The Kerala Jewellers Association is advocating for a standardized gold tax rate of 1.25% under the Goods and Services Tax (GST) system. They believe that this uniform rate will simplify the current complex taxation structure and eliminate the additional purchase taxes that currently burden gold buyers in the state.

A uniform gold tax rate is essential to streamline the gold taxation process in Kerala, where multiple layers of taxes can create confusion and lead to higher costs for consumers. Currently, different states have varying tax rates, contributing to disparities in pricing and regulatory burdens. A standardized rate would provide clarity and fairness across the market, benefiting both consumers and businesses.

The current gold taxation system in Kerala adds complexity and potentially higher costs for consumers. With a VAT of 5% on gold jewellery, coupled with other purchase taxes, buyers may face inflated prices. The call for a simplified GST system aims to reduce this financial burden, making gold more accessible to consumers while promoting transparency in transactions.

Jewellers in Kerala are concerned about the potential for multiple layers of taxation with the postponed GST implementation. They fear that without a clear and simplified tax structure, compliance could become cumbersome and costly. The Kerala Jewellers Association, along with other industry bodies, is advocating for a fixed tax rate of 1.25% to avoid confusion and ensure fair pricing in the market.

To prepare for GST compliance, businesses should take several important steps. First, ensure that your business is registered in the GST system without delay. Next, plan your logistics and warehousing needs in relation to the new tax framework to avoid disruptions. Lastly, consider adopting technology solutions that facilitate seamless GST compliance, making it easier to manage tax obligations and maintain accurate records.

The GST council meeting scheduled for February 18 is crucial for determining the future of gold taxation in Kerala. There are discussions around establishing a tax rate of 4% on gold, which may help address revenue shortfalls while simplifying the tax structure. The outcomes of this meeting will significantly influence the final decision on gold taxation, affecting both jewellers and consumers in the state.

Kerala's gold taxation differs from other states due to its higher VAT rate of 5%, which has resulted in significant annual tax revenues. In contrast, states like Tamil Nadu have lower VAT rates but still manage to collect substantial revenues. This inconsistency highlights the need for a uniform tax rate under GST to ensure fairness and efficiency across the jewellery market in India.

Minister Thomas Isaac plays a key role in the discussions about gold taxation in Kerala as a member of the GST council of state ministers. He has shown support for addressing the concerns raised by the Kerala Jewellers Association and is involved in discussions to determine an appropriate tax rate. His position indicates a willingness to consider the industry's feedback and work towards a solution that balances revenue needs with market fairness.