Fearing that the cut in gold import duty may make gold bond scheme less viable, some government sources told ET Now that the Finance Ministry is in favour of fixing the GST rate on gold at 3% and it is not keen to cut the import duty on gold as of now. The sources further said that the industry has recommended 4% cut in import duty on gold. “Industry has asked for same rate for gold jewellery making charges under GST. It has also asked the ministry to keep incidence o the tax on gold same,” sources said. The final call on fixing the GST rate on gold will be with the PMO and not the GST council.
Dubbed as the biggest tax reform since Independence, GST will unify at least 10 indirect taxes into one to be collected at state and central levels. In the International Finance Discussion Paper (IFDP), the US Fed researchers said GST is an ‘inclusive policy’ that is also expected to bring down overall domestic and international trade barriers.
The main purpose for GST is to eliminate this compounding effect by fixing the final tax rate, where goods will fall into one of the four rate categories of 5, 12, 18, and 28 per cent. The unified structure is currently expected to be rolled out in July
Meanwhile there were reports that the Commerce Ministry is planning to introduce a comprehensive gold policy, CNBC-TV18 said citing a NewsRise report. “We are mulling a new comprehensive gold policy to bring domestic and foreign gold trade rules under one roof,” a commerce Ministry official reportedly said. The official further said that the gold policy will likely suggest a gold board to oversee the gold and jewellery sector. “The Commerce Ministry will seek shareholders’ inputs on this policy by June and submit a proposal to the Finance Ministry by August,” the official added.