Editor’s Note
**Editor’s Note:** The government’s proposed GST overhaul, limiting tax slabs to 5% and 18%, has sent ripples through the jewelry market just as festive and wedding season shopping ramps up. We examine the potential impact on consumers and traders.
New Delhi:
With the festive season approaching, wedding season shopping is about to begin. However, in the meantime, the government has announced a reform of the Goods and Services Tax (GST). According to the new proposal, only 5% and 18% slabs will be included in the GST. This has caused turmoil in the jewelry market.
Traders say that jewelry currently attracts a 3% GST. There is concern that if it is increased to 5%, it will deal a severe blow to both the jewelry business and the common man’s budget. Traders are demanding that the government reduce the GST rate on jewelry instead of increasing it.
Ashok Seth, Chairman of the Delhi NCR Jewelers Committee, explains that silence has spread across the market. Everywhere, discussions about GST reform are taking place. In nine years, the tax burden on jewelry has tripled, weighing heavily on people’s shoulders. He stated that until 2016, a 1% VAT was applied to jewelry. After that, GST was introduced, and a 3% GST was imposed on jewelry. Despite this, people continued to buy jewelry, but in the last six months, the price of jewelry has nearly doubled.
Now, a buzz is rapidly spreading in the market that the government is going to reform GST. If the GST rate on jewelry is increased, it could lead to a slowdown in the market. In such a scenario, there is a demand from the government not to increase the GST rate on jewelry in the GST reform. Instead, it should be reduced.
Yogesh Singhal, Chairman of The Bullion and Jewelers Association, stated that the jewelry market is currently silent. However, discussions about GST reform are heated in the jewelry market. There is concern that if jewelry is moved to the 5% slab from 3%, it could cause chaos in the jewelry market. But it is hoped that the government will not do this. The Association demands that the GST rate on jewelry be reduced from 3% to 1%.
Sushil Jain, a silver trader from Kucha Mahajani, said that there is a state of confusion in the market right now. Every trader is giving their own argument. Some say the tax on silver will be increased, while others say the GST rate will remain stable. But if the GST rate on silver and gold increases, black marketing could rise.