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Monday May 16, 2022

‘Gold prices to hit Rs150,000/tola after 17pc GST’

"It is a disastrous decision for the jewellery business," says a gold trader

January 21, 2022
A representative image of gold jwewllery.
A representative image of gold jwewllery. 

KARACHI: Imposition of 17 percent sales tax on gold jewellery in the minibudget would push the price of the precious metal to cross Rs150,000 per tola, said Pakistan Gems Jewellery Traders and Exporters Association (PGJTEA) on Thursday, proposing the government to tax ‘jewellery making’ rather than on complete final product.

“It is a disastrous decision for the jewellery business,” said PGJTEA chairman Akhtar Tesori, adding, "we reject this 17 percent new tax on gold and silver jewellery."

Tesori said it would hurt gems, fearing that jewellery businesses would be ruined and the poor and middle-income group persons, who buy small ornaments for their daughters' weddings, would no longer be able to buy it for their once-in-a-lifetime events.

He added that the demand of the precious metal would reduce, which would turn into lesser demand of labour, eventually loss of jobs of the people associated to the industry.

Kashif Siddiqui, a jeweller in Karachi, said the government should pave the way to increase the number of tax payers in the gold industry rather than twisting arms of those who pay.

According to the Federal Board of Revenue (FBR), the gold economy size in the country is Rs2.2 trillion and around 160 tonnes of gold are consumed annually. However, according to the board, only Rs29bln gold market is declared and only 54 goldsmiths pay income tax out of 36,000 registered.

Earlier, the Senate Standing Committee on Finance and Revenue has also rejected the proposed 17pc sales tax on articles of jewellery or parts of the precious metal from the existing 1.5pc value of gold and 2pc value of diamond plus 3pc of making charges in a meeting held on January 7, 2022.

Akhtar Tesori urged PM Imran Khan and Finance Minister Shaukat Tareen to impose a tax on the making of gold and silver jewellery instead of imposing a tax on a final product. It would hurt the business of those jewellers who were already paying taxes, he added. He shared that the value of gold remains untaxed when it comes to jewellery worldwide and the cost jewellers charge for making of ornaments and jewellery gets taxed.

Comments

    Owais commented 4 months ago

    A good step by govt to include this sector in tax regime.This sector of business is neither documented nor formal. FBR should install POS devices to monitor their sales

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