ALSO READGST rates fixed: 3% tax on gold, 5% on clothes costing less than Rs 1,000 Bad news for bullion: High GST rate could take much sheen off gold demand GST: 5% for gold, 12-18% for biscuits; no exemption for handicrafts likely GST on gold deferred as consuming and producing states spar over rates Gold jewellers in a fix as confusion over GST levy continues
Besides, since the government will recover an additional Rs 6,000 crore from this industry, subsidy on gold would come down, considering an annual consumption of 700 tonnes.
|Now||After GST rollout|
|A.||Price of gold (100 gm 995, in Rs)||263636||263636|
|B.||Customs duty (10%)||26364||26364|
|J.||Making charges (12% of gold price + customs)||34800||34800|
|L.||GST on making charges (18%)||0||6264|
Total price of jewellery (K+L)
Total taxes and duties (B+D+F+H+L)
Taxes and duties as & of gold value
|3.24 percentage points|
The industry also needs clarity on standardised billing procedures in the country for selling gold jewellery, as some jewellers show making charges separately, while others include them in the price of gold. The international norms say that making charges, wastages, 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 18 per cent GST to workers making jewellery and collecting only three per cent from the customer. Thus, a jeweller needs to factor in the differential tax on making charge in the price of jewellery.
The author is the national secretary of the India Bullion And Jewellers Association Ltd