GST effect: Jewellery stocks rise up to 18% as govt fixes 3% rate on gold

Jewellery stocks such as PC Jeweller, Gitanjali Gems and Titan Company surged 8 to 15 per cent, after the GST (Goods and Services Tax) Council finalised the tax rate to be levied on gold at 3 per cent.

At 1320 hours, the PC Jeweller stock was trading 11 percent or 55 points on the BSE.

While Gitanjali Gems rose 5 percent, Titan Company was trading 17.16 percent or 81 points higher at Rs 553.80 on the BSE.

Gold, silver and processed diamonds would be taxed at 3 percent under the GST as against the lowest tax bracket of 5% proposed earlier, FM Jaitley anounced on June 3. Apart from this new tax rate, rough diamonds would be taxed at 0.25%.

Footwear costing below Rs 500 will be taxed at 5 per cent while that above Rs 500 will attract 18 per cent levy. Currently, footwear priced from Rs 500-1,000 attracts 6 per cent excise duty. Besides, states also levy VAT.

Sources said items like readymade garments are likely to be taxed at 12 per cent, while cotton textiles and cotton yarn will be in the 5 per cent category.

The GST Council has already fitted over 1,200 goods and 500 services in the tax bracket of 5, 12, 18 and 28 per cent last month.

GST, to be rolled out from July 1, will unify 16 different taxes and make India a single market.