GST: Advantage for Uttarakhand's bullion refineries

Bullion refineries in the excise-free zone of Uttarakhand will be in an advantageous position in comparison to those in other areas of the country (domestic tariff area) in the goods and services tax (GST) regime. 

The incidence of tax on them will be lower by 78 basis points in the GST regime. 

Rudrapur in Uttarakhand houses 17-18 refineries, which work on doré bullion, or unrefined imported gold. There are about 37 such refineries in the country, the rest of them are in the domestic tariff area. 

Currently, refineries in excise-free zones pay a countervailing duty (CVD) of 8.75 per cent and 0.2 per cent entry tax, making the total 8.95 per cent. Compared to that, the domestic tariff area refineries pay a CVD of 9.35 per cent. 

Now under the GST, which will be three per cent for both types of refineries, Uttarakhand-based bullion refineries will get 52 per cent of the central GST component, which is half of the three per cent GST, as refund. 

This means their net GST will be 2.22 per cent, while other refineries will pay three per cent.