CBEC removes 1% excise duty on branded gold coins
The government has scrapped the excise duty on branded gold coins, a move that one would assume benefit the industry and consumers alike.
As Government scraps the excise duty on gold coins, branded gold coins may become cheaper. In a notification, the Central Board of Excise and Customs (CBEC) said excise duty will be nil on gold coins of purity 99.5 per cent and above, bearing a brand name when manufactured from gold on which appropriate duty of Customs or excise has been paid.
Equally it is also said nil excise for Silver coins of purity 99.9 per cent and above, bearing a brand name when manufactured from silver on which appropriate duty of customs or excise has been paid. Speaking to Indian Express, Balram Garg, Managing Director of PC Jewellers said, “The move will make branded coin cheaper and promote organised industry.” Supporting Garg, Saurabh Gadgil, Chairman & Managing Director of PNG Jewellers and Director at Indian Bullion Jewellers Association says, “The relaxation in excise duty for branded Ashok Chakra gold coins minted by the government is a positive move to promote the Make in India campaign.”
Contradicting Gadgil and Garg, World Gold Council (WGC) and Titan are not too enthused about the step as they don’t expect a major rise in demand for branded gold coins. “A 1 per cent excise duty cut will not make much of a difference. Branded coins are sold at a very low margin,” commenting on the move, WGC told the Financial Express. However, WGC acknowledged that this step will “surely boost investment sentiment.” Titan does not expect to see any increase in demand due to scrapping of excise duty on branded gold coins. “Branded gold coins form less than 10 per cent of total sales for jewellery companies,” Titan has reportedly said.
Excise duty of 1 per cent on branded gold coin was levied in 2011. “Many jewellers do not manufacture branded coins so there will not be any impact. However, we welcome the move,” said Bachhraj Bamalwa, Former President, All India Jewellery Federation. “Excise duty was exempted to those who manufactured coins, having purity of 99.5 per cent, with imported gold and have already paid Customs duty. Since MMTC was making gold coins under the Gold Monetisation Scheme, it was subject to one per cent excise duty,” a senior MMTC-Pamp (India) official said Indian Express.
According to Gadgil, such move will bring standardization in the market with respect to buying gold coins. He says, “The disparity amidst local jewellers to sell unbranded coins over branded ones at lower cost will now come to rest, customers will take pride in buying the Ashok Chakra embossed coins similar to the bald eagle and maple leaf embossed gold coins minted in America and Canada respectively.”