Ker­ala, Bi­har De­mand Higher GST on Jew­ellery

Ker­ala FM Thomas Isaac to de­mand 4% GST on gold

The Economic Times - - Finance & Commodities -

Mum­bai: Ker­ala and Bi­har are seek­ing a higher Goods and Ser­vices Tax on bul­lion and jew­ellery, which trade as­so­ci­a­tions say is de­lay­ing a de­ci­sion on the mat­ter. The gov­ern­ment has fixed a four-slab struc­ture –– 5%, 12%, 18% and 28% –– for GST but said that tax on bul­lion and jew­ellery would be dif­fer­ent from th­ese. This has sparked spec­u­la­tion among trade on the quan­tum of tax on jew­ellery. While All In­dia Gem & Jew­ellery Fed­er­a­tion (GJF) is propos­ing a 1.2% GST for jew­ellery, In­dia Bul­lion & Jew­ellers As­so­ci­a­tion (IBJA) ex­pects it will be way higher at 8%, with im­port duty re­duced to 6% from the present 10%. “Ker­ala has a 5% VAT on gold and jew­ellery and states like Bi­har, which see low jew­ellery con­sump­tion, are pitch­ing for higher GST,” said Suren­dra Me­hta, nat i onal s e c ret ary, IBJA. “That’s one of the rea­sons for the GST Coun­cil not hav­ing fixed the rate for gold.” James Jose, sec­re­tary, As­so­ci­a­tion of Gol d Re f i n e r s & Mints, said this was be­cause Keral a f i nance min­is­ter TM Thomas Isaac held sig­nif­i­cant heft in the

GST Coun­cil among his peers from other states for his “ar­tic­u­late­ness” and “sound back­ground of eco­nom­ics”. Isaac con­firmed to ET that he would ar­gue for a 4% GST on gold ei­ther at the GST Coun­cil meet on Fe­bru­ary 18 or sub­se­quent meet­ings. “The rate (GST) has to be such that I don’t lose rev­enue. Even if there is rev­enue neu­tral­ity (cen­tre com­pen­sat­ing states for five years on any short­fall), what hap­pens after five years. I want growth in taxes, which will help in the state’s de­vel­op­ment,” said Isaac. Ker­ala, said Jose, con­sumes 20% of In­dia’s 1,000 tonnes an­nu­ally and col­lects ₹ 400 crore VAT each year.

TamilNadu,which­con­sume­safifthof In­dia’s gold, col­lects just ₹ 100 crore. That’s be­cause VAT in TN is just a per­cent.

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