The government has imposed GST on both gold manufacturing and services. When we buy gold ornaments, we have to pay both GST and making charge on gold. Gold is one of the few products that have different GST rates at different stages of life cycle from purchase to manufacturing. As a result, GST on gold refers to both the availability of gold and the making of gold jewellery. However, if a person sells old gold and uses the same money to buy new jewellery, he will not have to pay tax. Another way is that you can save in GST tax by buying new gold in exchange for old gold. Here we will explain you about the GST and other taxes levied on gold at different times.
Different rates applicable to gold Firstly, 10 percent custom duty is levied on imported gold. Then 3% GST is levied on the price of gold used in jewellery. Apart from this, making charges are 5%. This is in contrast to the rules before the GST system came into force, when there was no charge on gold jewellery. Earlier this fee was even higher. This was later reduced to 5 per cent.
VAT and Excise Duty The GST rate on gold is different from the GST rate on any precious / semi-precious stones used in gold jewellery. You should check that the charges are recorded separately in the bill. In the old system, when buying gold jewellery, you have to pay 1.2% VAT and 1% excise duty (service tax) in addition to the custom duty. Interestingly, there was no tax on making charges before GST came into force. However if you sell or trade your old gold for new jewellery, you will have to pay a 3% fee.
Tax on Gold (Before GST) If you bought 25 grams of gold for Rs 1 lakh. So under the pre-GST rule, it has a custom duty of Rs 10,000 (10 per cent), a service tax of Rs 1100 (1 per cent after adding custom duty), GST zero and 1.2 per cent VAT (after adding service tax) i.e. 1333 Rs. Also, a making charge of Rs 11000 would have to be paid. In this way you would have a gold of Rs 1 lakh to Rs 1,12,433.20.
Tax on gold in GST system If you buy 25 grams of gold for Rs. 1 lakh, then it will have 10% (Rs. 10000) custom duty, then 3% GST on the price including custom duty, 10% (Rs. 11000) making charge and 5% (550) making charge on GST. have to give. In this way, you will get gold of Rs 1 lakh to Rs 1,24,850.
