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

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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

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