Good news for Gold trading sector. The government of India has rolled back from the Budget decision of charging extra 1% tax collection at the source which is known as TCS applicable on direct purchase of gold against cash that worth over Rs. 2 Lakhs. For jewelers and gold importers, it’s a great relief!
In the general budget, Government of India announced to implement a new tax of 1% on direct gold purchase over Rs. 2 lakhs. The main motive was to bring down the circulation of black money in the economy however the gold traders and jewelers bring another point against it. According to them, it eats out their business in lean seasons.
Going against this decision of imposing extra 1% tax on gold and diamond, jewelers across the country came on a street strike for 45 days.
The decision to roll back at least the TCS on gold purchases over Rs 2 lakh has been welcomed by the gold ad diamond industry. Instead, the TCS will be applicable for cash transactions over Rs 5 lakh as it was earlier, simply the new decision is canceled. And at last, the government rolled back the decision.
Bachhraj Bamalwa, Director, All India Gem & Jewellery Trade Federation (GJF) was quoted in a report by The Economic Times saying that the decision was a huge relief for those looking to buy wedding jewellery as Rs 2 lakh is a very small amount.
The demand of gold and diamond in India has been declining. At first the high price of the gold and diamond that put the chain on the buyers and then the 1% import duty which kept them at bay.