.png)
However, gold refineries, which import more gold or
unrefined gold, will have to pay 3% IGST
The government has
issued a notification allowing 36 banks and five canalising agencies,
including MMTC and MSTC, to import gold without paying a 3 per cent
integrated goods and services tax (IGST). It’s a big relief for
financial institutions importing gold, as the 3 per cent tax was an additional
burden on them.
Till now,
importers’ working capital used to get blocked until they got the refund
on GST paid. However, the new notification removes that hurdle and
smoothens the process of import. Analysts say gold imports on a
consignment basis, which had almost stopped after the implementation of the
GST, will resume again. So far, most import was happening as gold metal loans
usually by banks.
In the case of
consignment import, an importer kept gold ready in stock and it was priced when
sold. This was helpful as sudden demand helped banks to give
virtually spot delivery. However, due to the 3 per cent IGST payable
on imports, banks and other agencies had stopped it. The latest
notification doesn’t change anything for traders who will have to pay 10 per
cent import duty and 3 per cent IGST and claim back the IGST as
input credit. Gold refineries that import dore gold or unrefined gold,
will have to pay the IGST and hence, they are at a disadvantage
compared to refined gold importers.
Surendra Mehta,
national secretary, Indian Bullion and Jewellers Association, said, “Removing
the IGST on gold imports and not on dore imports (gold
dust) will kill Indian gold refining industry.”
No comments:
Post a Comment