Author Topic: Impact of GST on Coin Collecting in India  (Read 77 times)

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Offline Bimat

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Impact of GST on Coin Collecting in India
« on: February 14, 2017, 04:43:37 PM »
As many of you are aware, government of India intends to implement GST starting this July, or latest by October 2017. Out of the four tax slabs proposed by the GST council, numismatic items will be coming under 18% tax slab (of course, applies only to those items which are sold with receipt). Many collectors believe that this rate is excessively high and some senior numismatists have already written to the government not to charge any tax (i.e. 0% tax) on numismatic items. No decision has been taken by the government yet.

Not sure if government will take this request very seriously, as only a fraction of the numismatic dealings are 'legal' and rest all are in cash/other forms. To me, such particular request, in fact, may attract government's attention towards the field and some strict measures may not be ruled out.

Will update further when we have more clarity on the subject.

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.

Offline Abhay

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Re: Impact of GST on Coin Collecting in India
« Reply #1 on: February 14, 2017, 05:07:24 PM »
We all have to understand how this rate of 18% is arrived at. Basically, in the present system, there are two principal taxes - Excise Duty and the Sales Tax. The Excise is charged by the Central Govt. while Sales Tax (or VAT) is charged by the State Govt. On most of the items, the Excise is 12.5% and the VAT is 5%. So the total comes to 17.5%, which is proposed as 18% under GST. The Excise Duty is always charged on the MANUFACTURING of an item, while the VAT or Sales Tax is charged on the SALE of an item. Now the point in our (NUMISMATISTS or COIN COLLECTORS) favour is that the ancient coins are not MANUFACTURED now, and hence are not liable for the payment of Excise Duty part. Yes, for the coins being sold by the Mints, this theory will not apply, and there the rate of 18% GST can be justified.

Abhay
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Offline Bimat

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Impact of GST on Coin Collecting in India
« Reply #2 on: February 14, 2017, 05:12:50 PM »
We all have to understand how this rate of 18% is arrived at. Basically, in the present system, there are two principal taxes - Excise Duty and the Sales Tax. The Excise is charged by the Central Govt. while Sales Tax (or VAT) is charged by the State Govt. On most of the items, the Excise is 12.5% and the VAT is 5%. So the total comes to 17.5%, which is proposed as 18% under GST. The Excise Duty is always charged on the MANUFACTURING of an item, while the VAT or Sales Tax is charged on the SALE of an item. Now the point in our (NUMISMATISTS or COIN COLLECTORS) favour is that the ancient coins are not MANUFACTURED now, and hence are not liable for the payment of Excise Duty part. Yes, for the coins being sold by the Mints, this theory will not apply, and there the rate of 18% GST can be justified.

Thanks for the inputs, Abhay. I do agree that it's difficult to exempt numismatic items from GST. If they exempt currency, then there will be demand to exempt other historically important things like paintings, watches (yes, there's a market for these) etc. too. My personal opinion is that coins (or any collectibles in general) should not be excluded from the tax slab, but they can definitely put them in lower tax slab. :)

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.

Offline quaziright

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Re: Impact of GST on Coin Collecting in India
« Reply #3 on: February 14, 2017, 05:24:00 PM »
I imagine the auction houses will pass these on to their clients and NGC and others like them will do similar things too. Otherwise I don't see this impacting most collectors. Even out west, its all mostly cash without any receipts

Offline Bimat

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Impact of GST on Coin Collecting in India
« Reply #4 on: February 15, 2017, 04:35:50 AM »
I imagine the auction houses will pass these on to their clients and NGC and others like them will do similar things too. Otherwise I don't see this impacting most collectors. Even out west, its all mostly cash without any receipts

Since GST is going to be applicable on online auctions as well, it will have impact on sellers/buyers who buy regularly through e-commerce websites like eBay. There's still not much clarity regarding overall GST (it was supposed to be implemented from April 2017, but got delayed due to demonetization), so we will have to wait until government publishes final draft of the bill. Quite a few states have expressed concerns over some of the provisions in the current draft and it may not be easy for the government to find a reasonable solution...

Aditya
Caution. The low-hanging fruits are still there maybe for a reason.