New Delhi : Jewellery-related stocks came in focus in Tuesday’s trade on reports that the government has rolled back its decision to apply 1 per cent tax collection at source (TCS) on cash purchase of gold jewellery. According to market experts, the decision will boost the demand for gold jewellery.
The government had announced the levy of 1% TCS on cash transactions for buying gold worth over Rs 2 lakh as one of the measures to keep a check on and to bring down black money in the system. However, jewellers said this will only deter buying in an already lean season.
Dismayed at the government's decision, coupled with the imposition of a 1% excise duty on gold and diamond jewellery, jewellers across India shut their shops and took to the streets to strike which lasted for 45 days.The decision to roll back at least the TCS on gold purchases over Rs 2 lakh has been welcomed by the industry. Instead the TCS will be applicable for cash transactions over Rs 5 lakh, as it was earlier.
Commenting on the government's decision, Bachhraj Bamalwa, Director, All India Gem & Jewellery Trade Federation (GJF) was quoted in an interview saying that the decision was a huge relief for those looking to buy wedding jewellery as Rs 2 lakh is a very small amount.