Gold plays an important role in Indian culture, weather it is a festive season or a wedding we buy gold.Even from an angle of Investment gold plays a vital role. But many a times while purchasing this asset we are unable to understand the calculation done by the shopkeeper. It is an attempt from this article to give an easy understanding of GST (Goods and Service Tax) calculation on Gold and on Gold Jewellery.
We all are aware of this fact that before implementation of GST we had to pay 10% Customs duty, 1% Excise duty and 1.2% VAT on purchase of Gold. But now under the changed compliances VAT and Excise duty have been replaced by 3% GST with 10% Customs duty remaining same.
GST Calculation on Gold i.e Bullion / Biscuits etc
Eg: If you have to buy 100gm Gold @ rate being 32000/10gm ,calculation would be-
Before Implementation of GST:
Total Price (a) 3,20,000
+10% Customs duty (b) 32,000 [a*10%]
+1% Excise duty (c) 3,520 [a+b]*1%
+1.2% VAT (d ) 4,266 [a+b+c]*1.2%
Total cost of gold 3,59,786/- Rs
After GST Implementation;
Total Price (a) 3,20,000
+10% Customs duty (b) 32,000 [a*10%]
+3% GST (c) 10,560 [a+b]*3%
Total cost of Gold 3,62,560/- Rs
In the above example we discussed about the purchase of pure gold. But when we purchase any ornament, we have to bare the making charges of the ornament along with the cost of Gold. Making charges would differ from ornament to ornament as well as from shop to shop. But what remains same is the GST on this making charges. GST on Making charges is 5%. So let's understand the calculation of the same.
GST calculation on Gold Jewellery:
If you purchase a necklace of 100gm, its price will above 3,62,560/- + Making charges + GST on Making charges (i.e 5%).
Say making charges rate is 12%,
Calculation:
Total Price (a) 3,20,000
+10% Customs duty (b) 32,000
+3% GST (c) 10,560
+ Making Charges (d) 42,240 [a+b]*12%
+5% GST on making 2,112 [d*5%]
Total cost of Necklace 4,06,912/- Rs
I hope this blog article helped you in understanding the calculation in easy manner.
