All India Gem and Jewellery Domestic Council push for pan-India gold price
The All India Gem and Jewellery Domestic Council (GJC), an industry body representing retail jewellers, is working towards building a consensus for a single rate of gold applicable for jewellers across the country.
At present, gold prices vary between different cities in the country on account of factors such as region-specific demand, stock purchase trends and transportation cost. “The idea is to create a level playing field for all stakeholders and prevent any undercutting,” said Saiyam Mehra, the chairman of GJC.
The GJC in association with the Swarna Shilpa Bachao Committee (SSBC) on Thursday held a panel discussion with small and large retailers in Bengal and eastern India to work out the implementation of the uniform rate. The GJC has already held similar discussions with jewellers in the South and by September end is expected to firm up the roadmap for the implementation of the uniform rate.
According to city-based jewellers who were present at the discussion, there are significant benefits of a uniform rate which will prevent large players from undercutting smaller players in the form of discount on gold prices and help build trust among consumers, regardless of their location. The elimination of price disparities could lead to a reduction in gold prices in some markets with no opportunities of arbitrage.
“While the concept is good, bringing all stakeholders to comply with a single rate would take lot of effort as the margins are different for different players,” a city-based jeweller said. While welcoming the decision of the government to lower customs duty on gold in the Union budget, jewellers hoped that the government would also consider a cut in the GST rate in the future.
“The industry hopes that the GST rate will come down from 3 per cent to around 1-1.5 per cent. In the days of VAT, it was around 1 per cent. Representations have been made to the government in this regard,” said Samar Kumar De, working president, SSBC. Gold prices continued to fall for the third day on Thursday and tumbled by ₹1,000 to ₹70,650 per 10 grams in Delhi. In Calcutta, prices were down by ₹950 to ₹68,600 per 10 gram.
The customs duty on gold and silver was cut from 15 per cent to 6 per cent in the Union budget. While this will significantly benefit consumers, jewellers may face near term pressure on margins having to manage its existing inventory at higher duty-paid prices.
Gold prices declined on selling by local jewellers amidst a weak global market.
Source: https://www.telegraphindia.com/