IBJA may suggest abolition of import duty on gold, application of standard rate of GST on jewellery.

MUMBAI: Leading trade body India Bullion & Jewellers Association (IBJA) may suggest to the government to abolish import duty on gold and instead apply the standard rate of goods and services tax (GST) that gets notified, on bars and jewellery.

Bullion attracts import duty of 10% and most of the 29 states levy VAT at the rate of 1%, including cesses, stamp duty, etc works out to 11.4-11.5%. States like Maharashtra levy VAT at 1.2% and Kerala at 5%. Jewellery manufacturing attracts 1% excise duty. If GST is imposed in addition to customs duty and assuming the rate is capped at 18%, a customer would end up paying 28% on jewellery, including the 10% customs duty. This would be unviable and push the trade underground, bullion market sources said.

Gold Should be under GST

Excluding gold from GST is a bad idea. The Arvind Subramanian panel rightly recommended levying 4-6% GST on gold which is an idle asset. Tt is inconsistent for the government to actively promote schemes such as gold bonds and gold monetisation to wean consumers away from gold, on the one hand, and also give highly concessional tax rates to buy gold, on the other. Bullion traders should see reason.

Source : economictimes.indiatimes.com