A state finance ministerial panel has recommended that states be allowed to track intra-state movement of gold through generation of e-way bills under the Goods and Services Tax (GST) regime. States were, however, of the view that e-way bill generation for gold for inter-state transactions may be unfeasible given security and transportation issues, though an alternative mechanism to track transactions of gold and precious stones may be developed that may include a reverse charge on purchase of old gold or mandatory e-invoicing for jewellers.
“The conclusion was that whichever state wants to implement it intra-state, then it should implement it. We were agreeable on this point that if a particular state wants to have an e-way bill for gold, then it can be allowed for intra-state,” Bihar’s Deputy Chief Minister Sushil Kumar Modi said.
The Group of Ministers (GoM) on movement of gold and precious stones, which was formed in November 2019 and is headed by Kerala’s Finance Minister Thomas Isaac, met on Friday to discuss the issues related to the feasibility of e-way bill for transportation of gold and precious stones. It will place its report in the GST Council.
Modi also suggested an e-invoicing system for gold. “Some other mechanism to stop tax evasion has to be considered. It should be worked out. It was decided to further study the e-invoice proposal and it would be discussed further,” Modi said.
Also, it was proposed that concerns over smuggled gold which then gets sold as old gold could be resolved by levying a reverse charge on the purchase of old gold, which would create the liability of payment of tax on the buyer than the seller.
It is learnt that Kerala and Karnataka wanted e-way bill for inter-state movement of goods, but Gujarat and Bihar felt it was not practical and feasible. Gujarat also raised the issue of security and secrecy of the data on transportation of gold, to which an assurance was provided that the necessary changes in the rules would be made to allow only designated officers to deal with the data, an official said.
Under GST, e-way bills are required for inter-state transportation of goods valued over Rs 50,000. However, gold is exempted. Currently, e-way bills have a validity of one day for every 100 km.
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