Gold Rates

The GST Council has fixed Gold rates under GST at 3%. The tax rate is lower than the lowest slab of 5% and is closer to the current tax of about 2%. The government has definitely kept in mind the demand of the gold industry.

“There was extensive debate on Gold rates under GST was between 2% and 5%, there was almost a vertical division. A consensus has reached at 3%,” Mr. Arun Jaitley said.

Points to ponder on:

  • The chief economic advisor reports a subsidy on gold of Rs 10,800-crore
  • The government will recover an additional Rs 6,000 crore from this industry
  • Subsidy on gold would hence come down, considering an annual consumption of 700 tonnes
  • Customs duty is still present on gold under GST norms

NOTE: The GST council has not announced a similar GST rate of 3% on making charges of jewellery. So, GST rate on making charges of jewellery falls within the 5% tax bracket.

Comparison of Gold rates:

gold rates under GST

GOLD RATES FOR MAKING JEWELLERY

 For example,

GOLD RATES UNDER GST

*NOTE:

  • Assuming gold price remains unchanged
  • Price of gold taken on 6th June’2017 (all over India)
  • Making Charges = 12% of (gold price+ custom duty)
  • The industry also needs clarity on standardized billing procedures in the country for selling gold jewellery, as some jewellers show making charges separately, while others include them in the price.
  • The international norms says, “That making charges, wastage, and stones, among other things, must be shown separately in the sales invoice at the time of selling gold jewellery”.
  • It is important to understand that most jewellers do not have their own manufacturing unit, so they would be paying 5% GST to workers making jewellery and collecting only 3% from the customer.

Conclusion

However, the industry has welcomed the government’s decision and is hoping this will not affect their business. Jewellers across the country are happy with the 3% tax rates on gold jewellery GST. It is a great relief for the gold sector that GST on making charges is just 5%.

To get a detailed view on other rate changes, click here.

In case you are confused about GST as a business owner, feel free to consult the GST experts at LegalRaasta. You can get comprehensive assistance on GST Registration and GST Return Filing. You can also use our GST software for doing end-to-end GST compliance.