Gold jewellers in a fix as confusion over GST levy continues

As the rollout deadline nears for a national goods and services tax (GST), there is ambiguity on its applicability to gold jewellery.  A section of jewellers considers making charges as a service charge and shows this separately while billing. If a service, the applicable rate would be 18 per cent, by the draft GST guidelines.Another section of jewellers, however, adds making charges in value of the jewellery; they do not show it separately but add it to the price of gold. In this case, the applicable rate under GST would be two per cent (assumed, as the government is yet to formally state the rate for jewellery) on the cumulative value of the precious ornaments, if the government continues with the uniform rate on gold and jewellery. Financial Astrology Tips

“By the international standard, bills must be made showing making charges separately. We have urged the government to levy the same rate on gold and jewellery (including on making charges) under GST,” said Surendra Mehta, secretary, India Bullion and Jewellers Association. In the base case scenario, considering gold at Rs 30,000 for 10 gm and a making charge of Rs 4,000, a consumer needs to pay Rs 34,000 for 10g of jewellery. If a two per cent GST is applicable on the entire value of gold, the payable duty would be Rs 680 for the jewellery. If the two per cent GST is made applicable on gold (Rs 30,000 per 10gm) and an 18 per cent GST on making charges, the total duty component would be Rs 1,320 per 10 gm (Rs 600 on gold and Rs 720 on making charge). Thus, a consumer would have to pay Rs 640 extra if the making charge is separated from the value of gold. “In case the government seeks recovery of Rs 640 per 10g, calculated by charging 18 per cent on making charges after a certain period, jewellers would face a big burden of Rs 5,200 crore,” said a senior industry official.  Astrology and Numerology Trading Tips