Banks indulged in importing gold and precious metals will have to shed 3 per cent Integrated-Goods and Services Tax (IGST) , said the Central Government.
“Banks did not pay any Value added Tax on import of precious metals previously. They only paid customs duty,” said the Central Board of Excise and Customs(CBEC), clarifying the issues pertaining to the Goods and Services Tax (GST) on gems and jewellery through Frequently Asked Questions (FAQs).
“3 per cent Integrated-GST is payable on all imports of precious metals in addition to the basic customs duty. IGST paid can be taken as input tax credit by the banks,” added the FAQ.
Further, the banks would be responsible to pay IGST on such imports and not any overseas supplier, as per which the ownership is vested during movement of gold or silver.
“Ownership is not material for determining whether an import has taken place. Banks, being registered entities, would be liable to pay IGST on such imports but not the overseas entities since they are not effecting the import,” the FAQ said.
While the import of gold draws a 10 per cent basic customs duty. Prior to the GST, a 12.5 per cent countervailing duty (CVD) was also levied.
As GST overruled the CVD, a charge of 3 per cent was levied on gold and precious metal imports with effect from July 1.
“GST is payable at the rate of 3 per cent of the total transaction value of jewellery, whether the making charge is shown separately or not,” CBEC.
