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GST on gold deferred as consuming and producing states spar over rates

Rajesh Bhayani / Mumbai 20 May 17 | 02:36 AM

The Goods and Services Tax (GST) Council deferred on Friday a decision to June 3 on the rate for gold, following unresolved differences between consuming and producing states.

The former wanted a two per cent GST on jewellery, while other states were okay with five per cent. The Council had proposed four per cent as a consensus but a decision could not be taken.

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At present, one per cent is the effective excise duty, while valued added tax (VAT) is 1-1.25 per cent in most states. In Kerala, it is five per cent but under a composite scheme which most jewellers have been opting for, the effective rate is 1.25 per cent.

The All India Gems and Jewellery Trade Federation had proposed 1.25 per cent; Indian Bullion and Jewellers Association had proposed  2.25 per cent, combining VAT and excise duty. The industry is paying 10 per cent customs duty for imported gold.

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