NT NETWORK
PANAJI
Gold jewellers see no impact of the Goods and Services Tax (GST) on their business although they are still assessing how the new tax will affect them in the months to come.
Local goldsmiths Monday said that the GST is not likely to affect demand much, as the overall increase in the price of jewellery is likely to be marginal. Ornaments got slightly costlier across shops on Monday after the introduction of the tax from July 1.
“GST will lead to a rise in the price of ornaments initially and naturally there will be some impact on buyers but let’s see, the picture is not clear. We will come to know in 10-15 days’ time,” said Pramit Raikar, president of Goa Gold Dealers Association (GGDA). He said that the demand at the retail end is always affected by gold prices and fortunately the bullion market has reacted moderately to GST.
Twenty-four carat gold on Monday trended tad higher at Rs 29,650 per 10 grams in Mumbai compared to Saturday closing of Rs 29,450 per 10 grams, revealing a price rise of Rs 200 per 10 grams.
Overall, the gold market in Goa is slightly sluggish currently but shop owners attributed it to the “off-season slump.” Several large stores offered discounts on making charges during the days prior to GST. Some cities reportedly witnessed a rush of buyers but local jewellers said that they did not experience a spurt in business on account of the tax.
“It is too early to talk of the impact, as GST is just in and most of us have not understood the effect of it on the trade,” said Sagar Pednekar, president of North Goa Jewellers Association. He said that jewellers were paying 1.5 per cent VAT earlier and now they have to pay three per cent GST in its place. “It is a small hike. Even if the demand dips now, it is expected to normalise once the festive season kicks in from Ganesh Chaturthi onwards,” said Pednekar.
Members of GGDA are expected to attend a jewellers’ meeting in Belagavi on Friday called by South India Dealers Association to discuss the affect of GST on old stocks and on making charges.
Most of the local jewellers operate in the traditional way. Only some have computerised their systems. GST needs bar-coding, use of computers and will result in a significant change in the way business is conducted.
Raikar said that the government has not changed the custom duty on gold which continues to remain at 10 per cent. “Tinkering in the import duty would have made a major difference,” he said. “The market is sensitive to the price of gold. If international prices weaken and domestic price falls, then the retail demand bounces back immediately,” Raikar said.
Prior to GST, total tax and duties on gold were nearly 12.4 per cent and from July 1, it is marginally higher at 14 per cent.