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GST on making charges

Sumit Kr. Lohani (Industrial Trainee) (55 Points)

11 June 2018

Pls. advice what is the rate of GST on making charges paid by customer on purchase of jewelleries, assuming that the seller shows the making charges seperately in invoice ??

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9 Replies

CA Padmasri Manyam (CA in Practice) (1340 Points)
Replied 11 June 2018

GST rate as applicable on gold would be applicable on making charges as well, since it is composite supply. The principal supply is supply of gold.

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Sumit Kr. Lohani (Industrial Trainee) (55 Points)
Replied 11 June 2018

sir I agree with u it's a composite supply. But the seller is declaring making charges seperately in the invoice which is liable for seperate rate of gst, somewhere it's showing 18% and somewhere 5%. just wanted to know which one is correct

CA Padmasri Manyam (CA in Practice) (1340 Points)
Replied 11 June 2018

They cannot charge separate rate on making charges, even if they show making charges separately in the invoice. They need to apply the tax rate as applicable to the gold.

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robinghosh (accountant) (180 Points)
Replied 11 June 2018

yeah I agree with @ padmasri sir
that's a cost apart things
so it's added with cost

R. B. Yadav (CMA, LLB) (Tax Consultant) (590 Points)
Replied 11 June 2018

Jeweller supply the jewellery only, not any service. Making charge is the manufacturing cost for the jewelly.

For GST purpose, service charges should not be shown seperately on invoice. Same rate of GST which is applicable on jewellery will be applicable on total value whether it is cost of gold or cost of making.

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Sumit Kr. Lohani (Industrial Trainee) (55 Points)
Replied 11 June 2018

ok..thanks for the support !

Vinod Babu (24191 Points)
Replied 11 June 2018

Agree with everybody's views.

Final price of the jewellery = Price of (22 KT or 18 KT) gold X (Weight in grams) + Making charges + GST at 3% on (Price of jewellery + making charges)

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