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Reuters reported that the Indian government has reintroduced a local sales tax on gold and diamond jewelry. The tax, which was eliminated four years ago, will be in addition to a record 10-percent import duty on gold put in place in 2013.
Reuters reported that the Indian government has reintroduced a local sales tax on gold and diamond jewelry. The tax, which was eliminated four years ago, will be in addition to a record 10-percent import duty on gold put in place in 2013.
As quoted in the market news:
Finance Minister Arun Jaitley, presenting his third budget on Monday, announced an excise duty of 1 percent on gold and diamond jewellery. A report from his ministry on Friday said gold was under-taxed in the country, where the richest 20 percent account for roughly 80 percent of gold purchases.
Jewellers said the new duty will cut demand, which could eventually put a brake on the safe haven rally in global bullion prices.
“The excise duty will bring jewellers’ business to a standstill,” said Ketan Shroff, a spokesman for India Bullion and Jewellers Association, saying many of the nearly 10 million artisans working in the industry could lose their jobs.
The government imposed an excise duty in 2012 too, but was forced to roll it back after jewellers went on a strike.