While the Centre has given a digital boost for the gold sector, in terms of tax relief there is nothing for the sector, said an official of World Gold Council’s Indian Chapter.
“While the reduction in custom duty on gold from 12.5 per cent to 10 per cent is a step in the right direction, the hike in the Agriculture Infrastructure and Development Cess has brought the overall duty to 15 per cent, same as before,” Somasundaram P.R., Regional CEO, India at World Gold Council, said.
He said high taxes will impede efforts to make gold an asset class, particularly at a time when gold prices have risen globally. Moreover, the thriving grey market has diluted efforts to reduce cash transactions and penalizes organised and compliant players.
“On a positive note, the Budget also announced that the conversion of physical gold to Electronic Gold Receipt will not attract any capital gains. Thus, providing an overall digital boost to the industry and promoting investments in the electronic equivalent of gold. Directionally, this year’s Budget can be considered positive for the industry,” Somasundaram added.