Home World Business India gold demand seen muted as jewellers fear GST roll out: WGC

India gold demand seen muted as jewellers fear GST roll out: WGC

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The WGC kept its forecast for India’s full-year demand at 650 tonnes to 750 tonnes

Reuters  |  MUMBAI  May 4, 2017 Last Updated at 10:27 IST

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  demand in could be muted in the second half of 2017, as the rollout of the new Goods and Services (GST) from July is expected to dent appetite in the world’s second-biggest consumer, the World Council (WGC) said on Thursday.

But sales are likely to be robust during the first six months of the year, the said.

consumption in the first quarter of 2017 rose 15 percent to 123.5 tonnes on pent-up demand from jewellers as retail consumers ramped up purchases for weddings, the said in a report published on Thursday.

The kept its forecast for India’s full-year demand at 650 tonnes to 750 tonnes, lower than a 10-year average of 845 tonnes, but just above last year’s level.

In 2016, demand fell 22 percent from a year earlier to 666.1 tonnes, the lowest in seven years.

“With the implementation of GST, we are expecting some kind of disruption in demand in the second half,” Somasundaram PR, Managing Director of WGC’s operation, told Reuters referring to a Goods and Services (GST) that will be implemented from July 1.

The long-awaited is hailed as India’s biggest overhaul since independence in 1947. The will replace a slew of federal and state levies, transforming Asia’s third largest economy into a single market for the first time.

But small jewellers, who account for nearly two-thirds of the industry, could face operational issues in transitioning to the GST, Somasundaram said.

is a mainstay of Indian culture, serving as the primary vehicle for household saving for hundreds of millions of people.

The government of Prime Minister Narendra Modi has tried to curb costly bullion imports and put restrictions on cash transactions.

Indians buy more than two-thirds of with cash.

To cut down unofficial trading, under the GST, should be taxed substantially lower than the existing duty of 12 percent, Somasundaram said.

The has estimated that 100-120 tonnes of smuggled entered in 2016. Smuggling has surged since raised the import duty on to 10 percent in 2013 to narrow a gaping current account deficit.

 

 

India gold demand seen muted as jewellers fear GST roll out: WGC

The WGC kept its forecast for India’s full-year demand at 650 tonnes to 750 tonnes

The WGC kept its forecast for India’s full-year demand at 650 tonnes to 750 tonnes

  demand in could be muted in the second half of 2017, as the rollout of the new Goods and Services (GST) from July is expected to dent appetite in the world’s second-biggest consumer, the World Council (WGC) said on Thursday.

But sales are likely to be robust during the first six months of the year, the said.

consumption in the first quarter of 2017 rose 15 percent to 123.5 tonnes on pent-up demand from jewellers as retail consumers ramped up purchases for weddings, the said in a report published on Thursday.

The kept its forecast for India’s full-year demand at 650 tonnes to 750 tonnes, lower than a 10-year average of 845 tonnes, but just above last year’s level.

In 2016, demand fell 22 percent from a year earlier to 666.1 tonnes, the lowest in seven years.

“With the implementation of GST, we are expecting some kind of disruption in demand in the second half,” Somasundaram PR, Managing Director of WGC’s operation, told Reuters referring to a Goods and Services (GST) that will be implemented from July 1.

The long-awaited is hailed as India’s biggest overhaul since independence in 1947. The will replace a slew of federal and state levies, transforming Asia’s third largest economy into a single market for the first time.

But small jewellers, who account for nearly two-thirds of the industry, could face operational issues in transitioning to the GST, Somasundaram said.

is a mainstay of Indian culture, serving as the primary vehicle for household saving for hundreds of millions of people.

The government of Prime Minister Narendra Modi has tried to curb costly bullion imports and put restrictions on cash transactions.

Indians buy more than two-thirds of with cash.

To cut down unofficial trading, under the GST, should be taxed substantially lower than the existing duty of 12 percent, Somasundaram said.

The has estimated that 100-120 tonnes of smuggled entered in 2016. Smuggling has surged since raised the import duty on to 10 percent in 2013 to narrow a gaping current account deficit.

 

 

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