Reuters/Rajendra Jadhav & Nithin ThomasPrasad/06-29-17
Gold premiums in India jumped to the highest level in 7-1/2 months this week as consumers advanced purchases to avoid paying higher tax when a new nationwide sales tax takes effect from July 1.
India, the world’s second-biggest gold consumer, has said it will impose a 3 percent goods and services tax (GST) on gold, up from 1.2 percent currently.
The GST will replace a slew of federal and state levies from Saturday, transforming Asia’s third-largest economy into a single economic zone with common indirect taxes.
While gold demand is usually weak in June, jewellery showrooms in key Indian cities like Mumbai and Kolkata were crowded this week.