Bullion dealers and jewellers have urged the government to subsume the gold import duty in the proposed goods and services tax (GST) and keep bullion in the lowest slab.
In a representation to the finance ministry, the India Bullion and Jewellers Association (Ibja) sought implementation of the Arvind Subramanian Committee report recommending the GST rate between 2 and 6 per cent on precious metals.
“We propose a basic customs duty of 9 per cent on gold to be subsumed with the GST rate. Thus, the effective GST rate on gold will be 11-15 per cent,” said Mukesh Mehta, national president of the Ibja.
India imports almost all its gold requirement of 850 tonnes a year, which generates revenue of around Rs 25,000 crore at a basic customs duty of 10 per cent. The duty has led to a rise in smuggling.
“The government must frame a favourable policy to curb smuggling. Subsuming the import duty on gold in the GST will be revenue neutral for the government,” said Surendra Mehta, secretary of the IBJA.
“The jewellery industry is gearing up for the GST and the proposed rate of four per cent will hamper its growth,” said Sreedhar GV, chairman of the All India Gems and Jewellery Trade Federation. The Federation has suggested the GST rate for the industry be kept at 1.25 per cent.
“We request the GST Council to recognise the issues faced by the industry as highlighted in a high-level committee report,” said Ashok Minawala, director of the GJF who was a member of the committee that made the report.