With the introduction of Goods and Service Tax (GST), various segments of the market were restructured. The yellow metal commonly called Gold was impacted too. The product cycle of Gold attracts GST rates at different levels. Be it manufacturing or purchasing, can we claim GST on gold purchase from customer and GST on jewellery is applicable. Previously, gold buyers aware of gst on purchase of old gold from customer and old gold gst rate. But, now according to current GST rules, gold buyers should know RCM on gold purchase from unregistered dealer under GST, so just see the followings:
With the introduction of GST, the value of Gold has increased by approximately 0.75%. Before the GST era, Gold was taxed at 2% (1% as VAT and 1% as Service Tax). Even now there's GST on jewellery job work as well. The government has notified that GST will be levied at 3% on gold purchased, also levied RCM on old gold purchase. However, this GST rate will vary depending on the type of gold, the mode of trade (domestic/imports) and the sectors (unorganised or organised) involved.
Gold jewellery sold by an unregistered supplier will be taxed under the reverse charge mechanism. This is the reason that suppliesrs ask that can we claim gst on gold purchase for personal use. This provision of GST was introduced to prevent the illegal trading of gold.
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