Kerala, Bihar Demand Higher GST on Jewellery
Kerala FM Thomas Isaac to demand 4% GST on gold
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.