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Government may soon roll out comprehensive gold policy
Oct-19-2018

In order to promote the metal industry and the gems and jewellery sector, which is a major contributor to India's export basket, the government may soon roll out a comprehensive gold policy. The policy also aims at creating jobs in the gold sector. The policy likely to focus on promoting domestic gold industry and exports of gems and jewellery, which contributes about 15 percent to total merchandise outbound shipments.

Finance Minister Arun jaitley, in February, had announced formulation of a comprehensive gold policy to develop gold as an asset class. Besides, in order to create a tax compliant system within the gold sector, the government think tank Niti Aayog has recommended the government to reduce the basic customs duty on gold from the existing level of 10% to as low as possible. It also suggested that slash the Goods and Services Tax rate on the precious metal from the current 3%. It had recommended the government to review and revamp of the gold monetisation scheme, sovereign gold bond scheme besides setting up of a gold board and bullion exchanges across the country to have greater financialisation of the yellow metal.

To promote exports, the Gems and Jewellery Export Promotion Council (GJEPC) has asked for support in terms of increasing incentives under the Merchandise Exports from India Scheme (MEIS) to boost shipments. Under Merchandise Exports from India Scheme (MEIS), the government provides duty benefits depending upon the product and country. Rewards under the scheme are payable as percentage of realised free-on-board value and MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty.

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