By Admin 
Gold Price: There has been a decline in the prices of gold and silver for the last few days, but the prices are expected to increase once again. Actually, China has abolished tax exemption on purchase of gold. The Finance Ministry here said that from November 1, retailers will not be able to avail Value Added Tax (VAT) exemption on the sale of gold purchased from the Shanghai Gold Exchange, whether it is sold directly or after processing. Due to this decision, amid the increasing demand for gold in China, its prices will increase by three to five percent.
Why was this decision taken?
This decision has been taken at a time when China’s real estate market is sluggish and economic growth has also slowed down. Now, with the removal of VAT on gold, the government’s earnings will increase. However, due to this change, the price of gold in China will increase and it will become expensive for people to buy it. China is the largest consumer of gold in the world. The increase in price will lead to a temporary decrease in demand, which may increase pressure on gold at the global level.
What does the New Testament say?
After the implementation of the new rule, now after purchasing gold from the exchange for investment purposes, refund will be issued by the exchange after taking delivery from the warehouse. However, if the same gold is used and sold in the form of bars or coins, then VAT will have to be paid on it and the exchange will not issue refund. If exchange members buy gold for non-investment purposes, they can claim a refund of 6% VAT paid. Similarly, if a customer buys gold directly from the exchange, then VAT will not be charged on it, but VAT will have to be paid on selling it.
What will be the impact on India?
In the last few months, due to the rapid buying of gold, its prices had reached a record high level. Gold had gone into the ‘overbought zone’. But later, after profit booking, reduction in global tension and decline in domestic demand after the festive season, there has been a sharp decline in the prices, but now due to this decision of China, the prices may increase once again. Its effect can be seen in India also. According to the estimates made by experts, this may lead to a rise of 3-5 percent in the price of gold in the country.
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