 "A week after demonetisation, gold worth a billion dollar was imported. But, in the past couple of days, with the I-T department issuing 600 notices to jewellers, and also asking banks to report deposits, the thrifty \"business\" of transferring old cur")
Several small jewellers have given “stop import” orders to their banks, bringing down the amount of gold coming into the country in the past two days.
After Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes on November 8, some jewellers were selling gold at high premium for the old currency. However, the income tax department (I-T) announced that saving bank account deposits above Rs 2.5 lakh and current account deposits above Rs 10 lakh, between November 9 and December 30, would attract scrutiny. As a result, jewellers have cancelled their gold import orders.
This is only for small jewellers in the unorganised sector. Big jewellers still continue to import gold for their regular business activities.
A banker still getting import orders for gold from big jewellers said, “Our import is as usual and steady after Diwali.”
A week after demonetisation, gold worth a billion dollar worth was imported. But, in the last couple of days, with the I-T department issuing 600 notices to jewellers, and also asking banks to report deposits, the thrifty “business” of transferring old currency into gold has been hit.
The Indian Bullion and Jewellers Association had also written to jewellers a few days ago that the government could ban gold imports. Besides, the jewellers are wary of more crackdown on the bullion market, as PM Modi announced in Goa last Sunday that he would go after people with “black” money and his next aim would be benami properties.
Market observers said demand for gold was at the rock bottom even though the marriage season has started. Cash crunch across the country has significantly impacted demand.
As a result, gold premium, which went up to $10 as per National Commodities & Derivatives Exchange data on Tuesday, had dropped to just $2 per ounce.
Sources said though jewellers had stopped exchanging old currency notes for gold, some chartered accountants were still trying to help their clients transform their black money stashes into white wealth.
