FG REQUESTS 3% IGST FOR GOLD IMPORTATION
The Federal government of Nigeria has said that the banks that imports gold and precious metals will start paying a 3 percentage fee to Goods and Services Tax (GST) which can be claimed as input tax credit.
In a bid to clarify issues on GST on gems and jewelry through Frequently Asked Questions (FAQs), the Central Board of Excise and Customs (CBEC) said banks did not pay any VAT on import of precious metals previously. They only settled customs duty.
It has also been said that the Import of gold attracts a 10 per cent basic customs duty, following the fact that a 12.5 per cent countervailing duty (CVD) was levied prior to GST.
However, in the GST, "3 per cent Integrated-GST is payable on all imports of precious metals in addition to the basic customs duty, as the IGST paid can be taken as input tax credit by the banks."
The CBEC also said that banks would be liable to pay IGST on such import duties and not any overseas supplier in which ownership is vested during movement of gold or silver.
Following the statement of the FAQ, "Ownership is not the material for determining if an import has taken place or not. Banks, as registered entities, would be liable to pay IGST on such imports but not the overseas entities, because they are not affecting the import," she said.
The CBEC also added her statement on the levy of GST where the total value of a gold ornament is Rs 30,000, including Rs 2,000 as making charge. In her words, "GST is payable at the rate of 3 per cent of the total transaction value of jewellery, whether the making charge is shown separately or not".
It was also said that since GST subsumed CVD, hence the GST rate on gold at 3 per cent ought to be paid at the time of imports in the form of IGST with effect from July 1.