Gold Price
The government may increase the GST rate on gold and silver from 3 percent to 5 percent. Earlier, the government had reduced the customs duty in the budget. Due to this, the price of gold had fallen to a great extent. According to industry experts, the cut in customs duty could be a big sign of the GST rate hike.
Finance Minister Nirmala Sitharaman mentioned simplifying and rationalizing GST rates in the budget. GST rates are likely to increase from 3 percent to 5 percent. Kedia Commodities Director Ajay Kedia said the government is likely to increase the GST rate on gold and silver to 5 percent. An increase in the GST rate can offset the revenue loss to some extent.
Income of state governments will increase
The increase in GST rates is good news for the state governments as the increased rates will give them more tax revenue than their share of central tax revenue.
Somasundaram PR, former regional CEO of the World Gold Council for India, said state governments could be more motivated to take action against gold smuggling as they get a bigger share of tax revenue.
Why did gold prices rise?
Geopolitical tensions are responsible for the rise in gold prices. Ismail Haniyeh, one of the top leaders of Hamas in Iran, was assassinated. Israel, which is already at war with Hamas, is accused of murder. After this incident, the tension between the two major countries of West Asia, Israel and Iran, has increased.
On Friday, the price of gold had reached close to 71 thousand rupees. On Thursday, for the first time since July 23, gold touched the level of Rs 70 thousand. Gold prices fell by Rs 165 to close at Rs 69,954 per ten grams on Friday, according to MCX data. However, the price of gold had touched Rs 70,965 per ten grams during the transaction.
Silver
On the other hand, if we talk about silver, the price of silver saw a fall of Rs 101 per kg on Friday. There has been no significant decline in silver prices since July 23. Still, silver is down by Rs 6,522 from its July 23 high. However, on Friday, the price had come down to Rs 83,702.
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