Indian Jeweller (IJ) Feb - March Issue

Policy & Market UPdate
World Gold council
to come up with
code of conduct for
indian jewellery
retailers
The World Gold Council (WGC) is slated
to come forth with a prescribed set of
principles, or a code of conduct, called the
Retail Gold Investment Principles, for the retail
jewellery sector in India. The move is likely to
bring in transparency in the sector, which has
been facing severe perception issues, in the past.
The global principles have already been put
up on the Council’s website, inviting comments
from all the stakeholders. The comments will
be interpreted and implemented based on the
requirements and
challenges of the
domestic gold
industry.
This will
basically provide
a platform for
stakeholders, and those willing to be part of the
initiative can conform to the code of conduct and
bring in some standardisation and transparency
in the industry.
While the principles will be global, the standards
will be locally tailored and put in place in
consultation with all the stakeholders. The WGC
is in the process of forming a steering committee
and are likely announce names of members by
April-May this year.
As part of this initiative, the Council will conduct
outreach programmes in various cities and get in
touch with jewellers big and small.
The Council will also put together a monitoring
mechanism, which would be crucial to ensure the
success of the platform. Once a company or a
jeweller signs up on the platform, it has to ensure
that nothing comes from the grey market and all
efforts, including a strong supply chain, are put
in place so that the customer feels safe. This will
help the industry raise money through bank and
institutional borrowing, because of the resulting
transparency.
Read Online
SBI supports insurance cover for
lending to jewellery industry
SBI stated that the presence of an insurance cover
will lower capital requirement of the industry for
jewellery exports. “Absence of an insurance cover is
hurting lending to the gems and jewellery industry by banks.
If there is an insurance cover, it will help the bank to lend
courageously to the sector,” SBI deputy managing director
(clients group-I) P N Prasad told presspersons.
Speaking at an event, organised in Mumbai, he said that
the exposure of SBI to
the jewellery industry is
around Rs 20,000 crore,
adding that the lending
growth to the sector has
been muted at present.
The SBI official said the “trust of the bankers in the gems
and jewellery industry is not there” because of its practices
“which had caused misery to the banks in the past”. The
gems and jewellery industry should be more transparent
in terms of ownership, management and valuation, Prasad
opined. Some kind of credit guarantee will give freedom to
the gems and jewellery exporters in the MSME segment.
Prasad also said that gold should be treated as a source of
investment in the country. For that, there is a need to create
awareness among the public. Read Online
Jewellers sent notices to pay
taxes on revenues earned
soon after demonetisation
Jewellers have received surprise tax notices asking them
to turn over money they made from customers who
scrambled to buy gold after Prime Minister Narendra
Modi’s 2016 ban on high-currency notes, according to a
dozen jewellers and tax officials.
When PM Modi announced a
sudden ban on Rs 500 and Rs 1,000
on November 8, 2016, to weed out
undeclared cash, clients thronged
jewellery stores clamouring for
necklaces, rings, bullion — anything
gold.
Tax authorities are within rights
to demand tax on past revenue, which takes time to
scrutinise, but it is highly unusual for officials to demand
the entire revenue as tax. Two senior tax officials said
the department has sent thousands of notices this year,
including jewellers, demanding an estimated Rs 1.5-2 lakh
crore in taxes. Read Online
34 | february-march 2020 | INDIAN www.indianjeweller.in
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