KOCHI: The overall tax on gold jewellery, which comes to 12.5 per cent, is counter productive as it is tax on savings, says the World Gold Council (WGC).
According to WGC Managing Director-India P R Somasundaram, though the current debate is on the one per cent excise duty on gold jewellery introduced in the recent Budget, actual discussion should be the total taxation (import duty, excise duty and VAT) of 12.5 per cent on the yellow metal. “People in the country consider gold as savings and it should not be taxed,” he said.
Somasundaram was speaking to a select group of journalists here on Friday.
He said that the gold market in India is worth $35 billion, out of which 75 per cent is jewellery and the rest is investment demand, ie, bars, coins and ETF. India imported 848 tonnes of gold in 2015, up from 827 tonnes in 2014.
Batting for a gold policy for India, Somasundaram said that quality improvement and transparency in pricing are the two major challenges in the gold industry now.
On introducing gold tourism as a unique method to popularise handcrafted Indian jewellery, Somasundaram suggested that there should be a system to display antique gold jewellery of various temples to domestic as well as foreign tourists.
“India is the capital of handcrafted jewellery, while rest of the world use machinery to make ornaments. Hence, this kind of gold tourism has greater scope in the country.”
On the Gold Monetisation Scheme, he said, “The scheme needs time to pick up in a big way. Now, it is being implemented through Metals and Minerals Trading Corporation of India outlets and 10 branches of Indian Overseas Bank. More banks need to be prepared for the scheme.”
It is estimated that Indian households have 24,000 tonnes of gold under their custody. Through the monetisation scheme at least 200 tonnes of gold should be channelised into the economic system of the country, Somasundaram said.
In its Vision 2020, WGC has suggested promotion of a gold tourism circuit to showcase handcrafted Indian jewellery.
Leading centres of handcrafted jewellery such as Kolkata, Jaipur, Ahmedabad, Surat and Coimbatore could be promoted as part of the gold tourism circuit.
“The one dollar spent on gold is better than the same amount on electronic gadgets as investment on gold will generate jobs and increase savings. Now gold is being explained by foreign analysts in a very complex manner, India needs to develop a gold language of its own,” said Somasundaram.
Temples, trusts deposit 1,512 kg gold under GMS
New Delhi: Under the Gold Monetisation Scheme (GMS), banks have collected approximately 1,512 kg of gold from temples and trusts since its launch last November, Minister of State for Finance Jayant Sinha said in the Lok Sabha on Friday. Besides, there is a considerable reduction in the quantum of gold imports during the last six months as compared to gold imports during 2014-15, he said. Sinha further said, MUDRA Ltd is a refinance agency with its registered office in Mumbai and it has no offices elsewhere. As on March 31, Rs 3,287 crore has been refinanced by MUDRA to micro finance institutions, public sector banks and regional rural banks.