To maintain viability of the gold bond scheme, the Finance Ministry as reported in one is Business dailies is considering a GST rate of 3% on gold and is not interested to lower down import duty on gold anytime soon. The industry however sought 4% cut in the import duty on gold. Nonetheless, the final say to fix GST on gold lies in the hands of the PMO.
With no clarity in respect of the applicable GST rates on gold jewellery, jewelers had long been in a fix. Some gold jewelers consider making charges as a service and hence show them separately while billing. So as under the draft GST guideline, a rate of 18% is applicable. Some other jewelers account for making charges in the total value of gold, so as under GST the rate of 2% applies.
GST set to be rolled out in July this year aims to curb the compounding effect such that the final tax rate on goods shall fall under either of the 4 tax rate categories; 5%,12%, 18% and 28%. In a report, a Commerce Ministry official is quoted saying "We are mulling a new comprehensive gold policy to bring domestic and foreign gold trade rules under one roof."