Jewellers hail revision of GST rule for gold savings schemes

gst gold jewellery traders slab rate

KOLKATA: Jewellers have hailed the GST Council’s decision to allow customers to pay 3% goods and services tax (GST) on monthly gold savings deposit schemes only when they redeem their investments instead of paying the levy on each instalment.

The chairman of the All India Gems & Jewellery Trade Federation, Nitin Khandelwal, told ET that jewellers were finding it difficult to convince their customers in small towns and villages in particular that the advance amount paid by them was subject to 3% GST.

“We had made representations to the government on this issue. The GST Council has now said that 3% GST will be charged when the invoice is raised against purchase of gold,” Khandelwal said.

Under the gold savings schemes, the jeweller collects monthly instalments from customers for 11 months. The 12th month instalment is paid by the jeweller and the accumulated amount can be redeemed against gold jewellery by the customer. As per the GST law, these 11 monthly instalments were considered receipt of advance on which GST was liable to be paid.

Chartered accountant Bhavin Mehta from Dee Cee Associates, a GST expert on gems and jewellery industry, said that in the last GST Council meeting held on October 6, the government had announced a relief only for registered persons who had turnover of Rs 1.5 crore in the preceding financial year.

“Now, the same has been extended to all class of registered persons (other than composition dealers) irrespective of the turnover limit,” Mehta said.

“It was an added compliance for the jewellers who had to issue a receipt voucher every time they collected an advance from the customer. Further, the details of advances received and adjusted had to be reported in the GST returns,” he said. The government has now aligned the GST law with the pre-GST era, where service tax was payable on advance received for services to be rendered, Mehta said. There was no value-added tax or excise levied earlier on the advance received against goods to be supplied.

Source: https://economictimes.indiatimes.com/news/economy/policy/jewellers-hail-revision-of-gst-rule-for-gold-savings-schemes/articleshow/61731381.cms

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