INDIA May 26 2017 3:34 PM
MUMBAI (Scrap Register): The Goods and Services Tax Council, which will decide the GST rates, has discussed levying 16% GST rate on gold jewellery, cutting customs duty on gold to 2% from 10%, and levying 4% GST on gold bullion.
It is believed that if GST is implimented the gold jewellery buyer will have to pay around 6 percentage more by way of tax as at present the total tax comes to around 12.5%. And this move is also expected to decrease smuggling as cost to import gold will fall by 4 percentage points to 6percent to 4 percent GST and 2 percent customs duty.
Gold imports to India is currently billing at 12 percent, which includes 10 percent import duty, 1 percent each for vat and excise duty. With the introduction of this tax, vat and excise duty will be replaced by GST.
"A tax of [circa] 4% could be applied from the current 1-2% on precious metals, ultimately increasing the cost the consumer pays. As such, price-sensitive Indian gold demand may stagnate to 650-700 mt this year” as per Nell Agate, precious metals strategist CITI.