Page 7 - Bollion World Volume 4 Issue 8 August 2024

Bullion World | Volume 4 | Issue 8 | August 2024

Gold ETFs and gold funds now align with physical
gold in having a 24-month holding period. Previously,
gains from gold ETFs were taxed as ordinary income.
However, under the new tax regime, Short-Term
Capital Gains (STCG) are taxed at 20%, while Long-
Term Capital Gains (LTCG) are taxed at 12.5%. This
EDITORIAL improved tax efficiency enhances the appeal of gold
funds and ETFs, particularly for investors in higher
tax brackets.

The move is likely to hit the Gold loan companies
as it diminishes the value of gold and lowers their
Dear Readers loan-to-value (LTV) ratios, which in turn affects their
financial stability. A reduced LTV ratio indicates that
The Government of India in its budget-2024 has the gold backing the loans has decreased in value
reduced the customs duty on gold, silver, and relative to the total amount of loans given, thereby
platinum to 6% and 6.4%, respectively, down from decreasing the company's margin of safety
the previous 15%. Accordingly, basic customs duty
on these metals has been reduced from 10% to 5%, In this special edition of Bullion World, released just
while the Agriculture Infrastructure Development before the India Gold Conference 2024, we feature a
Cess has seen a reduction from 5% to 1%. diverse array of articles. We begin with Mr Prithviraj
Kothari, National President of IBJA, who discusses
Imports of gold and silver from the UAE under the the gold and silver markets post-Budget. This is
Comprehensive Economic Partnership Agreement followed by highlights from the Shanghai Platinum
(CEPA) had been on the rise, thanks to the Week 2024. Ms Aksha Kamboj, the newly elected
preferential lower duties afforded by the agreement. National Vice President of IBJA, shares her visionary
This favourable tariff structure incentivized increased leadership ideas for the future. Mr Karthik Krishnan
imports of these precious metals. However, the delves into the ESG reforms at MMTC PAMP, while
recent reduction in customs duties is expected to Mr Vidit Garg from Kundan Group illustrates the
affect this trend. By lowering the duty rates, the thriving business of minted products in India. Mr
appeal of importing gold and silver under CEPA is Surendra Mehta provides insights into the newly
set to diminish, as the financial advantage previously launched “IBJA Verified” initiative.
offered is reduced. This shift is likely to decrease the
volume of these imports through this channel. Mr Rajesh Neelakanta explains recent tax reforms in
the logistics sector. Mr Chirag Thakkar from Amrapali
Moreover, the duty cut addresses another significant reviews the bullion trading business over the past
issue: the misuse of the tariff benefits. Lower year, and Mr Haresh Acharya gives us an update on
duties have historically provided opportunities for their refinery in GIFT City. Mr Rakesh Bhan shares
importing gold disguised as platinum to evade advancements in assaying instruments at Fischer,
higher tariffs. The reduction in import duties aims and finally, the recycling department at Sovereign
to curb such practices by aligning the regulatory Metals briefs us on the challenges of accessing gold
framework more closely with market realities, scrap.
thereby enhancing transparency and preventing
abuse of the trade system. Best wishes,
G Srivatsava
Editor

We would be happy to receive your comments and feedback on the content of this edition,
please write to editor@bullionworld.in

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