04 June 2016

Government waives TCS for gold jewellery purchase upto Rs 5 lac

Central govt rolls back tax on cash buy of gold jewellery


New Delhi, Jun 1: In a move which has brought cheers to both the buyers of gold ornaments and dealers, the central government, which had proposed to levy tax collection at source (TCS) of one percent for purchase of gold and diamond ornaments worth two lac rupees and above at a stretch, has gone back on this decision. The prolonged protest observed by gold merchants across the country on this contentious issue seems to have done the trick.
As per budgetary announcement, this tax was to come into effect from June 1 this year. Bending under pressure brought by gold merchants all over, the government, which had hitherto remained firm on levying this tax and also collection of PAN number of customers for all purchases of two lac rupees and above, has relented. It has restored this limit to five lac rupees as suggested by jewellers. TCS however, will continue to be levied on purchase of goods and services worth two lac rupees and above in cash at a stretch from June 1 onwards.
All India Gems and Jewellery Trade Federation director, Bachcharaj Bamalva, who welcomed this decision, said that this decision has brought relief to people who were preparing to buy wedding jewellery in this season. Saurabh Gadgil, executive director of PNG Jewellers, says that the government, by giving leverage on its earlier stand, had taken a step that is customer friendly, as gold price has gone up by about 20 percent in the recent past.
The first quarter of this year had registered a noticeable decline on gold jewellery turnover by 41 percent, which stood 88.4 tonnes. This was attributed to hike in price of gold and also protracted strike by jewellers which went on for 45 days. Annually there is a demand for 850 to 900 tonnes of gold in India.
The government had thought of levying TCS to keep watch on tax evasion and black money transfer.

source: Daijiworld Media Network - New Delhi (SP)