Rise in India's gold sales tax 'may lead to smuggling'
Faltering appetite in a country where gold is used in everything from investment to wedding gifts could drag further on global prices
A hike in taxes on gold sales in India could reduce short-term demand from the world's No2 consumer of the metal, the World Gold Council has said in a report. Faltering appetite in a country where gold is used in everything from investment to wedding gifts could drag further on global prices, already trading near their lowest level in seven weeks. "In the short term at least, we believe [the tax] may pose challenges for the industry. Small-scale artisans and retailers with varying degrees of tax compliance may struggle to adapt," the council said in a report published on Thursday. As part of a new nationwide sales tax regime that came into force on July 1, the goods and services tax on gold has jumped to 3% from 1.2% previously. There have been fears that the tax increase could stoke under-the-counter buying and drive up the appetite for smuggling precious metals into India, where millions of people store part of their wealth in bullion and jewellery. The World Gold Council also sai...
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