Goods and aircraft reach the Gelephu Mindfulness City through customs airports, customs stations and free trade zones that sit outside the customs territory, and a carrier's tax position is fixed the moment its aircraft calls at Gelephu. Basnet Law Pte. Ltd. advises airlines, freight and logistics operators, warehouse licensees and their financiers on the Customs Act 2025, the customs and sales tax laws applied by Schedule C to the Application of Laws Act 2024, and the tax rules that apply to carriers serving Gelephu. This page explains how the framework works and how we advise an operation inside it.
Our legal advisory
- Customs compliance under the Customs Act 2025, including declarations that must give "a full and true account" and the offences for false declarations and fraudulent evasion.
- Advising on structuring operations around customs airports, customs stations and free trade zones, which sit outside the "customs territory" as the Act defines it.
- Legal advice on licensed warehouse, manufacturing and duty-free licence requirements, and drawback claims on re-export.
- Tax advice for non-resident carriers, whose profits from passengers, mail, livestock or goods loaded in GMC are treated under the Income Tax Act 2025 as accruing in GMC, with the transhipment exception and the certificate-based assessment method.
- Aircraft and equipment finance, including registration of charges over aircraft within 30 days under the Companies Act 2025.
- Carriage, freight forwarding and warehousing contracts under GMC law, with the risk and property rules of the Sale of Goods Act 2026.
- Advice on insurance for marine, aviation and transport risks, which is Class 4 insurance under the Financial Services Act 2025.
How GMC customs and aviation law works, in plain terms
Aviation and Logistics is one of the eight priority industries listed by the Gelephu Mindfulness City Authority. The legal framework is the Customs Act 2025, treated as having come into operation on 26 December 2024, which repealed the former Customs Act 1960 and operates alongside the Kingdom of Bhutan's Sales Tax, Customs and Excise laws, which the Application of Laws Act 2024 applies in GMC through its Schedule C. All "$" amounts in the Customs Act 2025 are US dollars.
The Act defines the customs territory as GMC excluding any free trade zone. Import and export by air may take place only at customs airports, by rail at customs stations, and by road subject to the Director-General's approved times and conditions for dutiable goods. Dutiable goods arriving by air or road are first deposited in a free trade zone unless the Director-General exempts them. Carriers must lodge an inward manifest within 24 hours of arrival and an outward manifest within 48 hours. Duty rates are prescribed by the designated officer by Gazette order, and classes of goods or persons may be exempted by order or direction; the Act does not fix rates.
Warehousing is a licensed activity under the Act. The Act provides for government warehouses and licensed private warehouses, manufacturing and bottling licences for dutiable goods, duty-free shops for tourists and composite licences. Drawback is available on the re-export of unused goods within 6 months, with a minimum claim of $100, and for goods used in manufacture and exported within 12 months. Refund claims and short-levy demands run for 5 years, with no limit for fraud. Customs rulings may be obtained from the Director-General under the Schedule to the Act.
For carriers, the Income Tax Act 2025 deems a non-resident's "full profits arising from the carriage of passengers, mail, livestock or goods shipped, or loaded into an aircraft, in GMC" to accrue in GMC where its aircraft calls at an aerodrome or airport in GMC, except for cargo brought solely for transhipment or transfer between aircraft or ship. A non-resident air transport business is assessed as if it were a non-resident shipowner, using the certificate-based method the Act sets for shipowners.
Who this is for
- Airlines and charter operators planning services to Gelephu.
- Freight forwarders, 3PLs and customs brokers.
- Warehouse and free trade zone operators.
- Lessors and lenders financing aircraft and logistics assets.
How a legal advisory engagement runs
- Operating model. Advice on where goods and aircraft enter, which zone or warehouse applies and which licences are required.
- Licensing. Advice on warehouse, manufacturing or duty-free licence requirements and customs rulings.
- Compliance design. Advice on declaration, manifest and record procedures under the Act's electronic service.
- Tax structuring. The carrier's deemed-profit exposure, the shipowner-method assessment and any double taxation arrangement.
- Contracts and finance. Advice on carriage, handling and finance documents, and on the deadline for charge registrations.
Frequently asked questions
Does a foreign airline pay GMC tax on flights to Gelephu?
Profits from passengers, mail, livestock or goods loaded in GMC are deemed under the Income Tax Act 2025 to accrue in GMC and are assessed under the shipowner method, unless a double taxation arrangement provides otherwise. Transhipment cargo is excluded from the regime. We work out the exposure before the first scheduled service.
Can I import goods by road into GMC?
Yes, subject to the Director-General's approved times and conditions for dutiable goods, which must first be deposited in a free trade zone unless exempted.
How long do I have to lodge a manifest?
An inward manifest within 24 hours of arrival and an outward manifest within 48 hours, under the Customs Act 2025.
Is duty refundable on re-exported goods?
Drawback applies to unused goods re-exported within 6 months, subject to a $100 minimum claim, and to goods used in manufacture and exported within 12 months. We advise on the claim and the supporting records.
Are customs duty rates published in the Act?
No. Rates are set by the designated officer by Gazette order, and Schedule C applies Bhutan's customs tariff laws in GMC. We confirm the current rate for each tariff line.
Contact
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
