Malabar Gold & Diamonds: illegal trade is harming Kerala’s gold industry

By

Isabelle Crossley

Published
Jul 1, 2019

Illegal gold trade has been exacerbated by goods and services tax regulations and is harming Kerala’s gold jewellery industry, according to Malabar Gold & Diamonds.

Kerala’s fine jewellery businesses are seeing a 25 to 30 percent decrease in business per year on average, according to Malabar Gold & Diamonds’ chairman Ahammed MP who spoke with ET Bureau. Ahammed MP also said that the gold jewellery trade has been struggling since the introduction of the GST in July 2017.

“While one-country, one-tax is an idea whose time has come, the maze of taxes has left enough space for unbridled and illegal shipment and sale of gold and gold ornaments in the domestic tariff area, distorting prices and upsetting the plans of legally run businesses,” Ahammed MP told ET Bureau.

“A back-of-the-envelope estimate shows that both single shop and large gold retail chains like us are losing business to the tune of 25 to 30 percent on the average per annum as the illegal trade is chipping away at our business, playing the price arbitrage card.”

The All India Gem & Jewellery Domestic Council also recently raised the issue of gold smuggling. The organisation petitioned the government to lower the customs duty on gold from its current rate of 10 percent to four percent and said that this will help to reduce gold smuggling.