Analysts at the World Gold Council say they believe a new tax plan set to go into effect in India will ultimately boost demand for gold in the world’s second-largest market for the yellow metal.
On July 1, India’s current labyrinth of taxes will be replaced by a nationwide Goods & Services Tax (GST). The World Gold Council called it the ‘biggest fiscal reform since India’s liberalization in the early 1990s.’
While gold consumers will face a slightly higher tax rate, and the industry will go through a period of adjustment, we see the net impact on the gold industry as being positive. The gold supply chain should become more transparent and efficient, and the tax reform can boost economic growth, which we see as supporting gold demand.’
The government set the tax rate for gold under the GST at 3%, lower than the 5% expected. This has already sent a wave of optimism through the country’s gold and jewelry dealers.
This post was published at Schiffgold on JUNE 12, 2017.