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28% GST on firearms leading to black money transactions; shooters, dealers demand revision

Gun owners’ forums have been demanding that ban on import of firearms for civilians should be lifted. The ban was imposed in 1984, when the custom duty to import guns was 200%.

kolkata Updated: Nov 18, 2017 18:08 IST
Tanmay Chatterjee
Tanmay Chatterjee
Hindustan Times
GST,firearms,Indian Arms Act
High GST on firearms has led to rampant under invoicing of sale of second hand foreign weapons that sell at sky-high price. (Wikipedia)

Shooting club members, private gun owners and dealers in different states have asked the government to either lift or revise the 28 % GST imposed on revolvers and pistols and 18 % GST on rifles, shotguns and air rifles. The rate is same for new and second hand weapon sale.

The high tax was leading to under invoicing of the sale leading to revenue loss to the government and also generation of black money, they claim. Earlier, the rate of sales tax was 18 % on firearms of all categories and only 5 % on air rifles.

“Last month I paid Rs 2.5 lakh for a Webley and Scott revolver made in the 1930s. That is its going market rate. The gun shop owner however prepared a bill for Rs 40,000. Who would pay 28 % GST on Rs 2.5 lakh for an 80-year-old revolver?” said a south Kolkata based businessman requesting anonymity. “A friend of mine bought a Walther PPK, the famous James Bond gun, for a whopping Rs 14 lakh. Please don’t ask what the billing amount was,” he quipped.

Read: DRI step up search for Prasant Bishnoi, following paper trails leading to smuggled firearms

The .32 bore revolver made by the Indian Ordnance Factory (IOF) has a close resemblance to the Webley and a fresh piece retails for around Rs 92,000 inclusive of 28 % GST. The same revolver sells for approximately half the price in the second hand market but under invoicing is common.

“Such steep GST rates will obviously make people reluctant to pay. No GST should be charged on old guns and rates for new IOF weapons should be revised as well,” said Biswajit Biswas, owner of D N Biswas and Co, one of the oldest gun shops in Bengal.

Interestingly, the government said in July that second hand goods would not attract GST if the transaction amount was lower than the original price of the product.

Dealers have raised these issues several times and gun owners’ forums have been demanding that ban on import for civilians should be lifted. The ban was imposed in 1984, when the custom duty to import guns was 200%.

Among civilians, only top competitive shooters can import firearms. These imports were given full exemption by the GST Council a few days ago.

Read: Semi-automatic military weapons made in the US, Germany seized from Ram Rahim’s dera

Abhijeet Singh, founder-member of National Association for Gun Rights India (NAGRI), said alternatively the government can allow foreign manufacturers to set up plants under the ‘Make in India’ initiative.

“How can the same GST rates be imposed on old guns that change hands over and over again?” said Ravi Ahuja, general secretary, Chandigarh Arms Dealers Association. More than half of the licence holders in India own old weapons of foreign or Indian origin, he said.

As per government figures of December 2016, there were 33.69,444 gun licences in the country. Many of these licensees own multiple weapons against one licence. With 12.77 lakh licences, Uttar Pradesh has the highest number of civilians authorised to carry firearms. Jammu and Kashmir comes second with 3.69 lakh firearm owners.

First Published: Nov 18, 2017 18:08 IST