GST on Gold, GST Rate on Gold Ornaments and Jewellery 2017

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GST on Gold: GST Rate on Gold Ornaments and Jewellery. Schedule of GST Rate on Gold in India have been provided by GST Council very soon as you may download Schedule for category list on gold and available in PDF Download. The Rates of GST on Gold (Ornaments and Jewellery) in India is not decided till now by GST Council. There are lot of questions for GST on Gold like – Does GST going to increase gold price?, How will the implementation of GST Bill effect the Gold prices in India?, Will the price of gold come down after the GST is implemented?, Will gold ornaments be costly due to the GST?, What will be the effect of GST on gold?, What is the impact of GST in gold prices?, What is the effect of GST on gold’s price in India?, What effect will GST have on gold prices? etc. In this article we provide complete details for GST on Gold and GST Rates on Gold 2017….

GST on Gold

GST on Gold, GST Rate on Gold Ornaments and Jewellery

While tax rates on gold jewellery in the upcoming GST regime are still undecided, jewellers here are gearing up to make a case before Union revenue secretary Hasmukh Adhia who will visit Karnataka on May 29 and 30.

GST Rates on Gold, Ornaments, Jewellery, Biscuits

GST Rates Update – 3rd June 2017 (03-06-2017)

GST Rates fixed on gold, diamond, footwear, others: GST rate fixed: Gold to be taxed at 3%, biscuits 18%, garments 12%

  • For gold, the GST has been set at 3 per cent introducing a new tax slab
  • Gold, gems, jewellery to be taxed at 3 per cent: Arun Jaitley
  • GST on all biscuits to be 18%: Arun Jaitley
  • जीएसटी के तहत गोल्ड पर 3% टैक्स लगाया जाएगा।
  • बिस्किट – अभी बिस्किट पर 12% से लेकर 20.5% टैक्स लगता है। जीएसटी के तहत सभी तरह के बिस्किट पर 18% टैक्स लगेगा।

For gold, the GST has been set at 3 per cent introducing a new tax slab, fairly in line with industry expectations that was appealing for 2 per cent. Last month, the GST Council finalised a four-tier structure for taxation of both goods and services at 5, 12, 18 and 28 per cent. According to sources, the proposal for gold was to put it in the 5 per cent slab.

Diamonds will also attract 3 per cent GST, while rough diamonds will have a tax levy of 0.25 per cent. Gems and jewellery have been put in the 3 per cent bracket as well.

Biscuits will attract a GST of 18 per cent. Currently, 20.6 per cent is weighted average for low-priced biscuits, the Finance Minister said.

GST Rate on Gold 2017 (Official Full List)

Chapter 71 (Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin)

1. All goods of Chapter 71 [other than rough diamond (7102)] will attract 3%.

  • 7101 Pearls, natural or cultured, whether or not worked or graded but not strung, mounted or set; Pearls, natural or cultured, temporarily strung for convenience of transport.
  • 7102 Diamonds, whether or not worked, but not mounted or set [other than rough diamonds].
  • 7103 Precious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi-precious stones, temporarily strung for convenience transport.
  • 7104 Synthetic or reconstructed precious or semi-precious stones, whether or not worked or graded but not strung, mounted or set; Ungraded synthetic or reconstructed precious stones, temporarily strung for convenience of transport.
  • 7105 Dust and powder of natural or synthetic precious or semi – precious stones.
  • 7106 Silver (including silver plated with gold or platinum), unwrought or in semi – manufactured forms, or in powder form.
  • 7107 Base metals clad with silver, not further worked than semi – manufactured.
  • 7108 Gold (including gold plated with platinum) unwrought or in semi – manufactured forms, or in powder form.
  • 7109 Base metals or silver, clad with gold, not further worked than semi – manufactured.
  • 7110 Platinum, unwrought or in semi – manufactured form, or in powder form.
  • 7111 Base metals, silver or gold, clad with platinum, not further worked than semi-manufactured. 7112 Waste and scrap of precious metals, of metal clad with precious metal.
  • 7113 Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal. 7114 Articles of goldsmiths’ or silversmiths’ wares and parts thereof, of precious metal or of metal clad with precious metal.
  • 7115 Other articles of precious metal or of metal clad with precious metal.
  • 7116 Articles of natural or cultured pearls, precious or semi-precious stones (natural, synthetic or re-constructed).
  • 7117 Imitation jewellery.
  • 7118 Coins.

