of the GST Act in future, and discontinuing the work would be a wasteful expenditure. Finance Minister Namgay Tshering said that the finance ministry is reviewing the Public Finance (Amendment) Act 2012 and the house as the legislative committee can supersede certain clauses.

Lyonpo said that increase in tax or the government spending, appropriation or payment of money out of the consolidated fund, is financial and money Bills.

He added that the GST system is important because Bhutan would not be able to do trade with India, Singapore, or Thailand otherwise.

Supporting NC, Opposition Leader Dorji Wangdi said that the money Bill and financial Bill are different.

He added that before the Speaker makes an announcement of the Bill to the house, the Bill has to be submitted to the economic and finance committee to decide whether it is a money or a financial Bill.

The Bill will be submitted for Royal Assent as per the Rules of Procedure.