Implement hallmarking with GST enactment: World Gold Council

Kolkata, May 25: The World Gold Council said Thursday that Hallmarking is key to implementation of goods and services tax (GST) for transparency in yellow metal trade. 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 per cent. 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 per cent 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 we will get GST out of gold from the shadow of black money and in the long run, we believe that we are going to see and sell at a large scale in gold exports. If the system is perfect, smuggling will be difficult, "he said. GST is aimed at bringing transparency in buying gold.