GST on gold fixed at 3%, industry welcomes lower tax rate. The GST Council today fixed the rate of tax on gold at 3%, ET Now reported citing unidentified sources. The rate of tax is lower than the lowest slab of 5% under the new GST regime to be implemented from July 1, and is closer to the current tax incidence of about 2%. Notably, the traders’ lobby had been demanding to keep the levy on the precious metal at close to a concessional rate of 1%.Market experts had expressed concerns that a higher tax rate on gold will only add to the already high proportion of cash transactions on the commodity, and will increase gold smuggling with most traders choosing to evade taxation altogether.Gold price staged a smart recovery on Saturday at the bullion market, surging Rs 300 to Rs 29,550 per 10 grams largely on firm global cues and pick up in buying by local jewelers. Yesterday, gold price fell in the local markets with the dealers reportedly selling the precious metal at a discount to the official prices, over concerns of the higher tax levy than the current effective incidence of about 2%.Earlier last month, the GST Council, tasked with tasked with framing rules for implementation of GST, finalized the rate of tax on over 1,200 items and most of the services, while deferring decision on six items including gold to today’s meeting. The council has proposed four tax slabs at 5%, 12%, 18% and 28% under GST.
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