As Notes Return, Gold Buyers Go Back to Cash
Industry executives say people are switching back to using cash to buy gold, as they fear electronic sales would be tracked by the tax authorities; Cash sales expected to rise even more as RBI lifts withdrawal limit
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 .₹ 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 .₹ 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 of currency
sales would be scanned by the tax authorities
be treated on par with general goods
₹ 2 lakh will attract 1% TCS this week as the Reserve Bank of India has raised the cash withdrawal limit for savings account to .₹ 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 The limits on cash withdrawals from savings bank account will be withdrawn completely from March 13.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 furnishing PAN details. Cash pur- chase of gold whose value is less than .₹ 2 lakh is expected to increase from April as any jewellery which is worth more than .₹ 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 .₹ 2 lakh. The bill seeks to do away with the threshold of .₹ 5 lakh on jewellery purchases for applicability of TCS because the Union Budget 2017-18 has proposed to ban cash dealings of over .₹ 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 2 lakh in cash by splitting the transaction into smaller bills