Goods and Services Tax – GST on Gold
The price of gold following the adoption of the Goods and Services Tax (GST) regime has seen some fluctuations. Analysts were apprehensive that the tax would lead to a decline in demand for gold due to the high incidence of taxation. The GST on gold was fixed at 3%, with an additional 8% tax levied on making charges. The tax on the making charge was then reduced to 5% due to concerns raised by various groups.
GST on Gold Purchase
The tax slabs were announced on June 3rd, 2017 and gold will be taxed at a rate of 3%. In other words, all gold and gold-related jewelry would be taxed at a flat rate of 3%, which would be borne by the end consumer.
GST on Gold Making
In addition to this, the government has also levied a 5% tax on making charges. At present, there is no tax on making charges, which account for close to 12% of the actual cost of the gold.
The tax on making charges was initially fixed at 18%, but appeals from Indian jewelry councils and bodies to reduce the rate resulted in the government fixing it at the present 5%.
