GST Council met for one of the last meetings before the implementation of GST and decided on a few very crucial points. In one such move, the council has agreed to reduce the indirect taxes on making of gold jewellery. Earlier, it was decided that gold jewellery making would attract 18% indirect tax, however, to make it more convenient for buyers and to make the process transparent, GST council has decided to bring the rate down to 5%.
The experts and gold merchants have termed the move as a good initiative as this step would reduce the burden on the buying individual. Currently, there is no such tax on the making charges of any kind of jewellery in the country.
The new taxes, which come in action from July 1st, will see a different approach altogether. In an earlier GST council meeting, the committee had decided to tax the gold and other precious jewellery at 3%. Along with that, the tax on making charges was decided to be 18%.
If the previously decided rate of tax was implemented, the customers would have to pay 4% of the total value of gold as taxes. Currently, before the GST implementation, customers have to pay 2% of the tax, which consists of 1% VAT and 1% excise on all the jewellery. Under the new tax rate, the overall tax rate would get reduced by a significant margin.
Gem and Jewellery Federation of India, along with many other bodies related to jewellery and trading, welcomed this move and added that it will result in better transparency.