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The Department of Revenue and Customs (DRC) under the Ministry of Finance has introduced a comprehensive set of interim regulations for alcohol, pan masala, and tobacco, effective from July 25 to December 31, 2025. The measures, issued under the authority of the Customs Act of Bhutan 2017 and directives from the Cabinet Secretariat, aim to facilitate a smooth transition to the new excise regime scheduled to begin on January 1, 2026. During this transitional period, alcohol, pan masala, and tobacco are classified as “Controlled Goods”. This designation allows the DRC to regulate imports, distribution, and domestic sales while ensuring orderly market conduct. All imports of these controlled goods must be authorized through prior import permits, issued by the nearest Regional Revenue and Customs Office (RRCO). Permits are non-transferable, valid for a single consignment, and limited to each importer’s verified monthly average, based on historical import records. For alcohol, releases from the Army Welfare Project (AWP) bonded warehouse require prior permits and are limited to authorized distributors with verified distribution histories. Similarly, domestic beer distributed directly to retailers must be preceded by a permit, with monthly quotas determined by past procurement volumes. Distributors are required to report all sales monthly to the RRCOs. Pan masala manufacturers and distributors are also subject to permit requirements, with sales and distribution capped according to verified historical averages. Regular reporting to RRCOs is mandatory. Only existing licensed importers and distributors with verifiable histories as of June 2025 are eligible for permits. New entrants are temporarily restricted from importing or distributing controlled goods during the interim regulatory period. Individual import limits have been specified to prevent excessive stockpiling: • Cigarettes: 800 per month • Bidis: 1,200 per month • Cigars: 150 per month • Other tobacco products: 750 grams per month From December 1 to 31, 2025, all imports of alcohol, pan masala, and tobacco will be fully suspended, requiring importers to plan their November consignments accordingly. Traders must declare all imports at entry points, maintain accurate purchase and sales records, and submit monthly reports to the RRCOs. The DRC will conduct inspections and audits to ensure compliance. The regulations also include price controls and market conduct safeguards. Importers and distributors are prohibited from stockpiling or creating artificial scarcity, and selling prices must reflect prevailing market rates. Any manipulative or collusive behavior will be subject to strict penalties. Violations of the interim regulations may result in seizure of goods, fines, and other legal actions under Bhutanese law. The DRC has established confidential reporting channels for credible information on non-compliance or market misconduct. The interim regulatory framework underscores Bhutan’s commitment to legal compliance, fair market practices, and orderly implementation of the new excise regime. By regulating controlled goods during this transitional phase, the DRC aims to minimize market disruption, ensure consumer protection, and lay the groundwork for the 2026 excise system. As Bhutan prepares for the next phase of excise reforms, businesses, distributors, and consumers are advised to adhere strictly to the interim regulations, maintain accurate documentation, and plan operations to meet the year-end import suspension. Sangay Rabten From Thimphu
