While GST benefits are still being debated across business communities, it’s a fact that the new tax regime is yet to make the desired impact. However, there is one industry which has been badly affected by the implementation of GST - the gold industry i.e. the business which depend on gold trading. Here’s a brief of the effects of GST on gold that you can read about:

  1. No significant growth in last two years

Ever since GST came into effect, no significant growth in the industry has been witnessed in the last two years. Ananth Padmanabhan, chairman of the Gem and Jewellery Domestic Council (GJC), while addressing a council said, "the yellow metal has lost its shine due to changing preferences of the younger generation as against the earlier ones who saw gold as the de-facto investment avenue to hedge against volatility."

  1. Decrease in demand

Secondly, the hike in tax collected on Gold from 2% to 3% has led to a downfall in the demand. The additional one percent made the metal more expensive for the end-customer.

  1. Import duty of 10% impacting the profits

The downfall of demand was further supplemented by the additional import duty of 10% that’s levied over and above 3%. Know How GST Hit the Gold Industry and What are Gold Policy Draft in Import Duties.

  1. 5% making charges further adding to the problem

To make matters worse, implementation of 5% making charges on gold post-GST has further hurt the industry. Earlier the GST council had proposed implementation of 18% making charges on gold jewellery and products.