Trade Council Demands Sharp Reduction in Gold Import Duty

SEATTLE (Scrap Monster):  The All India Gem & Jewellery Domestic Council (GJC) - the national trade federation for the promotion and growth of trade in gems and jewellery across India, has urged the government to lower the duty on legal gold imports into the country. This would check smuggling in a big way, the GJC noted. The Council has demanded reduction of gold import duty from present 10% down to 4%.

According to Shankar Sen, Vice Chairman, GJC, it has sent its recommendations to the Ministry of Finance ahead of the Union Budget for fiscal 2019-’20, which is due to be presented on 5^th July. Though the lower duty structure is feared to result in loss of government revenue, it can easily be compensated by anticipated drop in smuggling activities. Incidentally, the hefty duty on legal imports encourages people to smuggle gold into the country through illegal, unofficial routes.

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Currently, the country’s central bank does not allow EMI purchases of gold jewellery, as it considers the yellow metal as an asset class. The Council has requested the Ministry to lift this restriction, thereby allowing customers to purchase gold by bay of phased payments.

The Council also urged the Central government to revamp the existing Gold Monetization Scheme (GMS) in order to ensure more investor participation. The jewelers must be allowed to operate as agents of bank, allowing them to collect gold from customers on their behalf. This will simplify the entire process of opening gold deposit account, which in turn will ensure liquidation of idle gold holdings.