GST on Gems & Jewelry A Detailed Analysis

Page Contents

Gems & Jewelry Industry in India
GST Taxation on Gems & Jewelry
GST Rates on Gems & Jewelry
Transactions under GST

Gems & Jewelry Industry in India

The gems and jewellery market in India is home to more than 300,000 players, with the majority being small players.
Its market size is about US$ 75 billion as of 2017 and is expected to reach US$ 100 billion by 2025.
India is one of the largest exporters of gems and jewellery and the industry is considered to play a vital role in the Indian economy as it contributes a major chunk to the total foreign reserves of the country.
The Gems and Jewellery sector, contributing around 7 per cent of the country’s GDP and 15 per cent to India’s total merchandise exports.
Its contribution to foreign exchange earning stood at UDS 38.59 billion in 2016.
It also employs over 4.64 million workers and is expected to employ 8.23 million by 2022. One of the fastest growing sectors, it is extremely export oriented and labour intensive.
It contributes 29 per cent to the global jewellery consumption.
India exports 75 per cent of the world’s polished diamonds.
Gold demand in India rose to 338.70 tonnes between January to June 2018.
India’s gems and jewellery exports stood at US$ 13.18 billion between April – August 2018*. During the same period, exports of cut and polished diamonds stood at US$ 10.31 billion, thereby contributing about 78.22 per cent of the total gems and jewellery exports in value terms. Exports of gold coins and medallions stood at US$ 201.75 million and silver jewellery export stood at US$ 239.04 million between April – August 2018.

GST Taxation on Gems & Jewelry

Pre GST

Excise duty @ 1%

State VAT in range of 1% – 1.2% highest being 5% in the state of Kerala.

Import Customs Duty of 10%.

Import – Ed. Cess + SHEd Cess – 3%

GST Rates on Gems & Jewelry

Transactions under GST

Gem & Jewelry Sector has a very Complex and varied transactions like the below cases which are discussed in the PPT in detail how GST applicable in such cases at the below link.

Case -1 : Sales Transaction : Single Price inclusive of Making Charges
Case – 2 : Sales Transaction : Making Charges Shown Separately
Case – 3 : Sales Transaction : Diamond Studded Jewelry
Case – 4 : Promotional Schemes
Case – 5 : Promotional Schemes : After Sale Gifts through Lottery
Case – 6 : Sending for Job Work to Karigars
Case – 7 : Repairing of the Old and Worn out Jewellery
Case – 8 : Making Charges & Job Work
Case – 9 : Exchange a Coin / Bullion into Ornaments
Case – 10 : Buying & Selling of Old Ornaments
Case – 11 : Old Jewelry is Completely Remade after Melting And Sold
Case – 12 : Sending on Approval Basis
Case – 13 : Transferred for Exhibition to a Different State – Casual Registration
Case – 14 : e Way Bill : Exemption
Case – 15 : Input Tax Credit & Credit Refund
Case – 16 : Imitation Jewelry – Inverted Tax Structure
Case – 17 : Supply From Un-registered (Business) : Liability to Pay GST on RCM
Case – 18 : Supply From Un-registered Individual
Case – 19 : Exchange offer : Valuation
Case – 20 : Supply by SEZ Units
Case – 21 : Stock Transfer of Goods Between Braches:
Case – 22 : Place of Supply Provisions
Case – 23 : Time of Supply
Case – 24 : GST on Advance Payment
Case – 25 : Hallmarking Charges
Case – 26 : Goods Sent For Exhibition
Case – 27 : Goods Physically Carried by Representative
Case – 28 : Packing Costs and Freight Charges
Case – 29 : Processing Loss
Case – 30 : GST rate for intermediaries/ aggregators

Details of GST Applicability are discussed for all the above cases in PPT link @ below

Disclaimer : The views and opinions; thoughts and assumptions; analysis and conclusions expressed in this article are those of the authors and do not necessarily reflect any legal standing.

Author : SN Panigrahi, GST Consultant, Practitioner, Corporate Trainer & Author

Can be reached @ [email protected]