Page 31 - Bullion World Volume 3 Issue 3 March 2023

Bullion World | Volume 3 | Issue 3 | March 2023

Demand for gold jewellery

picks up after Budget

India’s leading retail jewellers said demand for gold
jewellery has picked up after the budget, supported
by a Rs 2,346 per 10 gm drop in price from January’s
peak of Rs 58,689 per 10 gm.

Budget 2023: Tax clarity on EGRs to Joy Alukkas, Malabar Gold & Diamonds and Senco
boost gold recycling, cut imports Gold & Diamonds said customers had held back on
purchases expecting a cut in import duty on gold in
the budget, which did not happen. This prompted
Finance Minister Nirmala Sitharaman has proposed the them to loosen their purse strings for the yellow
exclusion of the conversion of the physical form of gold into metal.
EGR and vice versa by a SEBI-registered Vault Manager
from the purview of ‘transfer” in a bid to boost trading in "Now that prices have fallen and there is no chance of
Electronic Gold Receipt (EGR). As per the proposal, the a cut in import duty, the consumers are now flocking
conversion will not attract capital gain tax anymore. The to our stores," said Joy Alukkas, chairman of Kerala-
clarity on tax treatment is expected to boost recycling of based Joyalukkas group. “Going ahead, the sales will
gold and bring down imports in long run.
remain good as the rupee is strengthening against
the dollar and internationally prices are falling, which
The Budget has also proposed that the cost of acquisition of will make gold cheaper in India.”
the EGR for the purpose of computing capital gains will be
deemed to be the cost of gold in the hands of the person in
whose name the EGR is issued, and the holding period for Southern India accounts for nearly 40% of the
the purpose of capital gains, would include the period for country's total jewellery demand. Alukkas said the
which gold was held by the assesses prior to its conversion demand in February increased by 15% from January.
into EGR. “The average ticket size is Rs 60,000–70,000 and
people are buying light to medium jewellery,” he said.
Where an EGR issued by a Vault Manager, becomes the
property of the person as consideration of a transfer, International gold rates hit a one-month low as fears
as referred in the newly inserted Section 47, the cost of of a recession in the US eased following strong
acquisition of the asset for the purpose of the said transfer, economic and retail sales data from the country. In
will be deemed to be the cost of gold in the hands of the India, spot gold was trading at Rs 56,343 per 10 gm,
person in whose name the EGR is issued. down from Rs 58,689 per 10 gm in the second half
of January. “The decrease in gold price is acting as
Surveys indicate gold deposits a great purchase trigger for consumers, especially
in the ongoing wedding season,” MP Ahammed,
in Odisha chairman of Thrissur –based Malabar Gold &

Diamonds said. “Those who were deferring their gold
Surveys have indicated gold reserves in Odisha, Mines jewellery purchase due to higher gold prices have hit
Minister Prafulla Kumar Mallick said in the assembly. The the markets. We are witnessing healthy footfalls and
surveys, conducted by the Geological Survey of India and demand at all our stores.”
the state Directorate of Mines and Geology, have indicated
gold reserves in at least three districts -- Deogarh, Keonjhar India’s price-sensitive eastern market is also
and Mayurbhanj, he said, replying to BJD MLA Sudhir Sama witnessing a surge in demand because of the price
The areas where these gold deposits are likely to be present drop. “We have witnessed good demand in the last
are Dimirimunda, Kushakala, Gotipur and Gopur in Keonjhar
district, Joshipur, Suriaguda, Ruansila and Dhushura hill in 7-10 days,” Suvankar Sen, managing director of
Mayurbhanj district, and Adas in Deogarh district, he said. Senco Gold & Diamonds, said. “The average ticket
The first surveys in these areas were conducted by the price is in the range of Rs 35,000 and Rs 40,000.
Directorate of Mines and Geology and the GSI in the 1970s There is also demand for diamond studded jewellery.”
and '80s, but the findings were not made public. A survey Source: https://economictimes.indiatimes.com
was again conducted over the last two years by the GSI, the
minister said.

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