Impact of GST on Retail Jewellery Industry

Jewellery sector plays an important role in Indian economy and a major contributor of countries GDP.  Currently the Central government has given various fiscal incentives so as to boost the growth of the sector. Taxes levied by the state government are very low and usually don’t exceed 2%. As proposed in the GST regime, the state taxes on the gem and jewellery sector are likely to go up to 2–5 % thereby bringing a significant increase in the rate structure burdening the companies associated. Currently, transactions during testing, certification etc. are not taxed, but after implementation of GST, they will have to pay tax, this would lead to valuation issues and requirement of high working capital for the retailers. Implementation of GST will bring all the unorganized players into the tax net and make the sector more organised. Customers will be ultimately benefited from the GST, as it is a single tax method on the supply of goods and services, right from the manufacture to the supplier. Customer will have to bear the GST charged by last dealer in the supply chain. It avoids multiple taxes and brings all the players into the tax bracket, so the industry become more organised and customers can expect uniformity in the price structure.