GST is considered as one of the biggest taxation reforms that have been announced on first of July to enhance our Indian economy. It is expected that it will lower down the smuggling, corruption and bring the blocked money back in rotation. GST Bill in India have brought many changes in terms of taxation rates including daily needs, branded cosmetics and clothes, airfares, automobiles, jewelry and so on. So, if you anyhow plan to buy gold jewelry after the GST has been implemented, you need to know the current GST rates on gold jewelry in order to make an informed decision. Half of the population is confused regarding the rates of gold proposed by the GST Council. Due to lack of understanding and knowledge about the GST rates on various items, there is a lot of confusion all around the States. Therefore, to clarify your doubts and confusion about the current GST rates, demand and trade on Gold jewelry, we’ve collected all the data and information which is discussed in this blog post. Let’s take a look.
GST Rates on Gold Jewelry
Gold is an ornament used for various purposes. People use it for themselves and also for gifting purposes on marriages or anniversaries. If you are planning to buy gold, you must know the difference between the current and previous rates of gold. Previously the tax that consumers used to pay on gold shopping was ten percent of the custom duty, one percent excise and 1.2 percent VAT which in total is 12.43 percent and on buying gold bars the tax rate goes somewhere around 11.32 percent. However, after the implementation of GST, the tax rate for gold has been increased a bit up to 15 percent in which the taxes such as VAT and custom duty have been subsumed. There is a difference of three percent in gold rates when compared from previous taxation system. It is, therefore, concluded that gold is going to be expensive for customers.
GST Impact on Gold Import
The change in the tax rates of gold have a significant amount of impact on the demand of gold and its import. Before the implementation of GST, most of the jewelers have already stocked up the gold as an evident form the import data and therefore, it will be difficult to assess the impact of increasing gold rates on demand and import of gold approximately five to six months after GST. That’s the reason the imports of gold will lower down as it is front-loaded in the first half of the year
GST Impact on Gold Trade
It is expected that organized and branded gold traders will be benefited with the gold rates introduced after GST. It is because they’ll find it easier to comply and implement new provisions.
If we talk from the retail front, half of the organized sector of jewelry will find it difficult to comply the new rules. The organized jewelers with integrated manufacturing will have to pay eighteen percent of the GSTs on making charges due to which most jewelers can avert. Initially, there will be teething troubles that every retailer would be facing, however, with time everything will come back in place. Consumers will be used to the biggest taxation reform that have entirely changes the taxation system.
The Final Word
GST is one of the wise decision taken by the Government of India which is thought to help in the growth of the country as well as contribute to enhance its economy. Over a certain period of time, businesses, consumers and the traders will become used to it. That said, change is for better, people need to understand that GSTs will reduce the corruption and bring the black money back into rotation which will indirectly contribute to the country’s economy. GST has removed the complexity of multiple taxes and has given various opportunities to small businesses to grow more and maintain their competitive edge in the market. While there are still concerns related to GSTs in certain areas and states due to unclear information and lack of understanding of the new GST Bill India, the initial tough phase is going to impact the industry to a larger extent. It is, therefore, mandatory to apply for GST registration in order to avail the benefits of the new taxation regime.