{"id":155,"date":"2020-01-30T06:07:17","date_gmt":"2020-01-30T00:37:17","guid":{"rendered":""},"modified":"2026-09-03T16:47:24","modified_gmt":"2026-09-03T16:47:24","slug":"impact-of-gst-on-jewellery","status":"publish","type":"post","link":"https:\/\/www.legalsalaah.com\/blog\/impact-of-gst-on-jewellery\/","title":{"rendered":"Impact of GST on jewellery"},"content":{"rendered":"<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">It is most likely for all of us to know that GST on gold as a good and <b>GST as jewellery<\/b> attracts 2 different kinds of rates.<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><b><i>1- GST as Gold: &#8211; 3%<\/i><\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><b><i>2- GST as jewellery: &#8211; 5% (making charges)<\/i><\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">So here we see that in terms of gold GST charges additional tax on services. Let us learn further about the impact of GST on gold rates<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b>#What is the impact of GST on gold?<\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><b>Before GST<\/b> the gold rates were:<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><i><b>\u20221%\u00a0 service tax<\/b><\/i><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><i><b>\u20221%\u00a0 VAT<\/b><\/i><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">Total of 2% charged upon 10% off import duty<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">But after GST, the taxes were increased by 3.5% finalizing to 3% of GST levied upon 10% of import duty. This caused the physical demand for gold to decrease. This had a huge impact on the gold market which resulted in a decrease in sales.<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b style=\"\">#Impact on gold making charges after GST<\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">Before the implementation of GST, the council decided to keep the making charges as 18% but after the implementation, they came to a final rate of 5%<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b style=\"\">#Impact on the organized sectors<\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">It is observed that approximately 30% of the gold traders are from the organized sectors. GST is believed to provide transparency and accountability but due to the increase in the tax rates, there might be possible chances that the organized sectors might shift into smuggling gold for cheaper rates without proper invoice hence moving to the unorganized\u00a0sector. This might result in a downfall in the economy<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b style=\"\">#Impact on the unorganized sector<\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">Approximately 700 to 800 tons of gold is imported to India every year and out of this a significant amount of gold is illegally sold to other countries without the specified amount of tax paid.\u00a0<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">After the increase in GST rates, the chances of smuggling have also increased and all this gold will come under the unorganized sector from which the taxes cannot be obtained.<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">Due to the hike in the taxes, the unorganized sector avoids getting <a href=\"https:\/\/www.legalsalaah.com\/gst-registration-online.html\"><b>GST Registration Online<\/b><\/a>.<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">Before the implementation of GST, the gold sector expected the import duty to decrease so as to decrease the unorganized smuggling of gold but unexpectedly the rates were increased.\u00a0<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b>#Impact on gold import<\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">It was observed that gold imported to India consisted of 25 tons of gold from South Korea in the month of July and August. This show that the gold traders are making the most advantage out of the new implementation which allows them to import gold from South Korea without paying a 10% of customs duty according to the free trade agreement with South Korea<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b><br \/><\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"5\" color=\"#330033\"><b>Conclusion:<\/b><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\">With an increase of tax rate in gold, there will be a noticeable hike in smuggling which will promote more black money contradicting the reason why GST was implemented in the first place. The current gold tax attracts an import duty of 10% with 3% GST and an additional 5% making charges.<\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" size=\"4\" color=\"#330033\"><br \/><\/font><\/div>\n<div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>After GST implementation, the taxes increased by 3.5% finalizing to 3% of GST&#8230;<\/p>\n","protected":false},"author":1,"featured_media":363,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Impact of GST on jewellery<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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