Kerala’s Finance minister Thomas Issac on Friday said that a levy of 3 per cent GST on the sale of vintage gold has to be proposed to check tax evasion.
As the Group of ministers has concluded to develop the e-way bill for carrying the gold within the states while applying it to the interstate movement was not granted.
On every purchase along with transactions in the sale, an e-invoice is to be generated for gold and jewellery making it compulsory declared by the panel.
The Deputy Chief Minister of Bihar Sushil Modi has told that the group of a minister are free to decide whether the e-way bill has to be imposed on the intrastate movement of gold.
“It was decided that if any state wants to implement e-way bill 
Gujrat and Bihar felt that it was not feasible to have an e-way bill for the interstate movement of goods whereas Kerala and Karnataka agree on the same said, by Modi the holder of a financial portfolio.
The GoM including the ministers of Kerala, Bihar, Gujarat, Punjab, Karnataka and West Bengal, urge to study the feasibility for implementing the e-way bill for movement of gold and precious stones met through the video conferencing.
Issac said that under the reserve charge mechanism (RCM) the GoM has arrived in realising the sale of old gold including GST charge.
“It was decided that the sale of old gold will attract GST at 3 per cent under RCM. The officer’s committee will now work on the modalities,”
Issac added that this will have to be checked as Tax evasion because most of the gold smuggled is exchanged as the old jewellery for evading the GST.
The RCM allows the buyer to collect and deposit the GST with the government.
GoM has announced to start e-invoicing for traders involved in jewellery businesses which helps in tracking down the users of gold said Issac.
“The discussion was that the threshold for e-invoice should be at Rs 5 crore,”
In November 2019, the GST administration settled by the GoM sought to suggest the methods and processes for controlling tax evasion on gold.
The council will receive the final report of GoM. The GST authority announces the e-way bills that are needed for the interstate movement of goods whose value is over 50,000. But the gold is exempted.
If GST inspector will ask about the business as well as transporters then an electronic waybill system has to be produced before him.
The tax expert says that imposing GST on a reverse charge basis for procurements from non-registered people will assist in capturing the rampant tax evasion occurring in the jewellery trades.
“This step would also help limit the circulation of smuggled gold in India as the tax arbitrage for the black marketeers would fall by 3 percent of gross value,”.
