Indian Gold Jewellers Terribly Upset by GST Hike Angsts

SEATTLE (Scrap Monster): The gold jewellers in India raised apprehensions over the moves by the Central government to hike the Goods and Services Tax (GST) on gold in its upcoming Council meet.

According to them, any hike in GST rates on gold will have adverse impacts on the sales and profit margins of jewellery manufacturing and exporting companies. It must be noted that the entire industry is currently going through a rough patch, mainly on account of muted consumer demand due to high gold prices.

The Bullion Conclave, recently held in the South Indian city of Kochi, noted that the high gold import duty of 12.5% coupled with additional GST rate of 3% have had significant impact on the profitability of the bullion industry in the country. There are rumours that the government intends to hike the GST rate on gold to 5%, which in turn will land the industry in more troubles. Instead, the government should focus on effective and immediate actions to revive the industry demand and to boost consumer confidence.

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The Conclave urged various bullion organizations in the country to fix uniform gold rates. It also called for protection of businesses from adverse price movements by making effective use of futures and options contract on the commodity exchanges.

Meantime, the jewellery exporters welcomed the recent decision by the government to exempt 3% of Integrated GST (IGST) on gold sourced from nominated agencies, effective January 1, 2020.