GST Council aims to address Gold Loophole; Threshold will Set upto Rs.2 Lakh for Carrying Gold:

GST Council aims to address Gold Loophole; Threshold will Set upto Rs.2 Lakh for Carrying Gold The GST Council meeting chaired by Union Finance Minister Smt. Nirmala Sitharaman is expected to finalize rules for merchants carrying gold and precious stones worth Rs.2 lakh or more. This will be done so that the states can track their movement and minimize leakages in tax collection. States will require GST-registered firms to disclose the movement of gold and precious stones worth Rs.2 lakh or any other threshold above this amount inside the state by issuing e-way bills or electronic permits before starting transport, according to the proposed guidelines. The Central Board of Indirect Taxes would explore rule modifications in central and state GST Rules in this respect during today's GST Council Meeting. A ministerial committee convened by Kerala finance minister K.N. Balagopal proposed allowing states to impose such a requirement. The final draft rules to be reviewed by the Council are likely to provide that if gold over the defined threshold is supplied to end consumers without GST registration, the seller will be responsible for obtaining the electronic authorization. The decision to monitor the movement of gold and precious stones comes in the context of illegal transactions and tax evasion involving these products. As part of attempts to formalise the economy, restrict the usage of cash, and create a financial trail, the central government has already set a maximum limit of 2 lakh on cash acceptance from a single individual in a single day, with some exceptions such as bank deposits, etc. The implementation of the e-way bill requirement for gold is also intended to aid in the creation of an audit trail, as the GST system uses e-way bill data to pre-fill a merchant's sales report. The use of e-way bills for intra-state gold and precious stone transit might assist state authorities in keeping a close eye on the movement of these commodities, and if any shipment of these things above the prescribed threshold is identified without e-way bills, they would be able to take action.