The Goods and Services Tax (GST) Council is expected to mull over, at its meeting next week, the suggestions to implement the e-way bill for the movement of gold and precious stones system within a state.

Citing an unnamed government official familiar with the matter, Business Standard reported that a group of ministers (GoM) headed by Kerala Finance Minister KN Balagopal has made a recommendation in this regard, and the report may be officially presented in the proposed GST Council meeting on June 28 and 29.

If the GST council puts its seal on the move, it would aid to track the movement of gold and could help in finding tax evasion and smuggling amid rising prices of the precious metal. The report has recommenced there should be a cap of Rs 2 lakh (the price of precious metals) for issuance of e-bills and states would be empowered to limit the amount above this minimum limit. The movement of goods under the GST regime requires the issuance of an e-way bill. Currently, e-bill is mandatory for all movement of goods valued above Rs 50,000.

The panel also suggested making e-invoicing mandatory for business-to-business transactions for taxpayers (supply of gold and precious gems) with an aggregate annual turnover of Rs 20 crore or more, the publication mentioned.

Further, these recommendations include levying GST on the basis of a reverse duty mechanism on the purchase of old gold by registered dealers and jewellers from unregistered persons, and the same may be referred to the fitment committee of GST.

The report has been prepared after taking into consideration the doubts expressed by several states regarding the security of gold and precious stones as well as of the persons carrying such deliveries in case the system is implemented.

It mentioned that only Part A (quantity and value of goods supplied) of the e-way bill would be needed to be filled in such a way that Part B (details of the transporter) would not be required to be filled.

If okayed, the modalities for generating such e-way bills for inter-state movement of gold and precious gems will be as suggested by the GST-Network. Once the states decide to implement the e-way bill, they have to hold discussions with the jurisdictional commissioners.

A high-level ministerial committee was constituted by the Council in 2019 to look into the possibility of implementing e-way bills for movement of precious metals or other goods and to suggest alternative ways to check tax evasion. The proposal was initially given by Kerala which indicated a sharp dip in revenue from the sale of precious metals after the introduction of GST.

The GoM is believed to have examined data on revenue collection, import, export, consumption, price trends and estimates of gold smuggling from various sources.