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GST on Gold Jewellery Old and New

Written By:-cs vipul arora

After the implementation of GST in India, there was a large scale impact on the price of goods and services. With the introduction of a new taxation regime, the price of gold was also affected. This impact of GST on gold was felt on different levels such as gold value, import of gold and jewellery making. Though it was believed that the introduction of GST in gold with bringing transparency and accountability in the gold sector, on the contrary, the gold vendors are shifting to the illegal transportation of raw gold due to an increase in gold rates.

Gold Rates After GST in India

With the help of the below illustration. you can clearly understand the impact of GST on gold. Consider the price of 24k gold is Rs. 40,000 and the import duty is charged at the rate of 10%. The making charges of gold is Rs. 5000, the price of gold before as well as after GST are as follows:

Tax on Gold	Before GST	After GST
10gm Gold Price	Rs. 40,000	Rs.40,000
Customs Duty at the rate of 10%	Rs.4,000	Rs. 4,000
Service Tax +VAT at the rate of 2%	Rs.880	NIL
GST on Gold@3%	NIL	1320
Total Value of Gold	44,880	45,320
Making Charges 12% of gold price and custom duty	5280	5280
GST on Making charges @ 5%	NIL	264
Total Price of Jewelry	50,160	50,864

Rate of GST on Gold Value

Above the price of gold, a tax of 3% was charged on gold and gold-related jewellery.
This cost is then passed to the final consumers.
Before the GST a service tax of 1% and VAT of 1% was charged on the price of gold.

GST on Gold Jewellery

Raw Gold in India is imported from other countries.
Currently. the consumer bears 3% GST on gold value and 5% GST on the making charges.

Exemption of GST on Gold

The Government of India issued a list of public and private sector banks that were exempted from paying the GST on gold import in India.

Primary Factors to Check While Purchasing Gold in India

Check the Gold Purity: This is the most important factor while buying gold is to check its purity. The Bureau of Standards has suggested that the jewellery must have a hallmark attached to it. You can also look for the letter K with the jewelry number.
Cross Check the Gold Price: The jewellery cost is based on the weight as well as purity of gold. For example, the price of 18-carat gold will be less than 22 carat gold of the same weight due to its purity.
GST on Gold In India: The rate of stones is different from the GST rate on gold. These things must be separately mentioned in the bill.

Conclusion

If the gold has been imported from outside the vendors must pay a customs duty of 10%. In addition, 3% of GST is usually charged on gold prices. If the gold has been used to make ornaments 5% of the GST is charged on the making charge of the gold. A registered jeweller can claim ITC of 2% on the making charges of the ornament.

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