As notes return, gold buyers go back to cash
KOLKATA: Cash sales of gold are fast replacing digital transactions because of higher availability of currency and fear that electronic sales would be scanned by the tax authorities, trade and industry executives said.
Industry executives said some jewellers are actually helping customers buy gold worth more than Rs 2 lakh in cash by splitting the transaction into smaller bills to avoid the mandatory disclosure of PAN details.
“Cash transactions have definitely increased as the cash flow has improved in the system. Post de monetisation, we had seen people opting for digital and banking transactions to buy gold. But now, nearly 40%-45% of the sales are happening in cash.“ said Nitin Khandelwal, chairman, All India Gem & Jewellery Trade Federation (GJF).
Samir Sagar, managing director of Mumbai-based Manubhai Jewellers, said purchases of gold jewellery worth Rs 65,000-75,000 are happening in cash. “However, we have not come across such cases where separate bills are being raised to help customers avoid submitting PAN card details. If we notice such things, we will definitely intervene,“ said Khandelwal.
Industry executives also said that cash sales will increase from this week as the Reserve Bank of India has raised the cash withdra wal limit for savings account to Rs 50,000 per week, effective from February 20. The limits on cash withdrawals from savings bank account will be withdrawn completely from March 13.
There's a feeling within industry circles that buying will rise as customers will try to avoid fur nishing PAN details. Cash purchase of gold whose value is less than Rs 2 lakh is expected to increase from April as any jewellery which is worth more than Rs 2 lakh will attract 1% TCS (tax collected at source) charge.
Once the Finance Bill 2017 is passed, jewellery will be treated on par with general goods which attract 1% TCS o n cash purchase of above Rs 2 lakh.
The bill seeks to do away with the threshold of Rs 5 lakh on jewellery purchases for applicability of TCS because the Union Budget 2017-18 has proposed to ban cash dealings of over Rs 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by person receiving the cash.
Industry executives said some jewellers are actually helping customers buy gold worth more than Rs 2 lakh in cash by splitting the transaction into smaller bills to avoid the mandatory disclosure of PAN details.
“Cash transactions have definitely increased as the cash flow has improved in the system. Post de monetisation, we had seen people opting for digital and banking transactions to buy gold. But now, nearly 40%-45% of the sales are happening in cash.“ said Nitin Khandelwal, chairman, All India Gem & Jewellery Trade Federation (GJF).
Samir Sagar, managing director of Mumbai-based Manubhai Jewellers, said purchases of gold jewellery worth Rs 65,000-75,000 are happening in cash. “However, we have not come across such cases where separate bills are being raised to help customers avoid submitting PAN card details. If we notice such things, we will definitely intervene,“ said Khandelwal.
Industry executives also said that cash sales will increase from this week as the Reserve Bank of India has raised the cash withdra wal limit for savings account to Rs 50,000 per week, effective from February 20. The limits on cash withdrawals from savings bank account will be withdrawn completely from March 13.
There's a feeling within industry circles that buying will rise as customers will try to avoid fur nishing PAN details. Cash purchase of gold whose value is less than Rs 2 lakh is expected to increase from April as any jewellery which is worth more than Rs 2 lakh will attract 1% TCS (tax collected at source) charge.
Once the Finance Bill 2017 is passed, jewellery will be treated on par with general goods which attract 1% TCS o n cash purchase of above Rs 2 lakh.
The bill seeks to do away with the threshold of Rs 5 lakh on jewellery purchases for applicability of TCS because the Union Budget 2017-18 has proposed to ban cash dealings of over Rs 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by person receiving the cash.
