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Vat on gold

sajid (Auditor) (214 Points)

30 October 2011

Now a days Gold prices are skyrocketing. The common people suffers the most. And the Govt also charging 1% VAT on Gold.

When we see in the General Markets, Govt is charging 5% and 14.5% VAT on most of the essential commodities.

Gold does not come under the Essential Commodities, but still Govt is charging only 1% of VAT on this. Why?

I like your comments on this issue, and how to Control the ever increasing the GOLD PRICES.

Please put forward your views and comments on this.

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6 Replies

CA Pallav Singhania (❤ Work Hard Party Harder ❤) (32427 Points)
Replied 30 October 2011

EK TOH AISE HI....CONSPICIOUS HAI GOLD,IF VAT SHOULD BE INCREASED ON GOLD,THEN PRICES WILL GO UP AND OVER THE LIMITS FROM THE REACH OF THE SOMEWHAT MIDDLE CLASS....

CA Harish Suwalka (Chartered Accountant ( Bhilwara )) (4125 Points)
Replied 30 October 2011

Gold is a way to absorb general peoples savings, which forms a mazor part of our economy, its more a investment option than a saleble article

3 Like

sajid (Auditor) (214 Points)
Replied 30 October 2011

Mr. Aryan & Mr. Harish, you are right, It is out of reach to middle and poor class people. That why I am asking, why Govt is not taking steps , control, regulate the retail market of Gold. As we all know that, Indian marriages are done on the base of Gold weight. As the Gold prices are skyrocketing, many marriages of middle and poor class people are stopped. So, I ask the Govt to increase the VAT rate to 14.5% to Gold, its impact definately will affect the Big Players. So, purchasing may go down. And the Govt must involve in the retail market of Gold through Banking. Like that Govt must sustain the poor people.

VJ (Student) (56 Points)
Replied 30 October 2011

if it is increased any further it will encourage people to evade taxes. People would rather bribe officials than to actually pay high VAT on Gold

2 Like

Vinay (Asst Finance Controller) (26 Points)
Replied 31 October 2011

One thing we need to understand is that Gold prices are driven by world market rates, but not within hands of any Governemnt. So, if Govt increases the VAT rate on gold, it further increases the cost of gold..but no way decreases the demand for the same.

Also, Gold is an investment tool against inflatin (ofcourse, which we dont see that correlation now!! thanks to unstable economies). But, India is the only country where Gold is treated as necessity and is used as jewellery but not investment. I seriously dont understand why marriages should be linked to Gold, which is globally just an investment tool. I strongly feel we Indians need to come out of these kinds of sentiments and think in a constructive way.

I am not asking people not to buy Gold, but to buy Gold as an investment but not for jewellery for marriages etc...

varghese.sariga@gmail.com (PROPORATOR) (29 Points)
Replied 01 November 2011

hai,

I would also appreciate if Gov insist on balance sheet of jewellary in profit with all advertisements , gifts are meet with the simple sale amount thy pay as compount tax,

it is not possible for people to deposit in bank for more than Rs 50000 with out pan card, but the back money people have can utilised to buy diamonds up to 5 lacks ,or gold .

if restrictions are made then the price of gold will fall down. Who will buy , taxation is not needed . insist on full bill with customer details.

even people spent on luxuary cars, hoatels etc

this money is not counted for per cap income i think.

Hope the prise slash.