On July 1, 2017, one of the much-awaited tax reforms in India happened that gives a huge impact on gold and jewellery shop billings in India.
A rate of 3 per cent tax was fixed after a lot of debate on the issue of tax reform in the gold price mixed, reactions are coming out after this big reform some are happy because they think that at least it is much lower than what was feared initially while some thinks that in comparison of VAT, GST tax rate on gold and jewellery is to some extent higher.
At the time of VAT Jewellers used to pay 10 per cent customs duty on gold and 1 per cent excise plus 1.2 per cent VAT over and above that. When all these taxes summed that is 12.43 per cent when buying jewellery and 11.32 per cent when buying bars as there is no excise duty on bars.
18 per cent for making charges and 3 per cent for gold by the implementation of GST When compared, the effective price increase on gold jewellery comes to 3.24 per cent and the gold bars will be dearer by 1.98 per cent.
By this, it is clear that gold is a little more expensive for Indian customers. But there still same value for gold, maybe there is a negative impact of GST on gold but it is still a favourite asset for Indians.