Merchants moot 1.25% tax for gold under GST

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The Kerala jewellers’ association coordination committee has urged the state government to demand the GST (Goods and Service Taxes) council to fix the tax for gold at 1.25% when new GST regime is ushered in.

The committee office-bearers, who met finance minister T M Thomas Isaac to submit a pre-budget memorandum, also demanded withdrawal of ‘unjustifiable’ purchase tax imposed upon the gold merchants in the state.

“Legislative members and political parties had also raised the demand to which the finance minister assured that the purchase tax will be withdrawn during the forthcoming assembly session,” the jewellers association pointed out.

Besides the demand for fixing the tax on gold at 1.25% under the GST regime, the coordination committee also called for incorporating compound tax concessions for gold merchants in the budget and the following finance bill as GST is getting delayed.

“If the GST is implemented from a particular date during the next fiscal, it’s possible for the commercial tax officials to interpret that the merchants are legally obliged to pay compound tax for the whole year,” the memorandum said.

Meanwhile, the All India Gems and Jewellery Trade Federation also submitted its GST representation to state government proposing a GST rate of 1.25% for gems and jewellery sector.

“A large part of the sector may not be able to adhere to the compliance, which will result in legal complications with government department. It is recommended that one standard HSN (harmonised system nomenclature) code should be maintained for the industry,” the submission said.

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