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GST not to affect gold jewellery market, demand to grow by 9% in FY17: Icra

Gold demand is expected to grow by 9% in values & 6% in volumes during FY17

Press Trust of India  |  Mumbai 

gold, jewellery, ornaments, bangles
Demand is unlikely to be impacted by the GST rate which at 3% is only marginally higher than the earlier rates: ICRA

The demand is expected to grow by nine per cent in value during the financial year of 2017, following rapid formalisation of the sector, said in a report.

"The demand is expected to grow by nine per cent in values and six per cent in volumes during FY 2017," rating agency said in a report here.


said, the credit profile of organised is expected to improve with favourable demand outlook, improving their with rapid formalisation of the sector, and better financing environment with enhanced access to gold metal

According to ICRA, there has also been opportunistic buying by and traders for the next festive and wedding season ahead of the Goods and Service tax (GST) rollout, thus driving the sales in Q2 of CY2017.

"Following a tumultuous CY2016, demand has rebounded sharply in the last two quarters. Easing liquidity pressures with fading impact of demonetisation, extended wedding season, better output and rising levels have supported the growth. Further the demand is unlikely to be impacted by the rate which at three per cent is only marginally higher than the earlier rates," Senior Group Vice President Subrata Ray said.

The net tax outgo post-is in fact seen declining by one per cent for a retailer (where manufacturing is outsourced and input credit is availed) and increasing by 1.2 per cent (if credit is not availed), he added.

"This will trigger the to source from tax compliant suppliers and enabling them to claim input tax credit on and other services availed. The transition towards streamlining of supply chain will be challenging with some temporary impact on demand," he added.

also said there is likely to be consolidation in the near to medium term, where organised players may acquire smaller entities or enter into franchise agreements.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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