GST on Gold, GST Rate on Gold Ornaments and Jewellery
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 Recommended Articles –
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