A new gold GST rate of 3% is a result of the introduction of Goods and Services Tax. The new taxation rate also includes a 10% customs duty on any gold imported from a foreign country in gold bars, raw, or semi-finished condition.
Goods and services tax also levies a 5% tax on making charges of jewellery made from imported gold. It is an increase from the previous 2% (1% Service Tax and 1% VAT) tax on semi-finished or raw gold.
The implementation of GST rate on gold is poised to make a transparent system for billing and making of gold ornaments and should reduce the proliferation of unorganised gold market. India witnesses a significant amount of gold smuggled into her borders every year.
Almost 30 tonnes of gold of the total 800 tonnes consumed annually is imported via this country through unfair means. The new Goods and Services Tax in India bill is designed to carve the influx of smuggled gold.
It will introduce a fair billing system and ensure that a larger number of consumers purchase the product against a proper invoice. It will also introduce Input Tax Credit, a system which allows a business owner to claim tax benefits if they report their purchase and selling via proper means. Together, these rules are predicted to bring positive ways of how GST affects gold jewellery.