Jewellery industry welcomes 3% GST on gold but finds it challenging
The Dollar Business Bureau
Gems and Jewellery industry welcomed the government’s decision of fixing the goods and services tax (GST) rate at 3% for gold and 0.25% for rough diamonds, stating the step will help in boosting the business.
The industry said they are happy that the government understood the requirements of the industry and a special category has been created in the GST.
“We welcome the government's decision of 3% GST for gold and 0.25% on rough diamonds. We are happy that the Centre has created a special category, which will help the industry,” Nitin Khandelwal, Chairman All India Gems and Jewellery Trade Federation (GJF) told PTI.
He further said the rate is expected to be less than 3% as input tax credit has also been announced by the government.
However, there will be further clarity in this regard, when we meet Finance Minister Arun Jaitley next week, he added.
Sharing similar views, G V Sreedhar, former chairman GJF said that 3% GST rate will be a little challenging but it would be better for the gems and jewellery sector.
“The GST rate at 2% would have been an ideal. At 3% it will be challenging for the industry, but still it is better as the government has created a special category for us in the GST,” he said.
Sreedhar said that on rough diamonds the tax should have remained at 0% in spite of 0.25% as India is the world’s largest producer of polished diamonds.
The GST Council, in its meeting on May 3, decided to levy a GST at 3% on gold and 0.25% on rough diamonds.
Under GST, input tax credit can also be claimed for making gold jewellery.