Banks are gearing up to resume import of gold on consignment basis following the government's decision to allow banks to pay the goods and services tax (GST) of 3 per cent at the time of sale instead of import.
Consignment imports, which help the banks give spot delivery of gold when demand rises, had almost stopped since July 1, when the GST regime was rolled out.
“Import is expected to resume from next week as there is clarity on GST calculation,“ said Shekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra BankBSE 2.18 %. The volume of import will depend on the demand, he said.
In September, imports surged 31 per cent from a year ago to 48 tonnes as the industry anticipated higher demand during the festival season leading up to Dhanteras and Diwali. Traders said that most of the imports since July 1happened in the form of gold on loan to jewellers. Contrary to industry expectations, sale of gold and jewellery during the Dhanteras-Diwali period fell 30 per cent from a year ago. “It has been a slow start, but we are hopeful that it will gather momentum in the upcoming wedding season, which kicks off on November 4 and continues till mid December,“ said Nitin Khandelwal, chairman, All India Gems & Jewellery Trade Federation.
The Khandelwal-led federation is meeting on Friday to work out a promotional scheme for its members. “The scheme is called Lucky Lakshmi and we have started working on it,“ said Khandelwal.
Individual jewellers are also looking at giving discounts during the upcoming wedding season to lure customers. Saurabh Gadgil, chairman, PNG Jewellers said: “Generally we give discounts twice in a year once during the lean season of May-July and then during Dhanteras Diwali period. But this time we may have to offer discounts during the wedding season. It may not be huge discounts that we offer during Dhanteras but may be a reasonable one.“
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