gold jeweleryImage Credit source: ai generated
Customers who buy gold during wedding and festival seasons are often shocked to see the jewelery bill. Amidst the rising prices of gold, due to the addition of two types of GST in the bill, people get confused as to why double tax is being imposed on them. Actually, while buying gold jewellery, separate GST is applicable on both the price of gold and the making charge. If you are also preparing to buy gold, then first understand the complete mathematics of the bill.
In India, gold is not just a means of investment but is also associated with tradition and emotions. People like to buy gold jewelery on weddings, festivals or any special occasion, but when the bill is made at the jewelery shop, many times the customers are surprised. The biggest reason for this is the double GST imposed on gold. Often people feel that they are being taxed twice on the same thing, whereas different tax rules of the government work behind this. If you are also going to buy gold soon, then it is important to first understand how GST is added to the jewelery bill.
3% GST is levied on the price of gold
Whenever a customer buys gold, be it gold coins, biscuits or jewellery, 3% GST is levied on its original price. This tax is levied on the actual market value of gold. For example, if you have purchased gold worth Rs 1 lakh, Rs 3,000 will be added as GST on it. This tax applies equally throughout the country.
5% GST has to be paid separately on making charges.
The bill does not stop at just buying gold, the cost of artisan's hard work and designing is also included in making jewellery, which is called making charge. The government considers it a service and that is why a separate 5% GST is imposed on the making charge. Suppose the making cost of a necklace is Rs 20,000, then Rs 1,000 GST will be added separately on it. This is why customers see two different taxes in their bills.
Is the customer really paying double tax?
Technically speaking, the customer is not paying tax on the same item twice. The first tax is levied on gold metal, while the second tax is levied on the service of making jewellery. Therefore both taxes fall in different categories. However, it is a bit difficult for common customers to understand, because both GSTs are added together in the bill and the total amount increases significantly.
What will be the benefit in exchanging old gold?
Many people exchange old jewelery and buy new designed jewellery. In such cases the tax rules are slightly different. If you give your old gold and get a new jewelery made in exchange for it, then you will have to pay only the making charge and 5% GST on it, but if you take money by selling the old gold and later buy a new jewellery, then you will again have to pay 3% GST on the entire price of the new purchase.
What things should be kept in mind while buying jewellery?
While buying gold, always take a detailed bill and check the gold value, making charge and GST separately. Apart from this, definitely check the BIS hallmark, so that there is no problem regarding the purity of gold. Experts believe that the option of gold exchange sometimes proves to be more beneficial for the customers, because it can reduce the tax burden to some extent.
-
Dhurandhar 2 Slips 5.45% On Wednesday, Bhooth Bangla Becomes Akshay Kumar’s Third Biggest Post-COVID Hit
-
Why Is Apple Spending Rs 100 Crore In India? Hint: It's Not Just About iPhones
-
Vijay's Oath Ceremony Not Today? TVK Yet To Stake Claim As Governor Not Convinced: Report
-
Tamil Nadu Govt Formation: AIADMK Moves Section Of MLAs To Puducherry Resort Amid Numbers Game
-
Shikhar Dhawan Officially Registers Marriage With Sophie Shine In Gurugram
