Updates and details for Gst May Impact Gold Demand in Short Term:
The government is planning to roll out goods and services tax (GST) from July 1. Currently, taxes on gold jewellery stands at 12.2 per cent. This will be replaced with GST of 3 per cent, which will be on top of the import duty.
With goods and Service Tax (GST) coming into effect, India’s gold demand is likely to touch 650-750 tonne in 2017 and jump to 850-950 tonne in next three years, World Gold Council said.
The net impact of GST in the world’s largest gold consumer market will be “positive” even as there will be short-term challenges, affecting not only demand but also manufacturers/retailers’ working capital and the recycling business, the World Gold Council (WGC) said on 8th June, 2017.
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This should support India’s gold demand, the report added. In the short term, WGC said GST may be disruptive as the industry adjusts to the new tax regime. Manufacturers’ and retailers’ working capital could be tied up because of inter- state gold stock transfers. Small-scale artisans and retailers with varying degrees of tax compliance may struggle to adapt.
“GST can make the gold industry more transparent which, coupled with recent hallmarking legislation, should ensure gold buyers have confidence in the gold products they buy, rather than continuing to suffer from the gross level of under-carating they have previously endured,” it added.
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