6th May 2017
GST is an indirect form of tax which can be enrolled in after few months with higher rates of Goods and Services Tax (GST) and complexity in implementing this, the consumption of gold in India this year can be reduced by 4% to 650 tonnes. Gold consumption last year was 675.5 tons.
In case the tax burden on gold is not less than 12%, then the prospects for coming out of the gray route will increase further. GST will be effective from 1 July 2017. According to the World Gold Council, in 2016, about 100-120 tonnes of gold came to India through gold smuggling.
World Gold Council Managing Director (India) declared that "There are some concerns about the GST being implemented from July 2017. Organized players have been widely welcomed to implement the GST because it is about increasing transparency and consumer value, but there are concerns about the level of tax.
In the case of turning towards transparency, the Gold Industry will emerge as a leader. GST with import duty should be less than the current level of 12 per cent. On the basis of these standards, we have kept 650 tonnes of gold on the lower side and 750 tonnes at higher side. Consumption will depend on how easy it is to shifting GST system.Gold demand in the first quarter of 2016 was 107.3 tonnes. However, in the first quarter of 2017, the global demand for gold has dropped by 18 percent compared to the same period last year. Total jewelery demand in the first quarter of 2017 rose by 16 percent to 92.3 tonnes compared to the same period last year.
At the same time, gold demand investment in the first quarter of 2017 rose by 14 percent to 31.2 tonnes. In the first quarter of this year, total 14.5 tonnes of gold was recycled in India, while 14 tons of gold was recycled during the same period last year.
2017 © Monetic Corp Consultants Private Limited - U74999DL2013PTC261819
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