The Hindu Business Line : Ministry urged to allow status holders to import gold

Mumbai, Feb. 11 Gold imports would be further liberalised if the Commerce Ministry accedes to the proposal of the Gem and Jewellery Export Promotion Council (GJEPC).

The Council has urged in its pre-budget proposal that imports of gold be allowed to ‘status holders’ also known as the export trading houses. Currently the activity of importing gold is only permitted to a few nominated scheduled banks and some other permitted trading houses.

The entities importing gold today have no reach in small towns to meet the small requirements of the jewellery makers, said Mr Sanjay Kothari, Chairman of the Council. Also, the time factor is an issue as deliveries get delayed and also the cost of purchasing from dealers is higher by 1 to 1.5 per cent, he said.

The proposed move will not have any major impact on the market, except that it will help the import of gold for jewellery-making in small towns, said Mr Bhargav Vidya of B.N. Vidya and Associates.

“I don’t see any issue with why it should not be permitted under the Open General Licensee,” he added. Gold is a commodity, but it is also viewed as a form of currency in India.

Though the Council’s long standing plea for a turnover tax regime was accepted in the last Budget, there is a difference of opinion about the percentage of profit. While the Council had suggested that the net profits of the trade be taxed at 3 per cent the Finance Minister had announced an 8 per cent tax on the net profit.

The Council has said that this method of taxing would allow additional revenue of Rs 100 to Rs 200 crore to the Government and would be more transparent. Though the turnover tax regime is an optional offering, the Chairman said that 70-80 per cent would opt for a tax payment based on turnover.

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