Gujarat Goes On Gold Buying Spree As GST Council To Decide Rate Tomorrow

Sale of gold has gone up by 30 to 40 per cent in Gujarat, triggered by concern that the tax rate might go up after GST comes into force from 1 July

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Sale of gold have gone up by over 30 per cent in Gujarat over the last month.

AHMEDABAD:  Hardik Rana has a wedding coming up in the family early next year but the Ahmedabad entrepreneur is already out shopping for gold. And he isn't the only one hurriedly picking for the yellow metal over fears that the tax might go up once the Goods and Services Tax kicks in next month.

Generally bullion buyers wait for the Navratri, the nine-day period in September this year is considered auspicious for big purchases by Hindus. "But I am specifically here because we fear that the gold prices will go up following introduction of the GST," Mr Rana said, sitting in a jewellery shop with his shopping list.

The GST Council, a body of 32 state finance ministers that Finance Minister Arun Jaitley, which has the powers to decide the rate at which gold should be taxed under the new tax regime, hasn't taken a call so far. It has tried, but there was no consensus in the past. The council is meeting again on Saturday (3 June) and the government is hopeful that it would be able to seal the duty structure.

Irrespective of how Saturday's meeting goes, most people fear gold prices would nevertheless go up.

It is this expectation that has driven people to bullion traders and jewellers well.

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"30 to 40 per cent increase in sales have been witnessed in the last month alone... People are hearing about the uncertainty about the tax structure and hence, want to buy early," Manoj Soni of Ahmedabad's association of jewellers said.

Last month, Gujarat imported 12.95 tonnes of gold, the highest since December last year.

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