Page 20 - Bullion World Issue 12 Volume 05 December_2025

Bullion World | Volume 5 | Issue 12 | December 2025

c. The spot exchanges cater to the investment centres and gold refineries .Presently most of the
segment of gold demand, diverting the physical bullion bars sold in the market are in 1 kg form,
demand to demat format, which will ultimately which is beyond the reach of small jewellery shops.
help in reducing import of bullion for investment However in a spot exchange, small jewelers can
purposes. China’s physical demand for gold is buy quality certified bullion, with Gst input credit,
1000 tonnes, whereas in Shanghai Gold Exchange, at transparent spot prices, in quantities as low
the trading volumes are 40,000 tonnes of gold per as 30 gms, against their daily jewellery sales,
annum taking away their risk of gold price fluctuations, if
and when their purchases are delayed for want of
d. Supply of locally refined gold to the spot sourcing in small quantities.
exchanges, for monetization purposes, that too
in demat form, will increase the physical supply f. The potential of increased supply of old gold,
of gold in the vaults, enabling the banks to buy getting converted to refined bullion bars, shall cut
local bullion for GML - gold metal loan purposes, down the country’s gold imports, thereby saving
replacing the import of bullion used for GML billions of precious foreign exchange and CAD.
purposes. Availing GML from domestic gold is
more economical for the jewelers, because they g. The Govt shall be getting more GST revenue
save on the hedging expenses connected with from the sale of old gold happening at registered
imported gold to safeguard against fluctuations dealers, for its further conversion to refined
in gold ounce rate and the Rupee dollar exchange bullion, with a near term target of additional 300
rates. tonnes of recycled gold per annum, ie 1% of the
estimated 30,000 tonnes of idle gold holdings lying
e. Better business revenue for stake holders: Bringing with house holds and institutions (presently 3000
more of old gold into recirculation offers immense tonnes ie 10% of the same is under mortgage for
business revenue /processing charges for the gold loans and it often gets diverted to the grey
stake holders such as jewellery shops, assaying market for monetization).

In the coming Union budget, the industry is looking forward to the
Govt for supportive policies :

1. Waiver of capital gains tax on sale of old gold to GST registered
gold dealers, upto a limit of 500gms per family.
2. Early roll out of GST refund mechanism for EGRs sold at the gold
spot exchanges

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