Gold exports GST, Exports of gold from India fell 13 per cent in the first 11 months of the roll-out of the goods and services tax (GST) regime, according to the Gem & Jewellery Export Promotion Council (GJEPC), which attributed the decline to the new levy.
Gold exports GST, down 13%
Exports of gold from India fell 13 per cent in the first 11 months of the roll-out of the goods and services tax (GST) regime, according to the Gem & Jewellery Export Promotion Council (GJEPC), which attributed the decline to the new levy.
“The government has given relief to nominated agencies for not paying IGST (integrated GST) upfront on gold import on submission of bond,” said GJEPC chairman Pramod Agrawal.
“But 3 per cent GST still applies to exporters for procuring gold from nominated agencies. This is hampering gold jewellery exports from India.”
Apart from 3 per cent GST, levied from July 1, 2017, gold attracts 10 per cent import duty too, said Agrawal.
The 3 per cent GST has also led to a reduction in purchases by non-resident Indians (NRIs), according to jewellers.
“The NRI business is down more than 60 per cent since GST was rolled out. They are looking at other countries for purchasing gold as they are getting the yellow metal at a cheaper rate there than in India,” said Nitin Khandelwal, chairman, All India Gem and Jewellery Domestic Council.
Khandelwal also said the domestic consumption in the first quarter of the current financial year halved from a year ago.
“High value gold and diamond jewellery are witnessing a slow movement as there is liquidity crisis in the market. Moreover, since the sowing season is underway, demand from rural India is not very strong,” he said.
However, a reduction of GST on diamonds from 3 per cent to 0.25 per cent resulted in exports growth of cut and polished diamonds from India, said Agrawal.
India exports around $41 billion of gem and jewellery annually, which contributes 7 per cent to the country’s GDP and 15 per cent to its merchandise exports.
“GST will definitely have a positive impact in the long run and we hope that the government will expedite the refund processes as the industry is facing the issue of non-realisation of GST paid, which, in turn, is locking up working capital,” said Agrawal.
Meanwhile, the gold prices rose to a one-week high on Wednesday, rebounding from a seven-month low touched in the previous session, as a softer American dollar stoked demand for the yellow metal.
Spot gold was up 0.6 per cent to $1,260.06 an ounce after touching $1,261.10, a one-week high.
The yellow metal gained over $20 from Tuesday’s low of $1,237.32 an ounce, its weakest since December 12 last year.
US gold futures for August delivery were trading 0.6 per cent higher at $1,261.30 an ounce.
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