January 16, 2026
THIMPHU – More than 1,900 commodities previously taxed at higher Bhutan Sales Tax (BST) rates are expected to become cheaper with the introduction of the five percent Goods and Services Tax (GST).
However, consumers may face short-term price pressures during the transition, as goods imported or purchased before January 1 continue to circulate with BST already embedded in their costs.
These products are now subject to GST at the point of sale, creating a temporary layer of double taxation that is expected to ease once pre-GST inventories are depleted.
Finance Minister Lekey Dorji said that 1,522 commodities previously taxed at 10 percent BST should see noticeable price reductions under GST. These include footwear, clothing and textiles, televisions, machinery, steel products, sanitary ware, kitchen and household items, and betel leaves.
Goods that were subject to even higher BST rates, ranging from 15 percent to 30 percent and above, are expected to see steeper price declines. Items taxed at 15 percent BST included cement, watches, cosmetics, preserved fruits and vegetables, carpets, bags and suitcases. Commodities taxed at 20 percent BST covered noodles and pasta, bread and pastries, pan masala and supari, furniture made of metal and wood, and sweet biscuits.
At the highest end of the scale, goods such as fruit juices, betel nuts, plastic carry bags, ice creams, and motorcycles between 500cc and 800cc, which previously attracted 30 percent BST, are expected to become substantially cheaper under the GST framework.
At the same time, the finance minister acknowledged that some price increases are likely. A total of 2,252 commodities that were previously zero-rated under BST—excluding essential goods such as rice, salt, edible oil, sanitary napkins and wheelchairs, which remain tax-exempt—may see prices rise with the introduction of GST.
Zero-rated goods under the former regime included vegetables, fresh meat and fruits, eggs, basic medicines, agricultural seeds and tools, computers and laptops, mobile phones, and rice cookers. In addition, four commodities previously taxed at 2.5 percent BST and three taxed at four percent BST could become marginally more expensive.
Meanwhile, prices for 1,709 commodities that attracted five percent BST are expected to remain unchanged under GST. These include mattresses, electrical equipment, vehicle parts, diesel, petrol, tea leaves, coffee and yarn.
Calling for vigilance during the transition, the finance minister urged consumers to insist on fair pricing that reflects the new tax rates. He said the Competition and Consumer Affairs Authority under the Ministry of Industry, Commerce and Employment has been instructed to closely monitor market prices.
Consumers have also been encouraged to report irregular pricing, as authorities seek to prevent profiteering and ensure that the intended benefits of GST are passed on to households.