As the Goods and Services Tax takes effect, only education and health services remain exempt. Service providers meeting the Nu 5 M turnover threshold, or registered with the Department of Revenue and Customs, will be charging GST. Service providers are required to clearly reflect the tax amount and taxpayer number on invoices.
The Goods and Services Tax or GST will not be levied on core public services such as education and healthcare. However, cosmetic procedures such as dental braces and private tuition services are not exempt and will attract GST.
In the financial sector, several banking services will remain exempt from GST. These include the provision and management of loans, operation of deposit and current accounts, payment and fund transfer services, issuance of cheques, trading in shares and bonds, management of pension and provident funds, as well as life insurance and reinsurance services.
Meanwhile, commonly used utilities such as telecommunication services, electricity, gas and LPG, and water bills will be subject to a five per cent GST.
Restaurants and food services and automobile workshop services will also attract GST when provided by GST-registered entities.
According to the Department of Revenue and Customs, cable television service charges in districts outside Thimphu are likely to remain exempt from GST, as these service providers are not registered under the GST regime.
Taxi fares will not be subject to GST, as taxi operators are not licensed business holders. However, GST will be applicable to public transport services operated by companies that are GST registrants or have an annual turnover exceeding five million ngultrum.
In addition, GST is applicable on commercial rental spaces, whereas residential rentals are exempt.
So far, around 3,820 businesses have registered for GST, of which 1,820 operate in Thimphu alone.