Tax hike to affect India's short term Gold demand
Time:Fri, 07 Jul 2017 03:53:24 +0800
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With India using Gold from investing to wedding gifts etc, which makes then one of the biggest Gold consuming nation. Now the India is fearing a short term demand pressure on the back of increased sales tax on the commodity, as per the World Gold Council (WGC).
“In the short-term at least, we believe the tax may pose challenges for the industry. Small-scale artisans and retailers with varying degrees of tax compliance may struggle to adapt,”, the WGC quoted.
With the introduction of Goods and Service Tax (GST) in India from July 1, the tax on Gold has increased to 3 percent from the current 1.2 percent. WGC also stated that, the governments plan to ban cash transactions over Rs 200000 will make impact on the rural customers as they are have limited access to cheques and digital payment.
The rural areas contributes about two third of India's total Gold demand, as in rural areas jewelry is a traditional store of wealth. The Gold demand in India during 2017 was estimated at 650 to 750 tons against the last five year's average annual demand of 846 tons.
