NITI Aayog suggests slashing import duty, GST rate on gold
NEW DELHI: Government think tank NITI Aayog has suggested the government to bring down import duty on gold from the existing level of 10% and also slash the GST rate on the precious metal from the current 3%.
It has also recommended the government to review and revamp the gold monetisation scheme and the sovereign gold bond scheme and introduce new gold savings account in banks besides setting up of a gold board and bullion exchanges across the country to have greater financialisation of the yellow metal.
In its latest report, the committee headed by NITI Aayog principal adviser Ratan P Watal said: “A reduction in the customs duty in the past in India has been argued to support tax compliance coupled with a significant reduction in the quantum of gold smuggled into India. In this context, to create a tax compliant system within the sector, it is important to reduce the basic customs duty on gold to as low as possible.”
The committee also suggested exemption of 3% Integrated Goods and Service Tax (IGST) to be paid by exporter on line with custom duty with a provision of bank guarantee. This IGST exemption should also be extended to the supply of gold by foreign buyer, it added.
Besides, the committee said there should be reduction of GST on gold from 3% to appropriate levels. Job workers receiving gold from other states may be considered for exemption from obtaining GST registration.
Further, it said the threshold for exemption under GST, which at present is ₹20 lakh, should be revised on the basis of valueadded, which can be determined by using average ratio of value added to value of sales for the sector concerned. Also, the GST rate for repair service of jewellery should be reduced from 18% to 3%.