Gold is one of the most valuable metals known to humankind, and it can be used for multiple purposes. Besides, making jewellery, gold is also commonly used to avail funds during a financial crunch.
Thus, it is vital to measure the purity of gold to make the most of its equity. Following are some of the ways.
It constitutes one of the most common ways to determine the quality and purity of gold. Denoted by “K”, this measurement system depends on a scale that ranges from 0 to 24. For instance, a god article of 1 Karat means that that particular gold item consists of 1 part of gold and 23 parts of other metals or alloys. It also means, the closer to 24K, the purer the gold.
Most gold articles, including jewellery, come with an inscription called “hallmark” that carries the symbol of gold purity, its fineness, date of manufacturing, etc. Most countries, including India, have mandated gold jewellers to carry the BIS hallmark.
Besides these, most traders use conventional acid test or use an electronic gold tester to determine gold purity accurately.
Irrespective of the method, assessing gold purity is essential for both buyers and traders.
Gold has always been one of the most significant investment options for Indians. The high liquidity of gold and its consistent value makes it a popular option for investment purposes. It also acts as a hedge against fluctuations in the market. Gold can either be pledged in the form of a gold loan or it can be sold to meet urgent financial deficits. It pays to be aware of the value of gold to prevent unscrupulous activities by the lenders or jewelers. It is not very complicated to calculate the value of the gold. The weight and the purity of the gold will have to be tested at an assaying laboratory. There are two methods to calculate the purity of the gold. It can be denoted in percentage or in karat.
Goods and Services Tax has unified the earlier payable taxes like Value Added Tax (VAT), Customs duty, Central Excise duty, etc., and the whole indirect tax structure has been brought under one umbrella.
GST on gold is levied when individuals opt for buying gold jewellery or bars. Individuals need to pay several taxes depending on the various processes involved in gold trading, manufacturing, and purchasing. To be precise, individuals need to pay GST of 5% on making charges, 10% on import duty and 3% on gold. However, the GST on making charges is a product of the new tax regime.
The new tax structure and implementation of several taxes have made gold expensive by 0.75%. Apart from the impact on gold prices, GST has stretched its effects on gold imports as well as across the organised and unorganised sectors, which are invariably linked with the increasing price of gold.
'Karat' represents the proportion of gold present in an alloy. It indicates the fineness of gold, which implies that the higher the karat, the more the purity of gold.
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