GST on Jewellery and Gems

This article addresses the questions like what is the rate of GST on Gems and Jewellery , GST on silver Jewellery, GST on Jewellery job work, how the old stock of jewellery will be dealt with, how the valuation needs to be done and who shall pay tax in case of job worker?

Let’s learn them via pointers:

• 3% IGST is payable on all imports of precious metals in addition to the basic customs duty.
• GST is payable @ 3% with effect from 01.07.2017 on Gold and Silver imported and lying in stock as on 1st July.
• GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.

For Example: When we are selling Gold, Diamond or Silver Jewellery to the end consumer (Customer) like a Gold Chain weighing10gm at a total value of Rs. 30,000/- (gold value is Rs. 28000/- and making charges on that gold chain is Rs 2000/-), can we charge GST @3% on the total value or @3% on the gold value and @5% on making charges?

Answer:  GST will be charged on the total value of Rs. 30,000/- @ 3%.

• The job worker, if registered, would be required to pay GST at the rate of 5% on job charges only. The jewellery manufacturer would in turn take credit of GST paid on such job work and may utilize the same for payment of GST on his outward supply of manufactured jewellery. However, if the job worker is exempted from registration, the jewellery manufacturer would be required to pay GST on his input supply from the job worker [of jewellery made out of precious metal given by him] on reverse charge basis. Nonetheless, he would be eligible to avail input credit of the tax so paid under reverse charge mechanism.