The government of India introduced the concept of Goods and Service Tax on the 1st of July 2017. It was set as a replacement for various taxes, including the value-added tax, customs duty, and even the central excise duty. However, the government has proposed three new tax slabs under the Goods and Service Tax region.
Earlier the GST on gold got fixed at 3%. But with time, an additional 8% of tax was levied on the making charge. Later on, the tax was reduced to 5% because of the concerns raised by different groups. Once the service tax got levied on gold, people started experiencing fluctuations in the gold price. Analysts, however, thought that due to the fluctuation, the demand for gold would certainly decrease. But due to the unstable market condition, one can experience the problem of an additional tax burden on gold. Even if the overall price of gold increased, the yellow metal continued to attract a 10% of import duty with a 5% making charge and 3% GST. Demand for gold in the overseas market is increasing exorbitantly.
Due to this increase, the prices of gold after the Goods and Service Tax also increase steadily. The long-term outlook regarding the rate of gold in India after GST appears to be positive. However, the increase in smuggling because of the high cost associated is still a possibility. But on the other hand, the jewellery sectors are quite happy with the price of gold after the calculation of Goods and Service Tax. At the same time, they have few complaints about the rising cost of gold.
No comments yet