GST Reform
Amidst the preparations for the festive and wedding season, a government announcement has created panic in the jewelery market. The central government has indicated a change in the Goods and Service Tax (GST) system, under which only 5% and 18% tax slabs will remain. Jewelery at this time looks 3% GST. Businessmen fear that if it is put in 5% slab, then gold and silver jewelry will become more expensive. This will not only affect the market, but will also be seen clearly on the pocket of the common man.
Tax has increased three times
Ashok Seth, chairman of the Delhi-NCR Jewelers Committee, says that only 1% VAT was used on jewelry. But ever since GST came into force in 2017, this tax has become directly 3%. That is, the tax increased three times before. Despite this, people did not stop buying gold and silver. However, now the price of gold has almost doubled in the last six months. In such a situation, if the government increases the GST rate further, then it will be more difficult for the common man to buy jewelry.
Not only the price of metal is added to make gold and silver jewelery, but also makes a making charge. This is the amount that is the value of the hard work of the artisans. The government has placed 5% GST on these making charges. That is, the service of jewelry is already being taxed. At the same time, gold and silver fall in 3% GST slab. Talking about diamonds, two slabs of 0.25% and 3% apply to it.
Now if the jewelery is also put into a 5% slab, the total cost will increase further. In such a situation, not only the customers will be upset, but the market can also stop. Businessmen are already under pressure, and now the news of GST reform has increased their concern.
If GST increases, there will be silence in the market
Yogesh Singhal, chairman of The Bullion and Jewelers Association, said that these days, customers are not equal in the jewelery market. There is only one discussion everywhere – is GST going to grow? If increased from 3% to 5%, it will directly increase the prices of jewelry. This will reduce the demand, weakened business and can create an atmosphere of recession in the market. He has appealed to the government to reduce GST to 1% on jewelery, which gives a boost to purchase.
Black marketing will increase if tax increases
Sushil Jain, a silver businessman of Kucha Mahajani, says that there is a lot of confusion in the market. Some say that if the tax will increase, then someone says that it will not change. But if the government increases tax on gold and silver, then the common customer will start buying jewelry without receipt. This can increase black marketing and the government will also suffer revenue loss. Businessmen demand that GST be reduced instead of increasing, so that business will continue in a transparent manner and customers can also shop with open mind.
Demand to reduce tax on jewelery
Jewelers organizations and traders have clearly told the government that the 3% GST that is still on jewelery should not be increased. He says that if this tax is reduced to 5%, then it will directly affect the pockets of the common people and there may be a slowdown in the market. However, some media reports have also told that the government has sent the draft of the new GST system which is being called Next Generation GST. In this new proposal, it has been said to keep 3% on gold and silver as before and 0.25% GST on diamonds.
If this happens, the prices of jewelry will not be affected, and the market will get relief. But until there is no official announcement by the government, the situation cannot be considered completely clear. Because of this, the jewelery market is still in confusion and concern. Businessmen are waiting for the government to make a concrete statement on this issue soon, so that the customers can also shop with confidence and return to the market.