New Delhi: The GST (Goods and Services Tax) Council of India on Saturday fixed the goods and services tax on commodities like gold, footwear, biscuits and textile. GST on most goods were finalised last month.
For gold, the GST has been set at 3 per cent introducing a new tax slab, fairly in line with industry expectations that was appealing for 2 per cent. Last month, the GST Council finalised a four-tier structure for taxation of both goods and services at 5, 12, 18 and 28 per cent. According to sources, the proposal for gold was to put it in the 5 per cent slab.
Diamonds will also attract 3% GST, while rough diamonds will have a tax levy of 0.25 per cent. Gems and jewellery have been put in the 3 per cent bracket as well.
Earlier, most states demanded a 5% GST on gold, silver and diamond in the GST Council meet but this did not find favour with ornament making hubs such as Maharashtra, Gujarat and Tamil Nadu, leading to the rate fitment for this class being deferred to June 3.
All India Gems and Jewellery Trade Federation (GJF), the national body of the gems and jewellery industry, had proposed GST rate of 1.25% for the sector.
In its representation to the government, the federation has said that a rate exceeding this level would hurt the industry as well as consumers and workers.
Mr. Ashok Minawala, past chairman and high-level committee member, GJF, said, “Keeping in mind the unique characteristics of the gems & jewellery sector, the karigars and small jewellers were kept out of the purview of excise duty. Therefore, while we welcome GST, we request the GST Council to kindly recognise the practical issues faced by the sector and levy not more than 1.25% GST on gems & jewellery.”
