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Tax Ruling on Gold Services: Classification, Rates & Thresholds The applicant sought an advance ruling on tax liability for various services related to gold ornaments. Quality testing and certification services are ...
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Tax Ruling on Gold Services: Classification, Rates & Thresholds
The applicant sought an advance ruling on tax liability for various services related to gold ornaments. Quality testing and certification services are classified under Service Classification Code 998346, attracting an 18% GST rate. Testing and appraisal services, including certifying goldsmith works, also fall under the same code with an 18% GST rate. Gold maintenance and repair works are considered Jewellery Manufacturing Services under Code 998892, with a 5% GST rate for registered persons and 18% for unregistered persons. Job works below a turnover of Rs. 19 lakhs per annum would not incur tax liability under GST laws.
Issues: - Tax liability and rate for quality testing and certification of gold ornaments - Tax liability for testing and appraisal of gold ornaments - Tax liability for gold maintenance and repair works - Tax liability for printing emblems or embossing on ornaments - Tax liability for cutting, shaping, and converting gold ornaments - Tax liability for job works below a certain turnover threshold
Analysis: - The applicant sought an advance ruling on the tax liability and rate for quality testing and certification of gold ornaments. The services provided fall under Service Classification Code 998346 for technical testing and analysis services. The applicable GST rate for this service is 18% as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
- Regarding the testing and appraisal of gold ornaments, which includes certifying the grade of goldsmith works, the services are also classified under SAC 998346. The GST rate applicable remains at 18% as per the same notification.
- Gold maintenance and repair works, such as enlarging gold chains or cutting and polishing gold ornaments, are considered part of Jewellery Manufacturing Services under Service Classification Code 998892. The GST rate for such manufacturing services on goods owned by others is 5% if undertaken for registered persons and 18% if done for unregistered persons, as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
- The activity of printing emblems or embossing on ornaments, as well as cutting, shaping, sizing, and converting gold ornaments into coins or biscuits, also falls under Jewellery Manufacturing Services (998892). The applicable GST rates remain the same as mentioned above.
- Lastly, the question of tax liability for job works below a certain turnover threshold was addressed. As per Section 22 of the CGST/SGST Act, 2017, a supplier of services is required to obtain registration only if the aggregate turnover exceeds the threshold limit of Rs. 20 lakhs. Therefore, if the total turnover of the applicant is below Rs. 19 lakhs per annum, there would be no tax liability under GST laws.
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