New GST revision welcomed by jewellers
The GST Council has decided to allow customers to only pay tax on their deposit schemes when they redeem their purchases in a move that has been widely praised by Indian jewellers.
Following customer complaints about having to pay Goods and Services Tax (GST) on monthly instalments towards jewellery purchases, the GST Council has relented and allowed for tax to only be applicable on the redemption of their investments. The move has been celebrated by jewellers who have been feeling the heat since the GST’s implementation in July.
A scheme used by many purchase more expensive jewellery items, especially those made with gold and diamonds, is one where customers pay in 11 instalments on a monthly basis and the jeweller pays the twelfth instalment. That money is then redeemed in store for a jewellery purchase. Previously, each of these instalments was considered as a “receipt of advance” and was thus subject to the GST and the rate was set at three percent. Under the GST Council’s new regulations, however, the three percent GST will only be applied on redemption of the jewellery instead of at each payment.
The Chairman of the All India Gems & Jewellery Trade Federation, Nitin Khandelwal, commented on the matter: “We had made representations to the government on this issue. The GST Council has now said that three percent GST will be charged when the invoice is raised against [the] purchase of gold.”
Previously, GST relief under the aforementioned scheme had been granted to those who were both registered and had a turnover of 1.5 crore rupees (approximately 200,000 dollars) in the previous financial year. This relief has now been extended to all registered persons with the exemption of composition dealers. The new regulations have seen a return to pre-GST norms which jewellers had been demanding for several months.
Copyright © 2021 FashionNetwork.com All rights reserved.