GJEPC suggests changes to R-GDS to make it more attractive

New Delhi: The Gems and Jewellery Export Promotion Council (GJEPC) has proposed changes in the revamped gold deposit scheme to make it more attractive, enable its larger acceptance and garner additional deposits of idle gold in the country.

The council suggested changes to the Revamped Gold Deposit Scheme (R-GDS) in a video conference with Tarun Bajaj, Secretary in the Department of Economic Affairs, recently, the GJEPC said.

The Revamped Gold Deposit Scheme, which was formulated to mobilise and productively use idle gold held by households and institutions (estimated to be over 24,000 tonnes),

has not yielded the desired results, garnering deposits of only around 20 tonnes of gold, the council said.

GJEPC Chairman Colin Shah said the R-GDS has not been highly successful because of a host of factors, including apprehensions from an income tax standpoint, trust deficit amongst various stakeholders, lack of geographical reach of banks, lack of commercial lucrativeness, a lock-in period, and penalty

on premature withdrawal, among others.

The council has proposed to link the R-GMS with the Income Tax Act which states that gold jewellery to the extent of 500 grams per married women, 250 grams per unmarried women and 100 grams per male member of a family need not be seized.

"GJEPC has suggested that limits specified under Central Board of Direct Taxes Circular should be revised, through the R-GDS Circular, to the extent of 1 kg for a married woman, 500 grams for an unmarried woman, and 200 grams for a male family member," Shah said.

If these limits are maintained under the GMS scheme, no GST or capital gains tax should be charged, he added.

The council has also recommended that market tradable e-deposit certificates can be issued to the depositor having attributes like a unique certificate number accounted for digitally, under the R-GDS, in Demat format.

It said the certificate should have an in-built tracking mechanism, providing details of the original depositor,

all subsequent holders, tenure of deposit and interest rate and mode, etc.