New Delhi: Banks importing gold and precious metals will have to pay a 3 percent tax under the GST, which can be claimed as a tax credit for inputs, the government said.
The Central Tax and Customs Board noted that the banks did not pay any VAT on the import of precious metals before clearing the GST issues in gems and jewelry through Frequently Asked Questions (FAQs). They only paid customs duties.
However, under the GST, “the IGP paid may be taken as input tax credit by the banks”.
He also said that banks would be required to pay the IGST on those imports and not any overseas supplier in which the property is acquired during the movement of gold or silver.
“The property is not important to determine if an import has taken place. The banks, which are registered entities, would be obliged to pay IGST on those imports, but not the foreign entities since they are not doing the import,” said the FAQ.
The import of gold attracts a basic customs duty of 10 percent. In addition, a countervailing duty of 12.5 per cent (CVD) was applied before the GST. Since the TPC is added to the CVD, therefore, the GST rate on gold at 3 percent has to be paid at the time of imports in the form of IGST with effect from 1 July.
The CBEC also clarified on the GST collection where the total value of a gold ornament is Rs 30,000, including Rs 2,000 as charge saying, “GST is paid at the rate of 3 percent of the total value of the jewelry transaction, Whether the manufacturing load is shown separately or not. “
