The industry, however, needs clarity on standardised billing procedure for selling gold jewellery
Latest news : Jewellers across the country are happy with the three per cent rate fixed on gold jewellery under the Goods and Services Tax (GST). The Centre has definitely considered the demand of the gold industry while fixing the rates.
Currently, gold jewellers pay one per cent excise and 1.2 per cent value-added tax (VAT) over and above the 10 per cent customs duty on bullion. This effectively works out to 12.43 per cent. With the introduction of GST at three per cent for gold and 18 per cent for making charges, and keeping customs at 10 per cent, the effective rate comes to 15.67 per cent. So, the effective price escalation on gold jewellery comes to 3.24 percentage points. This is still a win-win for gold jewellers; they would not have expected anything better than this, particularly after the chief economic advisor’s report of Rs 10,800-crore subsidy on gold.
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.
At present, there is no service tax on making charge of jewellery. The GST council has not announced a similar GST rate of three per cent on making charges of jewellery. So, GST rate on making charges of jewellery falls within the 18 per cent tax bracket. Assuming a customer typically pays 12 per cent of the gold value as making charges, gold jewellery could become costlier.