How Does GST Impact On Gold Industry in India?

Gold is the most favorite and trustworthy savings commodity for the Indian people. It is also a status symbol in many of the parts in our country, the more amount of gold you possess, the more stature you have in the society. It has always been like this from the hundreds of years as we all know that our country used to be known as The Golden Bird because of the amount of gold we have back then. We have brought the act of buying gold on certain days as our holy custom. India’s gold industry is considered to have more than 300,000 jewelers, which consists mostly of small, family-run businesses. Gold is also considered to be a safe investment option in our country.

When the GST arrived on the 1 July of 2017, by the government of India to overhaul the complicated tax structure of India, it made a huge impact on various categories. But GST Impact on Gold Industry was a noticeable one as it eliminated the various kind of taxes like Excise duty and VAT (Value Added Taxes) on it by implementing the GST on it. Let’s have a closer look at the GST Impact on Gold which the industry has noticed. 

Highlights of the GST Impact on Gold Industry:

Before July 1, 2017, when GST was not implemented on the Gold products, it was a bit cheaper to buy gold products. But since the GST rates have come into the practice, now it is a bit costlier for the gold lovers, especially Indian women to buy jewelry. The  GST Impact on Gold which we’ve seen by the new GST rates can be summed up into the following points.

• Before GST, there used to be a total of 2% tax imposed on the Gold which mainly consists of 1% Excise Duty and the 1% of the VAT (Value-added Taxes). 
• Post GST, now there’s a tax of 3% on the gold products which is applicable on the Silver as well. 
• The 1% rise in the tax is completely set to pass on the customers which will make the resale value fall by a bit than it used to be. It is one of the immediate aspects of GST Impact on the Gold Industry. 
• Before GST, the total tax on Gold jewelry was 12.2% which consisted of 10% customs duty, 1% Excise Duty, and 1.2% VAT. After GST, it will stand at around 14% which makes a bit costlier for the customers.
• Now, there will be 5% GST on the making charges as well. The making charges consist of 12% of the Price of Gold and custom duty. 
• After the GST, there will no PAN Card needed for buying the jewellery more than Rs 50,000. This comes as a huge relief to the jewellers having a turnover of Rs 2 crores and more.

How can be the GST Impact on Gold acts a benefit to the jewellers?

The GST has impacted the gold industry, jewellers, and the customers in a positive way which we will surely see in the coming days. There are many benefits of GST Impact on the Gold industry mentioned below.

• The gold industry is highly unorganized and GST will surely help in fixing it and to become an organized industry which will results in result in better functioning of it.
• Through GST, the gold jewellers can avail the input tax credit on the gold jewellery.
• Because of the 5% GST on the making charges of GST, it will motivate the independent and small firms to maximize their profit by opting the in-house production.