Decoding GST levied on gold purchases

 The goods and services tax is charged on the total value of gold purchased as well as the making charges.

PHOTO REUTERS


As the price of the yellow metal has corrected, physical gold buying activity has picked up. As per a report from Bloomberg, gold imports in March touched the highest monthly total in almost two years. If you are planning to buy gold, apart from the making charges, you should keep the taxes in mind.

In case you are buying physical gold, you also need to pay goods and services tax (GST).

On gold jewellery, a GST of 3% is levied. The GST is charged on the total value of gold purchased as well as the making charges. For example, if you are buying a gold ornament at the price of ₹45,000 per 10 gm and the making charges are at the rate of 10%, then the total cost after making charges will be ₹45,000 plus 10% of ₹45,000 = ₹49,500. GST at the rate of 3% on the ₹49,500 will be levied, taking the total cost of purchase to ₹50,985.

In case you are getting an old gold ornament redesigned, GST at the rate of 18% will be levied on the making charges as here you are providing your own gold.

GST is not only levied in case of buying physical gold, but also in the case of digital gold.

So, in case you are buying digital gold, apart from the other charges, you also need to pay GST at the rate of 3% as the digital gold provider buys physical gold in your name equivalent to the amount invested.

The same is the case with gold exchange-traded funds (ETFs) offered by mutual funds. They also back the investments with physical gold. However, in case of gold ETFs, the GST is paid back to investors as the fund house takes input credit for the same.

source:https://www.livemint.com/money/personal-finance/decoding-gst-levied-on-gold-purchases-11618335498202.html 

Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud...
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the ...
Read more

Income Tax Dept detects ₹350 cr unaccounted cash receipts after raid in Rajkot

Image
  The Income Tax Department carried out a search and seizure operation on a real estate group based in Gujarat's Rajkot and found unaccounted cash receipts in various projects of approximately ₹350 crore, the Finance Ministry said on Friday. The group is among Gujarat’s prominent real estate builders and developers and is actively engaged in real estate, construction and land trading businesses in and around Rajkot. More than 40 premises were covered in the search operation. During the course of operation, many incriminating documents and digital evidences were seized indicating involvement of the group in unaccounted transactions. The IT sleuths found substantial evidence of transactions outside the regular books of accounts, unaccounted cash expenses, cash advances received and interest paid in cash. Evidence of on-money payments in real estate projects-flats, shops and land deals has also been found. Total unaccounted cash receipts in various projects of approximately ₹350 crore...
Read more