Ahead of goods and services tax (GST) council meeting to be held on December 18, the demand for jewellery in the market has jumped around 20 per cent. The jewellery-market has registered such growth in demand on account of speculation that the council meeting could increase GST on gold from 3 per cent to 5 per cent. The price
Anantha Padmanabhan, chairman of All India Gems and Jewellery Domestic Council (GJC), says that the decline in the gold price has revived jewellery demand sentiment in India. Besides consumer footfall, jewellery sales have increased in the last two days by at least 20 per cent,”
The demand for the yellow metal this year never saw a sudden hike because of the sharp increase in gold prices. Gold prices had jumped nearly 20 per cent between from second to the third quarter of the year. The World Gold Council (WGC) data reflected a 32 per cent decline in India’s jewellery demand at 101.6 tonnes for July–September 2019, against 148.8 tonnes for the corresponding quarter last year. The consumers were expecting the tax-deduction on gold.
An import duty of 12.5 per cent was imposed from earlier 10 per cent on gold in 2019 budget which led the overall tax incidence works out to 15.5 per cent, an average 10 per cent making charge on jewellery is levied by jewellers too.
Gold prices fell down Rs 34 to Rs 37,665 per 10 gram in futures trade as participants cut down their bets on Thursday.
Kumar Jain, director of a jewellery retailer in Mumbai, says, ‘With record weddings scheduled this year, consumers are booking their jewellery for weddings, festivals like the Christmas and New Year. We have seen a sharp increase in jewellery demand in the last few days.”
Indian jewellery demand can rise further with more correction in the price. However, the sudden increase in the demand can truly be attributed to an expected rise of GST on the yellow metal.