Budget 2012: Jewellers body seeks abolition of gold ETFs

KOLKATA: National jewellers body All India Gems and Jewellery Trade Federation (GJF) has suggested abolition of gold ETFs to prevent the shift from buying the precious metal from jewellers.

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"We strongly recommend abolishing gold ETF investment in the country which is completely idle investment ... GJF also recommends introducing 25 per cent commodity transaction tax (CTT) on ETFs," its chairman Bachhraj Bamalwa said here today.

Gold ETFs are exchange traded funds of gold and a person can hold units of gold in demat form in more cost effective manner. The funds also offer liquidity on stock exchanges.

Previously investment in gold was done in the form of jewellery, Bamalwa said adding jewellers have lost business by 30-50 per cent since October, 2011.

According to GJF, 25-30 per cent of gold imports are being diverted to gold ETF investment. In 2011 the import was pegged at 969 tonne.

GJF in its budget suggestion asked for increasing the limit of gold buying to Rs 25 lakh from the present Rs 5 lakh which would require furnishing of the PAN card.

The federation, however, expressed satisfaction on the government's clarification on imposition of excise duty on branded jewellery.