Skip to main content

GST may Make Gold Costlier

By

If gold attracts 12% tax under GST, total tax may work out to be 22% as import duty is 10%
Gold may become costlier for Indians if the government accepts chief economic advisor Arvind Subramanian's suggestion to put the yellow metal in the 12% tax bracket under GST. With an import duty of 10%, tax on gold may turn out to be 22%, which will reduce its consumption in the physical form in the second largest gold consuming nation in the world. At present, gold attracts an import duty of 10%. In addition, there is a VAT of 1% and an excise duty of 1%.“For a healthy development of trade, GST and import duty combined should not cross 12%; ideally, i t should be in the range of 10 - 12 % ,“ Shekhar Bhandari, business head for global transaction (banking and precious metals), Kotak Mahidnra Bank, told ET.
Late last year, there was agreement on five broad GST slabs -0 (the exempted category), 5%, 12%, 18%, and 28%. While retailers and jewellers want the government to peg GST at 1.25%, keeping the customs duty intact at 10%, manufacturers and bullion dealers want a 6% GST and an import duty of 6%. Surendra Mehta, national secretary, India Bullion & Jewellers Association, reckons that import duty should be at 6% and GST should be 6%.
“If the tax incidence remains high, then there's a propensity among people to evade tax. And that results in entry of gold through the illegal route which no government would like. Smuggled gold affects trade too,“ Mehta explained.
Gold demand in the country fell 21.2%  last year from the year before to 675.5 tonnes, according to a World Gold Council (WGC) report.
06TH APRIL,2017,THE ECONOMIC TIMES,NEW-DELHI

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more