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GEMS & JEWELLERY INDUSTRY UNDER GST REGIME (PART-1)

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 21-1-2017 - Prologue The Gems and Jewellery sector play a significant role in the Indian economy, contributing to over 5 % of the country s GDP. As one of the fastest growing sectors, it is highly export- oriented and labour intensive. Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as one of the focus area for export promotion. India is considered to be the .....

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rate compliance obligations and tax cascading. The proposed GST regime is expected to simplify the indirect tax regime as it would subsume most of the indirect tax laws and hence is to be considered as a major tax reform. The proposed GST regime shall subsume various Central and State level taxes and the model GST law will include a Central GST, and SGST for intra-State supplies and IGST for inter-State supplies. Gems and jewellery items are likely to be covered under the ambit of GST and provis .....

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on input services is eligible), or 12.5% with Cenvat credit of inputs, input services, and capital goods. VAT is levied at the rate of 1% or different rates (may vary from State to State) for sale in India. Under the model GST law, lowest approved GST rate is proposed to be 5%. If gems and jewellery item will be classified under the lowest tax slab, then this will become a major concern for this sector paying excise duty @1%. As a result they may have to pay CGST/SGST @5% instead of what they a .....

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a person who is registered or liable to be registered under Schedule-V of the Act. Accordingly, every supplier shall be liable to be registered under the Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds rupees 10 lakhs in the North-East States including Sikkim and hilly areas and rupees 20 lakhs for other States. Therefore, threshold limits of rupees 20/10 lakhs available for registration under GST. A person can .....

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on own or through job worker) cleared domestically has not crossed ₹ 1.5 crores. (all goods manufactured including silver jewellery). Under GST regime, the threshold limit of ₹ 10/20 lakhs is provided for payment of GST. Since, under GST regime limit of threshold exemption will be reduced to ₹ 10/20 lakhs, it will adversely affect the manufacturers. Shift in Taxable base from Service/Manufacturing/Sale to Supply In service tax law, rendering of service is a taxable event for le .....

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have been specified in schedule I, which shall be considered as a supply even if made without consideration. Accordingly, supply includes all forms of supply of goods/or services such as sale, barter, exchange, transfer, lease, rental, license or disposal made or agreed to be made. This implies that supply includes everything, even if a person sale his business assets then GST would be attracted. Although, all forms of supply for a consideration would be covered under GST but if supply is betwee .....

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ration, then such supply would also be covered under supply. Time of Supply of Goods and/or Services CGST/SGST/IGST shall be payable at the earliest of the following dates, namely: the date of issue of invoice by the supplier or the last date on which he is required to issue the invoice with respect to the supply; or the date on which the supplier receives the payment with respect to the supply. Valuation Transaction value shall be considered for payment of tax, with various inclusions prescribe .....

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