Renisha Chainani, Head of Research, Augmont Gold For All – highlights the 9 expectations from the budget for the Gold Industry. Please find below the same :
1. To make the Sovereign gold bond scheme more attractive, it is suggested that interest received on Sovereign gold bond is made tax free and no tax is levied on withdrawal before redemption of bond at maturity period.
2. The capital gains tax on sale of old gold should be withdrawn. This will channelize more old gold into the organised trade; jewellery shops and gold refineries, enabling the govt. to earn 3% GST revenue on gold purchased / sale as well.
3. Currently, there are no designated bullion banks in the country. The entire business transaction of the gold industry with the bank needs to be done through the bullion bank. Therefore, Bullion banks should be set up and these banks should be asked to maintain customer gold account in “Quantity” instead of “Rupee” account. This would help the government to reduce dependency on import.
4. IGST rate on job-work charges should be reduced from the current 18% for B2C and 5% for B2B transactions to 3%, at par with the IGST rate on sale of gold jewellery.
5. IGST input for sales of bullion made without the physical movement of goods should be permitted.
6. The GST rate on making handcrafted jewellery should be reduced to zero.
7. CTT should be reduced to zero as there is no fixed margin in bullion trade due to its international pricing mechanism.
8. It is essential that TDS on movement of bullion and TCS on sale of bullion is reduced from 0.1% to 0.01% so that working capital is not blocked.
9. The gems and jewellery sector should be exempted from the E-way Bill requirements, as it is important to recognise that there is a security threat to the life of the carrier.