Banks to pay 3% tax on gold imports

India Infoline News Service | Mumbai | August 22, 2017 16:14 IST

Banks will have to pay 3% tax on gold and other precious metals imported by the financial institutions under the ambit of GST which can be claimed as input tax credit.

Banks will have to pay 3% tax on gold and other precious metals imported by the financial institutions under the ambit of GST which can be claimed as input tax credit, reported a leading business daily.
 
Clarifying issues on GST on gems and jewellery through Frequently Asked Questions (FAQs), the Central Board of Excise and Customs (CBEC) said banks previously did not pay any VAT on import of precious metals. Banks only paid customs duty.
 
However, under GST, 3% Integrated-GST is payable on all imports of precious metals in addition to the basic customs duty. IGST paid can be taken as input tax credit by the banks, the report said, adding that banks would be liable to pay IGST on such imports and not any overseas supplier in which ownership is vested during movement of gold or silver.
 
Import of gold attracts a 10% basic customs duty. On top of that a 12.5% countervailing duty (CVD) was levied prior to GST. Since GST subsumed CVD, the GST rate on gold at 3% has to be paid at the time of imports in the form of IGST with effect from 1 July, 2017.

The CBEC also clarified the levy of GST where the total value of a gold ornament is Rs 30,000, including Rs 2,000 as making charge saying that GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.

Disclaimer: The contents herein is specifically prepared by ‘Dalal Street Investment Journal’, and is for your information & personal consumption only. India Infoline Limited or Dalal Street Investment Journal do not guarantee the accuracy, correctness, completeness or reliability of information contained herein and shall not be held responsible.

 

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