Mumbai: The World Gold Council (WGC) is of the opinion that India's simplified taxation structure, the Goods & Services Tax (GST) by the Government of India, will make the gold supply chain more transparent and efficient and also boost India’s economy which in turn will support gold demand.
At 3%, the GST rate announced on the 3rdJune was lower than the industry had feared. Industry reaction has been positive. There are two important GST rates which will affect the gold industry: the 3% tax on gold products – which replaces the excise duty and VAT components, but sits on top of the import duty – and an 18% tax on services, which will affect small-scale artisans who design and manufacture jewellery for larger manufacturers, says WGC.
According to the WGC, while the overall tax rate consumers face is likely to increase slightly, GST will bring benefits too. Firms will be able to offset the GST they pay against their revenues, and double taxation throughout the supply chain will be eliminated. Supply chains will become more efficient.