Here Are The Latest Big Changes To India’s Fast-Moving Gold Rules

0
Here Are The Latest Big Changes To India’s Fast-Moving Gold Rules
Global_Intergold / Pixabay

Key Africa gold nation Tanzania stepped up its fight against miners this week. Accusing Barrick Gold-backed Acacia Mining of operating illegally in the country — as well as underpaying government royalties.

That should mean a continued lack of gold supply here. With the drop in output coming as bullion demand is reportedly ramping up in one of the world’s major markets — where new policies are continuing to re-shape the face of the gold market.

India.

WSJ Techlive: IPO, SPAC Or Direct Listing? The Path To Going Public

investThis year has been a record-breaking year for initial public offerings with companies going public via SPAC mergers, direct listings and standard IPOS. At Techlive this week, Jack Cassel of Nasdaq and A.J. Murphy of Standard Industries joined Willem Marx of The Wall Street Journal and Barron's Group to talk about companies and trends in Read More

Local press reported that gold buying in India has seen a major spike the last few weeks. After the government decided earlier this month to adopt a new 3% sales tax on bullion.

That new tax is going to make gold buying more expensive in India going forward. With the new rate scheduled to take effect on July 1.

With that deadline looming, buyers have reportedly been scrambling to pick up supplies now, before the new tax rates become effective. So much so that many Indian jewellers are reporting sales of gold for wedding gifts being made now — despite the fact that wedding season doesn’t begin until winter.

Tax rates on gold after this month are actually likely to rise even further than the posted 3% sales tax rate. Because of an additional levy being placed on the gold jewelry manufacturing sector.

Officials said this week they will impose a 5% goods and services tax on the “making” of gold products. Payable by jewellers, who will presumably pass the charges along in pricing to end consumers.

The 5% rate for the manufacturing tax is actually a win for India’s gold-makers. With the government earlier planning to charge an 18% tax — but then backing off to the 5% mark after meetings over the weekend.

But even at that lower rate, the total increase in taxes for India’s gold buyers is going to be significant. Watch for stats on buying after July 1 to see the effects on demand in this critical market.

Here’s to being taxing,

Dave Forest

Article by Pierce Points

Updated on

Previous article The Great Gold Convulsion Of 2017
Next article Oil Situation Update
Dave Forest writes Pierce Points Free Daily E-Letter, an advisory on mining and energy read every day by BP, Rio Tinto, JPMorgan, BNP Paribas, Repsol, GDF Suez, GE, Platts, Warburg Pincus, and the UN. Sign up for free at www.piercepoints.com. Mr. Forest has funded and managed over $80 million in global exploration and development in natural resources, and continues to design and develop projects globally. He is a professional geologist.

No posts to display