NITI Aayog suggests slashing import duty, GST rate on gold

Press Trust of India

Government think-tank NITI Aayog has suggested the government brings down import duty on gold from the existing level of 10 per cent and also slash the GST rate on the precious metal from the current 3 per cent.

It has also recommended review and revamp of the gold monetisation scheme and the sovereign gold bond scheme and called for introducing new gold savings account in banks besides setting up of a gold board and bullion exchanges across the country to have greater financialisation of the yellow metal.

In its latest report, the committee, headed by NITI Aayog Principal Adviser Ratan P Watal, said: “A reduction in the customs duty in the past in India has been argued to support tax compliance coupled with a significant reduction in the quantum of gold smuggled into India.

“In this context, to create a tax compliant system within the sector, it is important to reduce the basic customs duty on gold to as low as possible.”

The committee also suggested exemption of 3 per cent Integrated Goods and Service Tax (IGST) to be paid by exporter in line with customs duty with a provision of bank guarantee. The IGST exemption should also be extended to the supply of gold by foreign buyer, it added.

Besides, the committee said there should be reduction of GST on gold from 3 per cent to appropriate levels. Job workers receiving gold from other states may be considered for exemption from obtaining GST registration.

Further, it said the threshold for exemption under GST, which at present is ₹20 lakh, should be revised on the basis of value-added, which can be determined by using average ratio of value added to value of sales for the sector concerned.

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