• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 15 mins The Most Annoying Person You Have Encountered During Lockdown
  • 25 mins Which producers will shut in first?
  • 7 hours Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 4 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 4 hours Real Death Toll In CCP Virus May Be 12X Official Toll
  • 4 hours How to Create a Pandemic
  • 17 hours WE have a suicidal player in the energy industry
  • 5 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 8 hours Death Match: Climate Change vs. Coronavirus
  • 1 hour Breaking News - Strategic Strikes on Chinese Troll Farms
  • 16 mins Where's the storage?
  • 3 hours KSA taking Missiles from ?
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

India Just Shocked The Gold Market With This Unexpected Tax Hike

I wrote a few weeks ago about record slowdowns in gold sales across India. With buyers in the world’s number-one consuming nation holding off on purchases ahead of an expected cut in import taxes from the federal government.

And yesterday we got the decision from India’s officials on the gold tax. Although it wasn’t at all what the market had hoped for. Related: Oil Giant Cuts Budget By 80 Percent And Suspends Fracking

Finance Minister Arun Jaitley presented the government’s gold plan as part of the annual federal budget. Saying that gold import taxes will remain unchanged this year – dashing hopes for a cut.

In fact, Jaitley actually announced an increase in taxes on gold sales. Saying that the government will add a sales tax of 1 percent to all gold jewelry sold in India.

Such a sales tax had been scrapped by the government four years ago. But is now being revived by officials with the stated aim of reducing gold consumption. Related: What Would Negative Interest Rates Mean for the Oil Market?

And that wasn’t the end of increased taxation on bullion. With Minister Jaitley also saying he will raise taxes on imports of dore gold bars – to 8.75 percent, from a former 8 percent.

Dore purchases had recently become a preferred way for India’s gold buyers to get a break on the 10 percent import tax for refined gold. But the new tax significantly narrows the arbitrage here.

All of which suggests that the government is very serious about reducing gold demand – in order to keep down the country’s current account deficit. Related: Electric Vehicles Could Soon Reduce Oil Demand By 13 Million Barrels Per Day

The increased taxes could also be aimed at driving buying away from physical gold. And toward paper instruments such as the gold-backed bonds recently introduced by the government.

Whatever the case, these measures are very likely to have a dampening effect on gold purchases in this key market. Watch for statistics on gold purchases to see how great the damage will be.

Here’s to sticking with it

By Dave Forest

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News