Gold prices set to increase under GST

New Delhi: With the rollout of the Goods and Services Tax (GST) on July 1, gold prices are set to surge, as the Council on Saturday finalised a three percent tax on the same.

According to sources, in the 15th meeting of the GST council here, it was decided that a three percent tax will be chargeable on all gold items, as opposed to the current rate of two percent being levied on the same.

Meanwhile, the GST Council finalised the tax rates on five out of the six commodities that were excluded in the previous meeting.

According to sources, biscuits will be charged an 18 percent tax while a 12 percent tax has been levied on readymade garments. Also, cotton and textiles will be charged five percent under the new tax regime.

The council decided to levy five percent on footwear costing below Rs. 500, and 18 percent on those above Rs. 500, the sources said.

Furthermore, the council also fixed a 28 percent tax rate on beedi, adding that no cess is chargeable on the same.

The approval of amendments of the draft GST Rules and related forms are also on the agenda of the meeting, said an official release, adding that this is believed to be the last GST Council meeting before the rollout of the new tax regime from July 1.

Last month, the GST Council had put over 1,200 goods and 500 services in the four tax brackets of 5, 12, 18 and 28 per cent. It had also imposed cess over and above the peak rate of 28 per cent on demerit and luxury goods.

The GST is said to be India's biggest tax overhaul since independence in 1947. It will replace a slew of federal and state levies, transforming Asia's third largest economy into a single market.