Dhanteras in June for gold trade

For India's gold trade, it was like having Dhanteras in June. The customary gold-buying rush associated with this festival, which falls on October 17, was witnessed in the last few days of June when customers flocked to jewellery stores in anticipation that the introduction of Goods and Services Tax ( GST) will increase the price of the yellow metal.

Sales in June spiked 60-100 per cent year-on-year, according to leading jewellers although they doubt that this momentum will sustain in the next quarter on account of GST.

Ahammed MP, chairman, Malabar Gold & Diamonds, told ET: “We have witnessed a 100 per cent increase in sales in June, com pared to the previous month and on a year-on-year basis, across showrooms in the country , both for gold and diamonds.

Gold has fared especially better among the two. The strong perception among consumers about a possible hike in the prices of gold, coupled with international factors like growing preference for hard currency and falling rates, triggered this rush."

"But a 3 per cent GST rate, against the existing 1 per cent tax and 1 per cent excise duty, will not harm sales as there is only a 1 per cent increase in effect which will be adjusted against sales promotion and our customers will not have to pay anything extra. It is unlikely that the current buoyancy in sales will continue, once GST is effective. But, we hope for a reasonable 30 per cent growth in the next quarter," Ahammed said.