GST impact on gold and jewellery in 2019
GST on Gold and Jewellery has simplified the gold prices. Therefore, the trading of gold has also become very simple than before the GST era. Accordingly, it is important to get full information about the Goods & Services Tax on the gold Jewelry and ornaments.
Gold is indeed a very pricey commodity that decides the health of the economy. But India has been a country, where Gold is much more than a tradable & commercial commodity. Through the ages, gold has been particularly an important part of our lives. Moreover, it has been a relic of our ancestors and a symbol of prosperity. And…. why not? Once upon a time, India was popular over the world by the name of a golden bird. Even these days gold keeps on being the soft spot in the hearts of many Indian women. They usually buy the genuine Gold Jewelry from the jewellers having GST registration. They generally invest hours at the dealers of gemstones and Gold Jewelry. In order to ascertain the price of the ornaments, it is very important to know the basic rules of GST on Gold Jewellery.
Indians generally buy the gold adornments, Gold Jewelry & ornaments on auspicious occasions, for instance, Dhanteras, Deepawali or Akshaya Tritya. Moreover, they send presents of the gold adornments to their relatives & loved ones on family occasions, such as in weddings, baby shower, housewarming birthday, and the like.
1. What is the result of GST on the costing of the Gold Jewellery?
Typically the prominent jewellers and goldsmiths who are having the GST registration pursue rational business approach and suitable GST invoicing procedure. Hence they need to follow reasonable pricing as per the application of GST tax.
• However, after the commencement of the GST regime, the application of GST on Gold Jewelry has eased the pricing of the gold. As a result, this has turned out to be very simple than ever before.
• Accordingly, everyone must be aware in full detail regarding the influence of Goods and Services Tax on the prices of gold Jewelry and ornaments.
2. What were the gold prices before the beginning of GST law in India?
Before the initiation of the GST regime in India, the pricing of gold Jewelry and ornaments was very difficult to even for the traders. Long before the Goods and Services Tax was introduced in India, the price estimation on the gold and gold Jewelry and ornaments was too much extent, a great mess.
• Previously, a potential buyer of the gold piece or gold adornments had to incur VAT liability of 1.2%.
• Moreover, it was compulsory to pay excise duty @1% and likewise basic customs duty of 10%, which was imposed on the last price of gold & gold adornments.
• Above all this, numerous gold jewellers as well as the goldsmiths before having the GST registration had presumably indulged in black marketing or smuggling of the gold, as to gain more and more profit. This was only possible without a logical tax regime. Now after GST, this malpractice is not possible.
3. What are the GST rates on gold?
The overall rate of GST on gold, as decided by the GST authority is 3%.
• At present, if we see the Value Added Tax (VAT) and the Excise Duty have now been swapped by just 3% of GST tax. Besides this, a 10% rate of basic customs duty is still collected over & above.
• Post the beginning of GST regime, the gold has now turned out a little costlier, 0.75% more.
• Accordingly, the physical demand for gold ornaments has reduced a little bit because of the charge of 3% GST, next to 10% of customs duty.
4. What is the general consequence of GST regime on Gold Jewellery?
The overall impact of applying GST tax on the gold jewellery can be understood through a contextual analysis:-
• In this module, on the off chance that you need to purchase 100 grams of gold at a rate of INR 30000/10 grams, the all-out cost would be INR 3,00,000 or more INR 30,000 (10% duty of customs), INR 3,300) and INR 4,000 (1.2% of VAT) which turns out to be INR 3,37,300.
• In actuality, the estimation of 100 grams of gold under GST turns out to be INR 3,00,000 or more INR 30,000 (10% of customs) and INR 9,900 (3% of GST) bringing about a net estimation of INR 3,39,900.
5. Whether there are some profits of GST for the merchant of gold jewellery?
Yes indeed. There are plenty of advantages of GST on gold jewellery for the merchants having GST registration. Those benefits are listed below-
• The gold goldsmiths can profit the info tax credit on the gold gems.
• GST is helpful for the gold business, as this will make a move from disorderly the sorted out division.
• Aside from that, the free and little dealers will endeavour to amplify their benefit under the GST regime. Today a large number of the merchants of gold get their ornaments made from different goldsmiths. This attracts 5% of GST tax liability.
• This can enable them to begin an in-house generation.
• Besides, GST diminishes the expense of assembling and expanding income. So why wait? All businessmen must get GST registration now only.
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