From times immemorial, gold has had a great significance. The precious yellow metal has always attracted human attention. The desire of owning more and more quantities of this valuable metal has often ended up in criminal acts of various sorts. In the modern world, governed by numerous laws, commercialization and international transactions are regulated by the policies of the Government.
The premier think-tank of the Government of India, the National Institute for Transforming India (hereinafter referred to as “NITI Aayog”) provides critical information, innovation and entrepreneurial support to the country. Established via a resolution of the Union Cabinet on January 1, 2015, NITI Aayog aims at designing strategic and long-term policies and programmes for the Government and also provides relevant technical advice to the Centre and States.
Recommendations regarding gold transactions
NITI Aayog made suggestions regarding the carrying out of transactions related to gold in India, some of which are stated below:
- Decreasing the import duty on gold from the existing level of 10%;
- Reduction of the Goods and Service Tax (hereinafter referred to as “GST”) on gold from the current rate of 3%;
- Review and revamp the gold monetisation scheme and the sovereign gold bond scheme;
- Introduction of a new “gold savings account” in banks;
- Setting up of the Gold Board and bullion exchanges for the purpose of increasing commercialization of gold;
- Exemption of 3% Integrated Goods and Service Tax (hereinafter referred to as “IGST”) to be paid by exporter on line with custom duty with a provision of bank guarantee.
- IGST exemption in respect to the supply of gold by foreign buyer;
- The revision of threshold for exemption under GST, which at present is INR 2,000,000, on the basis of value-added. This can be determined by using average ratio of value added to value of sales for the sector concerned.
- Lower GST rate for repair service of jewellery i.e. from 18% to 3%.
- Scrapping of commodity transaction tax (hereinafter referred to as “CTT”) on gold derivatives and exemption on capital gains tax;
Legal Gold Dealings
NITI Aayog has made proposals to the Government for facilitation of gold-based business operations in the country. Lesser tax hurdles and greater awareness about the simplified procedures for dealing would promote more legal gold dealings and prevent the evils such as smuggling.