While buying gold it is important to ensure two things, first, the article should be hallmarked, and second do not forget to get the GST receipt for your purchase. The purity of gold sold has always been of concern for household consumers in India. The receipt you obtain from your jeweller works as a piece of important evidence in case disputes arise in the future. As per a recent survey by Local Circles, around 14 per cent of those who purchased gold jewellery in the last 12 months did not take receipt of their purchase as they gave payment in cash or wanted to avoid GST. Consumers who avoid taking a GST receipt will miss out on getting redressal possibilities in case the jewellery they purchased turns out to be of inferior quality than what they paid for.
Two types of taxes are applicable on the gold purchase:
- A fixed 3 per cent GST is applied based on the weight of the gold article
- 5 per cent GST is applied regarding the labour cost involved in crafting the jewellery
The survey asked if individuals received a GST receipt when buying gold jewellery in the last 12 months, wherein 86 per cent said yes. This is a good sign of consumer awareness as receipts help the government track taxes paid.
14 per cent of people did not receive a receipt, seeing payment in cash to avoid taxes. Doing this eliminates the record of the purchase. Some consumers try to avoid paying GST altogether by paying in cash, but this is an illegal practice.
Here’s why you should not skip the GST receipt:
Receipts serve as written proof of purchase in case of any issues arise with the jewelry's quality or authenticity. Skipping the same can create problems for the consumers later.
Consumers would find it difficult to prove the quality or authenticity of the jewelry at the hour of need such as in the cases of refund or exchange.
Moreover, receipts are needed for seeking redressal (compensation or resolving the issue) if the jewellery turns out differently than promised.
The survey noted that consumers need to be educated more about the costs involved in hallmarking and regarding the no extra charges. “Without this information, many consumers may continue to flock to their ‘reliable’ goldsmith to buy gold jewellery sans hallmark. Some of the local goldsmiths may not even be registered, and outside the GST purview,” Local Circles stated in a note.
The survey also noted that despite the government’s efforts to protect the consumers and spread awareness, only 64 per cent of those who bought gold jewellery in the past year bought hallmarked articles.
As per the Bureau of Indian Standards website:
- It is necessary to have details of hallmarked articles in the bill/invoice issued by jeweller/retailer
- Description of each article, net weight of precious metal, purity in carat and fineness
- Hallmarking charges need to be mentioned in the bill or invoice of sale of hallmarked precious metal articles
BIS also noted that the consumer can get the purity of the hallmarked jewellery/artefacts verified from any of the BIS-recognised Assaying & Hallmarking (A&H) centres.
