Training institutes adjust to GST and market pressures

2026-03-16 - 11:15

The introduction of the Goods and Services Tax (GST) is reshaping how professional training institutes operate in Bhutan, affecting course pricing, administration, and student enrolment. Institutes say the new tax has added financial pressure in an already competitive market. One institute, choosing to remain anonymous, said that competition has made it difficult to adjust fees after the GST rollout. “There are more institutions in the market, so people compare prices rather than the quality of training. Our initial course fee was Nu 40,000, while other institutes charged around Nu 27,000. Adding GST on top has made it challenging to stay competitive,” the institute said. To retain students, some institutes have had to offer discounts, even as confusion over GST procedures continues. “We have had to give discounts for some courses. It’s something we know is necessary, but there are still questions about compliance,” the institute added. The institute also said it has faced challenges in hiring qualified trainers and clarifying GST-related procedures. NLD training institute said officials from the Department of Revenue and Customs (DRC) had reached out to them regarding the implementation of GST in their courses. The institute said, “People from DRC have reached out to us regarding the implementation of the GST in our courses. We do not have a system in place since it is not compulsory but we add the 5% GST to their total fees and create a bill currently. We have already filed our first GST.” Similarly, another institute said it has already begun complying with the GST system. The institute said, “We have already filed our GST from January.” And it further added, “It has become hard for us to get trained professionals as trainers for the courses. It has been difficult for us. We have followed up with the DRC regarding these confusions. During the workshop held last year by DRC, we did go but it was all theory and we had to constantly follow up with DRC regarding this as well. It has also impacted the number of people who enroll in our courses.” Before the introduction of the GST system, only tourist-rated hotels and restaurants were required to collect and pay the 10 percent Bhutan Sales Tax (BST) on services. With the implementation of GST, most services now fall under the tax system, including professional training institutions, except for certain excluded services such as basic health, education (tuition) and financial services. Service-based businesses, similar to those dealing with goods, are also eligible to claim Input Tax Credit. For instance, when a service-based company pays GST on expenses such as internet, electricity, legal services or equipment, the GST paid on these items can be claimed later as Input Tax Credit. Services covered under GST include tourism, telecommunication, repair and maintenance, rental and hiring, construction, transport, utility, entertainment and recreational services, lottery supply, insurance, printing and publication, postal and courier services, engineering services, management services, sales and marketing services and electronic services. The scope of GST also extends to professional services such as accountancy, IT services, architecture, training, legal services, dance, art and crafts, interior design, human resources and consultancy.