FAQ for GST on Gems & Jewellery dated 18-08-2017
General FAQ on GST – GST Frequently Asked Questions (FAQs)
GST
Question 1 : Whether advertising and communication material (banners/hoardings/posters) provided to distributors would be treated as supply in the course of business by the company thereby not requiring any reversal of ITC.
Answer :
(a) Where the material is provided free of cost :
This would not amount to a supply and hence no tax is payable on such transaction and in such a case credit availed by the company would need to be reversed in accordance with section 17(5) of the CGST Act, 2017.
(b) Where the material is provided for a consideration :
This would amount to a normal supply.
Question 2 : Currently Banks do not pay any VAT on import of precious metals. Banks/nominated agencies pay only customs
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liable to pay IGST on such imports but not the overseas entities since they are not effecting the import.
Question 4 : Gold and silver imported by banks/nominated agencies on consignment basis are lying in stock as on 1st July. Clarification is required on how to charge the customers in transition phase from VAT to GST. Will customers be liable to pay GST rates?
Answer : GST is payable @ 3% with effect from 1-7-2017.
Question 5 : Banks lend gold in physical form for a period not exceeding 6 months. Banks receive interest on the gold ounces disbursed and the same is converted into Rupees after calculation of interest on the ounces and the USD/INR conversion. Will the same methodology continue in case of GST as well wherein Banks shall pay a provisional GST (i.e. IGST/SGST/CGST) on ongoing market prices and pay the final GST as and when the prices are fixed?
Answer : Yes, Banks may avail of the benefit of provisional assessment provided under section 60 of the CG
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we charge GST @ 3% on the total value or @ 3% on the gold value and @ 5% on making charges?
Answer : GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.
Question 8 : When we issue gold as raw material to our Job Worker for Job Work and he returns that gold as finished goods, what GST treatment will be done and how to calculate the value?
Answer : The job worker, if registered, would be required to pay GST at the rate of 5% on job charges only. The jewellery manufacturer would in turn take credit of GST paid on such job work and may utilize the same for payment of GST on his outward supply of manufactured jewellery. However, if the job worker is exempted from registration, the jewellery manufacturer would be required to pay GST on his input supply from the job worker [of jewellery made out of precious metal given by him] on reverse charge basis. Nonetheless, he would be eligible to avail in
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