GST Council aims to close gold loophole
NEW DELHI : The GST Council is likely to finalize rules next week for transporting gold and precious stones worth ₹2 lakh or more by merchants so that states can monitor their movement and prevent leakages in tax collection, a person familiar with the development said. According to the proposed rules, states will be at liberty to mandate GST-registered entities to report the movement of gold and precious stones worth ₹2 lakh or any other threshold above this level, within the state, by way of generating e-way bills or electronic permits before starting transport.
At its meeting on Tuesday, the federal indirect tax body will consider the rule changes in central and state GST laws in this regard, said the person cited above, who spoke on condition of anonymity. The proposal to let states introduce such a requirement was made by a ministerial committee with Kerala finance minister K.N.
Balagopal as the convenor. The final draft rules to be considered by the Council are expected to say that where gold above the specified threshold is sold to final consumers without GST registration, the onus of raising the electronic permit will be on the seller.
The move to oversee the movement of gold and precious stones comes in the context of off-the-books transactions and tax evasion around these items. Already, the central government has put a maximum limit of ₹2 lakh on cash acceptance from a person in a single day, with some exceptions such as bank deposits etc., as part of efforts to formalize the economy, reduce the use of cash, and create a financial trail.
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