Gem and jewellery exporters will no longer have to pay three per cent IGST on gold to nominated agencies with effect from January 1, 2019, the GST council announced.
“We commend this step undertaken by the Government. On recommendations of the Council, the GST Council ruled that it was satisfied and it is necessary in public interest to exempt the intra-State supply of gold falling in heading 7108 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when supplied by Nominated Agency under the scheme for "Export Against Supply by Nominated Agency.” We are also expecting a similar relief from Govt. to the exporters of articles of silver & platinum very soon,” Pramod Kumar Agrawal, Chairman, GJEPC said.
The upfront payment of IGST and import duty in the form of bank guarantee had further led to the huge working capital blockage for various small and medium jewellery exporters, increased interest cost, hassles of compliance to claim refund thus consequently impacting their business operations and global competitiveness, he added.
The GST rate on cut and polished diamonds and gemstones also was reduced from 3 per cent to 0.25 per cent, while GST rate of 5 per cent (job work charges) effective from January 25, 2018.
As the goods sent on consignment basis for the purpose of foreign exhibitions, export promotion tours is not a supply, GST should not be levied on goods exported for such purpose or when re-imported.