The Deputy Chief Minister of Bihar Sushil Modi has said that the group of a minister is free to choose whether the e-way bill has to be enforced on the intrastate movement of gold.
On Friday, Kerala’s Finance minister Thomas Issac stated that a tax of 3 percent GST on the auction of vintage gold has to be offered to check tax evasion.
The panel also agreed to make it compulsory for gold & jewelry shops to produce e-invoice for each purchase & sale transaction. Bihar Deputy Chief Minister Sushil Modi stated the Group of Ministers (GoM) achieved a consensus on allowing states to decide whether to have an e-way bill for an intra-state measure of gold. The GoM also agreed to implement an e-way bill for the shipping of gold within the states, but applying it for the inter-state movement was not deemed feasible. The panel also agreed to make it compulsory for gold & jewelry stores to generate e-invoice for every buying & sale deal.
The Deputy Chief Minister of Bihar Sushil Modi has said that the group of a minister is free to choose whether the e-way bill has to be enforced on the intrastate movement of gold. He further stated the PTI that it was agreed that if any state intends to execute an e-way bill for gold, they can accomplish so for intra- or within the state transportation. Gujrat and Bihar thought that it was not possible to have an e-way bill for the interstate movement of commodities, whereas Kerala & Karnataka concur on the same said by Modi, the owner of a financial portfolio. The GoM, encompassing finance ministers of Kerala, Gujarat, Bihar, Punjab, Karnataka & WB(West Bengal), put up to scrutinize the feasibility of completion of the e-way bill for passage of gold & precious stones met through the video conferencing.
Isaac started the GoM came at a consensus on creating the sale of old gold within the GST scope under the reverse charge mechanism (RCM). Issac told the PTI that it was agreed that the sale of old gold would entice GST at 3 percent under RCM. The officers’ board will here and now perform on the modalities. Issac adds up that this will have to be verified as Tax evasion for most of the gold trafficked is swapped as the old jewelry for dodging the GST.
Under RCM, the buyer would be responsible for collecting & deposit the GST with the government. GoM has revealed to start e-invoicing for traders engaged in jewelry businesses that help in chasing down the users of gold said, Issac. Isaac further said the GoM has agreed to begin e-invoicing for jewelry traders, which will help track down the end-user of gold. He stated that the debate was that the limit for e-invoice should be at ₹5 crores. The GoM, primed up by the GST Council in November 2019, was also tasked to indicate alternative ways & system to curb tax evasion on gold.
The final report of the GoM would be put before the Council. Underneath the goods and services tax system, e-way bills are needed for inter-state transportation of goods priced over ₹50,000. Though gold is spared. If the GST inspector will inquire about the business as well as shippers, then an electronic waybill method has to be delivered before him. AMRG & Associates Senior Partner Rajat Mohan said, imposing GST on reverse payment basis in case of findings from non-registered persons would assist arrest the widespread tax evasion occurring in case of the jewelry trade. Mohan added that this move would also help reduce the circulation of trafficked gold in India as the tax arbitrage for the black marketeers would fall by 3 percent of gross value.
Accordingly, the selling of old jewelry by a person to a jeweler will not entice the provisions of Section 9 (4) of the GST act & the jeweler will not be responsible for paying tax under reverse charge mechanism on such items, it said. However, if an unregistered provider of gold trinkets sells it to the listed supplier, the tax will use under the reverse charge mechanism. Under this mechanism, the burden of paying tax is on the recipient of goods or services & not on the supplier. Gold jewelry draws a 3% tax under GST. Section 9 (4) of the Central GST Act requires that the registered being will reimburse tax on the allocation of taxable goods (gold, in this suit) by an unregistered supplier (an individual, in this suit) to a registered individual (the jeweler, in this suit) under the reverse charge mechanism.
This provision, though, has to be recited in combination with section 2 (105) read with sec—7 of the act. Sec. 2 (105) identifies supplier as a person providing the goods or services. Sec. 7 offers that supply is a transaction for a matter by a person in the way of furtherance of business, it said.
The explanation will give relief to individuals offering old gold jewelry to jewelers and purchasing new ornaments from the issue received.
