To woo Indian tourists, Bhutan to sell gold at duty-free rates

NEW DELHI: Tourists visiting Bhutan who pay a ‘sustainable development fee’ can buy duty-free gold in Phuentsholing and Thimphu. The decision by the Himalayan nation is expected to benefit Indians the most, who are among the largest cohort of tourists visiting Bhutan.

According to the latest prices, 10 grams of 24-carat gold in India (as on February 25, 2023) costs Rs 57, 490. However, the same amount of gold costs Bhutanese Ngultrum BTN 40, 286 in Bhutan. Given that one Indian rupee roughly equals one BTN, Indians pay around Rs 40,286 for 10 grams of 24-carat gold in Bhutan.

However, to avail the benefit, Indian tourists have to pay Rs 1,200 per day as the sustainable development fee, and tourists have to stay at least one night at a hotel certified by Bhutan’s department of tourism.

In 2022, the National Assembly of Bhutan enacted a law, making it mandatory for tourists entering Bhutan to pay a tourism tax, known as the sustainable development fee (SDF). While Indians are required to pay Rs 1,200 per day per person, tourists from other countries pay anywhere between $65 to $200. Earlier, travellers from India, Maldives, and Bangladesh had been allowed free entry without any tourism charge. The SDF has been in force since September 2022, when Bhutan reopened its borders to tourists after 30 months of closure to prevent the spread of COVID-19.

As per the existing rules of the Central Board of Indirect Taxes and Customs, an Indian male can bring Rs 50,000 worth of gold (around 20gm) and an Indian woman can bring Rs 1 lakh worth of gold (around 40gm) tax-free into India from abroad.

The decision by the Bhutanese government was taken on February 21 in order “to mark the double auspicious day (Birth Anniversary of His Majesty The King and Losar, the Bhutanese New Year)”, according to state-run daily Kuensel.

“All SDF-paying tourists will be eligible to purchase duty-free gold as long as they spend at least one night at a Department of Tourism-certified hotel. The gold will be available for purchase from March 1, in Thimphu and Phuentsholing,” the newspaper report said.

The gold will be sold by duty-free outlets which normally sell luxury items and are owned by the Bhutanese finance ministry. Apart from being tax-free, Bhutan’s duty-free outlets “will not make any profit as the aim is to promote tourism”, the newspaper report added.

Courtesy: The Wire