Given tax evasion and smuggling of gold, the GST Council in November 2019 created a group of ministers to examine if implementing the e-way bill mechanism for gold and precious stones is feasible. GST on gold is levied at 3% while precious stones and diamonds are taxed at 0.25%-3% .
Under the goods and services tax regime, e-way bills are required for transportation of goods valued over Rs 50,000. However, gold is exempted.
The group of ministers (GoM), comprising finance ministers of Kerala, Bihar, Gujarat, Punjab, Karnataka and West Bengal, set up to examine feasibility of implementation of e-way bill for movement of gold and precious stones met via video conferencing on Friday.
Based upon the discussions the GoM suggested that States can make e-way bill mandatory for transportation of gold within the respective states but implementing it for inter-state movement across India will not be feasible.
“It was decided that if any state wants to implement e-way bill for gold, they can do so for intra- or within the state transportation,” Bihar deputy chief minister Sushil Modi told PTI.
During the meeting, while Kerala and Karnataka wanted e-way bill for inter-state movement of goods, Gujarat and Bihar felt it was not practical and feasible. E-way bill generation for inter-state movement of gold and precious stones may lead to security concerns as such consignments would be tracked, according to a government official.
Modi, who also holds Bihar’s finance portfolio, also suggested e-invoicing for gold.
“It was decided to further study starting e-invoice for gold to tackle evasion and the proposal would be discussed further,” Modi said.
The final report of the GoM would be placed before the Council.
The legal changes required to make e-way bill generation compulsory for intra-state movement of gold, and a monetary threshold for gold will be worked out by the officials of Department of Revenue, Modi said. The proposal will then be taken to the GST Council for its final approval.
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