The Rate of Good and Service Tax (GST) on Gold is 18%. Schedule of GST on Gold in India have been provided as category list. The Rates of GST on Gold (Ornaments and Jewellery) in India was approved by the GST Council last week. You should understand that, these rates on GST on Gold will be changed every year based on the feedback from the suppliers and the representatives of the State Governments of India. Gold is one of the most awaited good on the GST list that many traders across the country are waiting for since long time. Any change in GST Gold Rates will have direct impact on the trading markets.
GST on Gold (Rates and Other Details):
- The Rate of GST on Gold has not yet been finalized
- The expected rate is 12%
- GST on Gold Jewellery will have two side effect
- Current Excise Duty on Gold is 1%
- Current VAT on Gold is 1.25%
GST on Gold:
Uder GST, Gold ornaments would be subject to 18% tax, which the jeweller can adjust with input credit. This 18% tax has to be borne by the end customers. Therefore, the final prize of the Jewellery increases.
If the customer returns the jewellery to the seller, the 18% tax paid at the time of purchase can not be regained. In other words, the value of the jewellery will reduce by 18% GST paid at the time of purchase.
The tax structure under GST on Gold has not been decided yet. The government is working out the structure to relieve the pressure on the Gold bullion industry due to increased tax burden post GST implementation.
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 Jewellery industry has been suffering from constant changes and uncertainty in tax policy. It is a wide-spread feeling among the jewellery fraternity that the Indian Government needs to work towards a more uniform and consistent taxation policy under the Goods & Service Tax (GST) regime for the Industry.
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