GST impact: Non-availabilty of gold brings jewellery exports to standstill

Importers fear 3% tax on gold with full input credit will block working capital on every gram sold

Gold jewellery exports from India have come to a grinding halt the past two weeks due to non-availability of the metal for fabrication.

Trade sources said banks and nominated agencies responsible for bullion import have halted the entry of gold since implementation of the Goods and Services Tax (GST) effective July 1. They fear the government's decision to levy three per cent GST on bullion and jewellery with full input credit would hurt their profitability and block working capital on every gramme of gold they sell.

With reduced supply, all jewellery manufacturers, save those with some existing inventory of gold, have stopped