On Saturday, the 15th meeting of the GST Council is expected to finalise almost everything that has been left out, including rates for items such as precious metals, gold and bidi, among others. Here is a look at what GST could do to gold, a major investment vehicle for Indians:
How it will hurt
- Unorganised sector has been out of the indirect tax net so far
- Only around 2,000 jewellers registered for excise
- It constitutes 300,000 to 500,000 jewellers and artisans
- Employs a few million directly or indirectly, according to NSSO
- Rural demand for gold jewellery estimated at 200 tonnes
- Cash transactions are still prevalent and smuggling has not stopped
How it will help
- Organised sector will grow
- Investments in sovereign gold bonds could be beneficial, as it will not attract GST
- NSSO notes urban and rural areas spent 17% of the expenditure on durable goods and on purchase of gold and jewellery
What is required
- If NITI Aayog proposal of 5% GST on gold and 7% Customs duty is accepted, it will keep burden same
- Making charges of 18% payable to workers should be eligible for input credit
