With the introduction of Goods and Services Tax (GST) in July, many opportunities for gold trade can open in the country. India is the second largest consumer of gold in the world. On the one hand, coming to GST can lead to consolidation in gold trade, in which non-organized companies and wholesale marketers may disappear from the market, while at the same GST rate above 2%, many of these businessmen can take advantage of Gray Route.

Demand is likely to be sluggish at the beginning of the consumption front, but with the festive season’s advance, demand may increase in September. The World Gold Council has estimated the impact of GST on the annual consumption of 650 tonnes in 2017, which is 3.77 percent less than the 2016.

The advantage will be to those retailers who have their own manufacturing network, which means that large organized players, who have the power to make their jewelery, will have the opportunity to stay in business. However, a section of businessmen assumes that if the GST is kept within 2%, the tax compliance will increase. All India Gem and Jewelery Trade Federation chairman Nitin Khandelwal said, “If GST is more than 2 per cent then the business of non-governmentalities will increase. We have seen that tax compliance decreases due to excess tax. Despite making GST gold expensive, people will buy gold. There may be some problems in the beginning, but later it will be overcome.