2. Rough diamond [7102] will attract 0.25%

GST on Gold

They are seeking a special GST slab of 1.25 % for jewellery .At present, gold jewellery attracts 1% value added tax (VAT), 1% central excise duty and 10% customs duty in case the yellow metal is imported. “Gold jewellery is a high-value commodity and it should be taxed below two per cent in the GST regime,” said G V Sridhar, immediate past president of All-India Gems and Jewellery Trade Federation.

While the tax rates applicable to gold and other precious metals will go up under the new GST regime, experts believe that the bill’s actual impact on these sectors would be minimal. That’s because the bill is expected to usher in a new tax era where a lot of hidden taxes will be removed. Currently, there are separate laws governing separate tax levies such as central excise, service tax, VAT, CST. The GST proposes to end this. It will introduce a single law and subsume the other taxes a lot of which are hidden.

Gold, at present, attracts 12% tax, including 10% import duty. If gold is kept under the 5% bracket, then the total tax incidence on gold will be 15% (10% import duty + 5% GST).

There is a wide divergence between the Centre’s and states’ view on taxing gold. While the Centre wants duty to be lowered to check smuggling, states want it to be around 5% to earn additional revenue on the yellow metal.

The GST Council has so far fixed five rates for various goods and services at 12%, 18% and 28%. While the rates of 1,121 items were cleared in the last council meeting in Srinagar, there was no consensus on gold.

At present, the committee of goods and services tax officials is busy holding discussions with industry and other stakeholders on gold, along with other things. But informed sources said that the council may not favour a higher than 5% GST on gold

How will the implementation of GST Bill effect the Gold prices in India?

The tax structure under GST has not been decided yet. The government is working out the structure to relieve the pressure on the bullion industry due to increased tax burden post GST implementation.

Chief economic advisor Arvind Subramanian has recommended a standard GST rate of 2-6% tax on precious metals, which is above the 1% VAT applicable on them in most of the states.

While the lower rate of 1% VAT is a visible indirect tax on gold and other gems & jewellery items, there are other taxes that apply in this sector, which would get subsumed in the GST.

Even if the many taxes (like Excise, Customs etc) will be subsumed in the GST The tax burden on the sector will slightly increase. Although it won’t adversely affect the sector….

Experts here think that the proposed higher tax rate on precious metals actually incorporates many hidden taxes on them and brings many parts of the jewellery industry so far outside the tax net into the tax base. Despite the proposed higher tax rates, the actual impact on these sectors may be minimal due to the removal of a lot of hidden taxes and a smooth flow of tax credits, they say.

What is the impact of GST in gold prices?

Gold may become costlier for Indians if the government accepts chief economic advisor Arvind Subramanian’s suggestion to put the yellow metal in the 12% tax bracket under GST.

Its true nothing can be assumed before GST. But as per few studies it says after GST inflation will not increase rather development and GDP will grow. Different tax slab on goods and service are not ideal as per them. Everybody is waiting for stand on Gold. So just wait for some time.

The value of gold you get will decrease by the percentage of GST applied.

If GST is set at 5%, you will get gold whose reselling value will be 95% in the Indian market. For outside markets, the value will decrease more due to import duty set at 12%. Import duty is a one time tax and not the value of gold in India will always be actual cost of gold + import duty. However, you will have to pay GST every time you buy gold. VAT and Excise duty now costs 2.2% in Maharashtra. So you’ll be paying much more than you have been paying till now.

 

On our website we have provided all the details of GST Act 2017. We hope that our article will be helpful for you to understand the GST Act 2017.

 

Check Also:

Section 39 of GST – Furnishing of returns

Levy and Collection of CGST, SGST, IGST, UTGST – Complete Details

Comparative analysis of Valuation under GST vis-a-vis Excise laws

 

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