GST on Gold: Impact of Goods and Services Tax on Gold & Gold Jewellery 2024

Gold, the timeless treasure, holds a special place in Indian hearts. Whether adorning our bodies or securing our future, it's deeply intertwined with our culture and finances. But understanding its intricacies, especially with the Goods and Services Tax (GST) in play, can be confusing. Worry not, for this blog dives deep into the world of gold GST rate in India, making things sparkling clear!

What is Goods and Service Tax (GST) in India?

Goods and Service Tax or GST is a type of indirect tax that has replaced various types of indirect taxes such as VAT, service tax and more. This tax was imposed on the supply of goods and services in the country.

There are 3 types of Goods and Service Tax or GST.

Types of Goods and Service Tax (GST)

• CGST: CGST stands for Central Goods and Service Tax. The Government levies this on inter-state transactions of goods and services.
• SGST: SGST stands for State Goods and Service Tax. The Government levies this on intra-state transactions of goods and services.
• IGST:  IGST stands for Integrated Goods and Service Tax. This type of tax is levied on the import and export as well as inter-state transportation of goods and services that are shared by both the centre and the state.

There are various benefits of levying Goods and Service Tax such as curbing tax evasion, etc. Let us briefly understand the benefits of Goods and Service Tax or GST in India.

Advantages of Goods and Service Tax (GST)

• Comprehensive and Well-Structured Tax System: The implementation of Goods and Service Tax has brought various types of indirect taxes, such as VAT, service tax, etc., under one roof. With this, the taxation system has been simplified, making it much more comprehensive and consolidated.
• Uniformity in Taxation: Goods and Service Tax or GST has brought uniformity in taxation. As a result, it becomes easier and seamless for small business owners who have to file Tax Returns as sometimes, they do not have the accessibility to hire tax professionals to help them pay taxes.
• GST Reduced Corruption: With the implementation of Goods and Service Tax (GST), corruption in the country has seen a downfall.
• Increase in GDP: The implementation of Goods and Service Tax (GST) has helped increase the GDP of the country. Moreover, because of this, the country's GDP is expected to rise in the coming years.
• Beneficial for People Who Want to Start Their Own Business: The implementation of Goods and Service Tax or GST is beneficial for all those who want to start a business of their own. As GST has made taxation well-constructed and consolidated, people do not have to worry about taxes in different states.
• Attracted Foreign Investment in India: Did you know that the implementation of Goods and Service Tax or GST has opened the doors to foreign investments? This is because GST has now made the taxation process in India unified and simple, making it seamless and hassle-free for foreign investors to invest in India.

The implementation of Goods and Service Tax or GST has impacted the prices of various goods and services such as gold. The Government has now implied 3% GST on Gold. Are you planning to buy or invest in gold in India? Before you head out to buy or invest, knowing all about Goods and Service Tax or GST on gold is imperative. This will ensure that you do not face any hassle or inconvenience in future and can continue buying gold seamlessly.

Let us now understand all about GST on gold briefly and conclusively.

An Ultimate Guide on Goods and Service Tax or GST on Gold

• GST on Gold Rate: Before implementing GST on gold, the customer had to pay a total of 2% of tax, including VAT and service tax. However, after the implementation of GST, the taxes have now shifted up to 3% in total.
• GST on Jewellery: If you are getting your old jewellery set repaired, you have to pay a total of 5% of taxes after the implementation of GST on gold. Before the implementation of GST on buying jewellery in India, the total tax to be paid by the customer was 18%. As a result, people have seen a sign of relief as the tax percentage has now been reduced from 18% t0 5%.
• GST on Gold sale: After implementing a Goods and Service Tax or GST on gold, you do not have to pay taxes to the Government if you plan to sell your gold and buy gold from that money. However, before Goods and Service Tax or GST was implemented, an individual had to pay 3% of taxes to the Government if they were selling off their old gold and buying new gold with the same money.
• GST on Import of Gold: After the implementation of the Goods and Service Tax or GST on Gold, the import duty on gold is now 10%. As a result, the total cost of buying imported gold has seen a rise.

Gold and GST: A Shining Partnership

While GST adds another layer, understanding it empowers you to make informed decisions. Remember, the 3% GST rate on gold purchase is lower than the pre-GST tax burden, potentially making gold a more attractive investment. So, with newfound knowledge, go forth and explore the world of gold, making informed choices that glitter!

Additional Tips:

• Compare prices across jewellers to account for variations in making charges and potential discounts.
• Choose BIS-hallmarked gold for purity and authenticity.
• Stay updated on any changes in GST rules or gold import duties.

With this comprehensive guide, you're now equipped to navigate the world of gold and GST with confidence. Happy investing