Kolkata (IANS) - The World Gold Council on May 25 said the enforcement of hallmarking is key along with implementation of Goods and Services Tax (GST) to bring the transparency in the trade of the yellow metal. The World Gold Council also bats for a "substantially low" GST rate. At its recent meeting the GST Council could not reach a consensus on the GST rate to apply on gold and will meet again on June 3 in New Delhi to decide this.
"With the implementation of GST, it is important that the hallmarking is also enforced. Our view is that regardless of how the announcement comes, within the next 18-24 months, we should have a complete extension of hallmarking. We are for mandatory hallmarking," said Somasundaram PR, Managing Director, India, World Gold Council.
Asked about the possible GST rate on gold, he said: "Today, the (tax) rate is around 12.5%. Better thing is to keep the rates substantially low and to incentivise the moving of entire trade into a more transparent and compliance systems... something around 50% off (the current rate)."
He said operational issues in the entire supply chain of gold, which is complicated itself, need to be clarified.
"There is no clarity on the GST rate on gold and also on operational issues. One-third of jewellers' business in India is gold for gold. Operational complexity appears to be high under the GST unless it is clarified," Somasundaram said.
"Traders have different interpretation as of now," he added after the launch of Bengali version of a WGC's report -- India's Gold Market: evolution and innovation here.
Adding that the GST would be a big success for the industry, he said whatever be the rate, it would take 12-18 months for the industry to settle down.
"We believe the GST will get gold out of shadow of black money and in the long term, we are going to see a big jump in the way we sell and export gold. If the system is perfected, the smuggling is going to get harder," he said.
The objective of the implementation of the GST is to bring the transparency in gold buying, he added.