Between festivals and wedding season preparations, government advertising has stirred the jewelry market. The Central Government has indicated a change in the Goods and Services Tax (GST) system, under which only 5% and 18% tax slabs will now be. Currently, 3% GST is levied on jewelry. Traders fear that gold and silver jewelry will be more expensive if they are placed in 5% slabs. Its effect will be clearly visible not only on the market, but also on the pockets of the common man.
Ashok Seth, chairman of the Delhi-NCR Jewelers Committee, says that only 1% of the jewelry was consumed. But since the GST was implemented in 2017, this tax has been directly 3%. That is, tax has increased threefold than ever before. Nevertheless, people did not stop buying gold and silver. However, in the last six months, the price of gold has almost doubled. In this case, if the government increases the GST rate, it will be more difficult for the common man to buy jewelry.
Not only the price of metal is added to make gold and silver jewelry, but also a making charge is charged. This is the amount that is worth the hard work of the craftsmen. The government has kept 5% GST on this making charge. That is, more tax is already being levied on the service of the jewelry. At the same time, gold and silver come in 3% GST slab. Talking about diamonds, two slabs of 0.25% and 3% are applied to it.
Now if the jewelry is also placed in 5% slabs, the total cost will increase. In such a case, consumers will not only be harassed, but the market can also be stabilized. Traders are already under pressure, and now the news of the GST reform has raised their concerns.
Bullion and Jewelers Association Chairman Yogesh Singh said that there is hardly any customer in the jewelery market nowadays. There is only one discussion everywhere – will GST grow? If it is increased from 3% to 5%, it will directly increase the price of jewelry. This will reduce demand, will weaken the business and create a downturn in the market. He appealed to the government to reduce GST to 1% on jewelry, so as to accelerate the purchase.
Sushil Jain, a silver trader of Kucha Mahajan, says that there is a lot of confusion in the market right now. Some say that tax will increase, while some say that there will be no change. But if the government increases tax on gold and silver, the normal customer will start buying jewelry without receipt. This can increase the black market and the government will also lose income. Traders demand that instead of raising GST, it should be reduced, so that the business continues transparently and consumers can buy openly.
Jewelery organizations and businessmen have clearly told the government that 3% GST is currently being applied to jewelry should not be raised. He says that if this tax is increased to 5%, it will have a direct impact on the pockets of ordinary people and the market may have a slowdown. However, some media reports also said that the government has sent a draft to the states, a new GST system, called Next Generation GST. This new proposal is said to keep 3% GST on gold and silver as before and 0.25% GST on diamonds.
If this happens, the price of the jewelry will not be affected, and the market will be relieved. But the situation cannot be completely clear until the official announcement is made by the government. Because of this, the jewelry market is still confused and worried. Businessmen are waiting for a concrete statement on the issue soon by the government, so that consumers can buy with confidence and the market will regain its shine again.
