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Is it likely that gold prices will be up because of GST?
Posted on: 06/Apr/2017 5:15:17 PM
The procedure of GST (Goods and Services Tax) is set to be introduced throughout the country from 1st June. It is expected that this may lead to an increase in the price of gold.
The slabs of taxes were set at 5,12, 18, and 28 percent as decided last year. Currently, gold has 10 percent Import Tax, 1 percent VAT, and 1 percent Kalal Tax.
The Chief Economic Adviser of the central government has recommended that gold should be brought under the GST slab of 12 percent. It should not exceed 12 percent. If any industry is to flourish, the combined tax of GST and Import Tax should not exceed 12 percent.
A higher official of Kotak Mahindra Bank informed that the current Import Tax on gold already stands at 10 percent. If 12 percent GST is added, then the total tax would become 22 percent.
The national secretary of the Indian Gold Jewellery Shops Association also explained that there is already an import tax of 10 percent. So, it would be proper if the GST on gold is fixed at 1.25 percent. Otherwise, the taxing system on gold may be revised as GST 6 percent and Import Tax 6 percent.
If a GST of 12 percent is imposed on gold in spite of all above recommendations from experts, it is very likely that the price of gold will go up while sales will get affected.
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