The centre will formulate a comprehensive gold policy in order to develop it as an asset class, finance minister Arun Jaitley announced on Thursday in his Budget speech.
He added that the Central government is going to revamp the gold monetisation scheme and develop “trade-efficient system of regulated gold exchanges in the country”. Moreover, the Central government has imposed social welfare surcharge of 3 per cent on the “aggregate” custom duty, which is currently being levied on gold that is in unwrought form or in semi-manufactured form or in powder form.
Currently, the central government has imposed 10 per cent customs duty on gold. Therefore, it means that if someone imports a gold worth Rs 1000 now, she would be paying Rs 100 as customs duty and Rs 3 as social welfare surcharge for it (because 3 per cent surcharge is imposed on aggregate customs duty amount).
In his budget speech, Jaitley said, “The Government will formulate a comprehensive Gold Policy to develop gold as an asset class. The Government will also establish a system of consumer friendly and trade efficient system of regulated gold exchanges in the country. Gold Monetisation Scheme (GMS) will be revamped to enable people to open a hassle-free Gold Deposit Account.”
In 2015, the government launched the GMS with the objective of mobilising the gold held by households and institutions in the country. The scheme allows a bank’s customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2.25 per cent to 2.50 per cent.
Gem & Jewellery Export Promotion Council (GJEPC) Chairman Pramod Agarwal welcomed the government’s initiative to formulate a Gold Policy and said that this will ensure a new era of development for the gold market and exports in the sector.
He added that it was good that the government was planning to establish a “consumer friendly and trade efficient system of regulated gold exchanges in the country”, while reiterating that the Council would “continue to seek a reduction in basic import duty on gold, silver and precious metals and hope that it will be considered as part of the Gold Policy announcement”.
The GMS has replaced the Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme have been allowed to run till maturity unless the depositors prematurely withdraw them. Under GMS, the minimum deposit at any one time can be raw gold, which includes bars, coins, jewellery that does not contain stones and other metals, equivalent to 30 grams of gold. There is no maximum limit for deposit under the scheme.