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Traders watch out! Centre mulls limiting cash deals at Rs 50,000 in bullion

Retail jewellers may be exempted as customers are allowed to buy jewellery up to Rs 2 lakh in cash

Rajesh Bhayani  |  Mumbai 

Photo: Reuters
Photo: Reuters

traders may soon have to conduct all transactions above Rs 50,000 through banks, with the considering a proposal to limit cash deals to bring transparency in the trade.  

Retail jewellers, however, are likely to be exempted from the proposed move, as customers are still allowed to buy jewellery up to Rs 2,00,000 in cash without providing the permanent account number (PAN), sources close to the development said.

A large number of were under the scanner of the income tax (I-T) department over the spike in sales just after was announced on November 8. Many allegedly sold to customers at a huge premium by accepting the demonetised high-value currency. 

The I-T probe later found that many deals were made where bills were prepared in a different name and delivery went to another party. Such third-party deals led to another proposal suggesting that by an importer or a secondary seller has been against formal delivery order. This will ensure the dealer has received an order and is sold to the same buyer by accepting money through a banking channel. 

In future, when the allows spot exchange, compliance by dealers about dealing above board will be very helpful, the sources mentioned above said. The issue of smuggling is almost settled, with only an insignificant quantity of entering India unofficially. Hence, the demand for duty cut is not heard, “nor is considering any such move,” explained one of the sources. 

However, there was a proposal to ask dore refineries to import dore of purity less that 75 per cent content, but that seems to have not found favour among stakeholders. “Another solution has been proposed for this where refineries may be asked to import dore only through nominated agencies or banks,” the source said.

There is another issue of moving from a bank, which imports on behalf of the importer, and selling it to the second-stage dealer. Banks give delivery from vaults, but further trades are happening by hand carrying  

A proposal was made to sell by delivering it from vault to vault only. However, due to insufficient vault infrastructure and difficulties faced by small dealers in handling through vaults, apart from compliance cost, the proposal may be dropped and rather the current system of using angadiya network for transferring may continue.

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Traders watch out! Centre mulls limiting cash deals at Rs 50,000 in bullion

Retail jewellers may be exempted as customers are allowed to buy jewellery up to Rs 2 lakh in cash

Government is working on follow up measures to improve compliance by bullion trade. The proposal under consideration is to limit cash dealing among bullion dealers up to Rs.50,000 only and any transactions above that shall be through banking channel. The proposed move may not be applied to retail jewellers when they sale jewellery to customers as customers are still allowed to buy jewellery up to Rs.200,000 in cash without providing PAN. However jewellers buying from whole sales or goldsmiths buying gold bars from dealers have to be through banking channel above Rs.50,000 if the proposal is accepted.The move follows jewellers dealings which were in eye of storm immediately after demonitisation was announced when they heavily sold gold in cash at a huge premium by accepting high value currency notes which were withdrawn from the system on November 8 last year. In income tax raids that followed the premium gold sales by jewellers against withdrawn currency notes, in further scrutiny IT .
traders may soon have to conduct all transactions above Rs 50,000 through banks, with the considering a proposal to limit cash deals to bring transparency in the trade.  

Retail jewellers, however, are likely to be exempted from the proposed move, as customers are still allowed to buy jewellery up to Rs 2,00,000 in cash without providing the permanent account number (PAN), sources close to the development said.

A large number of were under the scanner of the income tax (I-T) department over the spike in sales just after was announced on November 8. Many allegedly sold to customers at a huge premium by accepting the demonetised high-value currency. 

The I-T probe later found that many deals were made where bills were prepared in a different name and delivery went to another party. Such third-party deals led to another proposal suggesting that by an importer or a secondary seller has been against formal delivery order. This will ensure the dealer has received an order and is sold to the same buyer by accepting money through a banking channel. 

In future, when the allows spot exchange, compliance by dealers about dealing above board will be very helpful, the sources mentioned above said. The issue of smuggling is almost settled, with only an insignificant quantity of entering India unofficially. Hence, the demand for duty cut is not heard, “nor is considering any such move,” explained one of the sources. 

However, there was a proposal to ask dore refineries to import dore of purity less that 75 per cent content, but that seems to have not found favour among stakeholders. “Another solution has been proposed for this where refineries may be asked to import dore only through nominated agencies or banks,” the source said.

There is another issue of moving from a bank, which imports on behalf of the importer, and selling it to the second-stage dealer. Banks give delivery from vaults, but further trades are happening by hand carrying  

A proposal was made to sell by delivering it from vault to vault only. However, due to insufficient vault infrastructure and difficulties faced by small dealers in handling through vaults, apart from compliance cost, the proposal may be dropped and rather the current system of using angadiya network for transferring may continue.

image
Business Standard
177 22

Traders watch out! Centre mulls limiting cash deals at Rs 50,000 in bullion

Retail jewellers may be exempted as customers are allowed to buy jewellery up to Rs 2 lakh in cash

traders may soon have to conduct all transactions above Rs 50,000 through banks, with the considering a proposal to limit cash deals to bring transparency in the trade.  

Retail jewellers, however, are likely to be exempted from the proposed move, as customers are still allowed to buy jewellery up to Rs 2,00,000 in cash without providing the permanent account number (PAN), sources close to the development said.

A large number of were under the scanner of the income tax (I-T) department over the spike in sales just after was announced on November 8. Many allegedly sold to customers at a huge premium by accepting the demonetised high-value currency. 

The I-T probe later found that many deals were made where bills were prepared in a different name and delivery went to another party. Such third-party deals led to another proposal suggesting that by an importer or a secondary seller has been against formal delivery order. This will ensure the dealer has received an order and is sold to the same buyer by accepting money through a banking channel. 

In future, when the allows spot exchange, compliance by dealers about dealing above board will be very helpful, the sources mentioned above said. The issue of smuggling is almost settled, with only an insignificant quantity of entering India unofficially. Hence, the demand for duty cut is not heard, “nor is considering any such move,” explained one of the sources. 

However, there was a proposal to ask dore refineries to import dore of purity less that 75 per cent content, but that seems to have not found favour among stakeholders. “Another solution has been proposed for this where refineries may be asked to import dore only through nominated agencies or banks,” the source said.

There is another issue of moving from a bank, which imports on behalf of the importer, and selling it to the second-stage dealer. Banks give delivery from vaults, but further trades are happening by hand carrying  

A proposal was made to sell by delivering it from vault to vault only. However, due to insufficient vault infrastructure and difficulties faced by small dealers in handling through vaults, apart from compliance cost, the proposal may be dropped and rather the current system of using angadiya network for transferring may continue.

image
Business Standard
177 22