Gold may lose sheen on govt’s plan to hike bullion GST rates

November 24, 2021

Singapore (Nov 24)  Jewellers fear the move will encourage black marketing and smuggling of the yellow metal

After lying low for long, jewellery sales have picked up in last two months with the fall in gold prices boosting wedding purchases and pent-up demand.

Spoke in the wheel

Tanya Rastogi, Director, Indian Bullion Jewellers Association, said the proposed move to hike in GST rate, if implemented, will encourage the parallel economy and hinder the recovery of long-suffering industry. As it is, India is one of the most expensive places to buy gold and the proposed hike in duty will make it even more expensive, she said.

Shrey Mehta, Director, Pooja Diamonds, said the move will definitely encourage unorganised gold trade and impact organised retailers who follow government norm to the core.

The jewellery industry is already undergoing a lot of transformations with policies such as Hallmark Unique Identification and it will now be burdened with GST hike, said Mehta.

Jewellery demand in the September quarter was up 58 per cent to 96 tonnes (61 tonnes) buoyed by lower prices and pent-up purchases, as per the World Gold Council data.

Jewellers were well prepared for sudden spike in demand as gold imports in the last three quarters of this year was much higher at 691 tonnes compared to the demand of 360 tonnes recorded in the same period.

After hovering around ₹46,200-46,600 per 10 grams in last month, gold prices have started moving up and touched ₹48,834 on Monday.


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