New tax could dampen India gold demand in short-term -WGC

New tax could dampen India gold demand in short-term -WGC
New tax could dampen India gold demand in short-term -WGC.(AFP)
Updated 07 July 2017

New tax could dampen India gold demand in short-term -WGC

New tax could dampen India gold demand in short-term -WGC

MUMBAI: A hike in taxes on gold sales in India could pressure short-term demand from the world’s No.2 consumer of the metal, the World Gold Council (WGC) said in a report.
Faltering appetite in a country where gold is used in everything from investment to wedding gifts could drag further on global prices, already trading near their lowest level in eight weeks.
“In the short-term at least, we believe (the tax) may pose challenges for the industry. Small-scale artisans and retailers with varying degrees of tax compliance may struggle to adapt,” the WGC said in a report published on Thursday.
As part of a new nationwide sales tax regime that kicked in on July 1, the Goods and Services Tax (GST) on gold has jumped to 3 percent from 1.2 percent previously.
There have been fears the tax increase could stoke under-the-counter buying and drive up appetite for precious metal smuggled into India, where millions of people store chunks of their wealth in bullion and jewelry.
Meanwhile, the WGC also said a government move to ban cash transactions over 200,000 rupees ($3,090) from April 1 could hurt gold demand in rural areas where farmers often purchase the metal using cash due to limited access to cheques and electronic payment systems.
Two-thirds of India’s gold demand comes from rural areas, where jewelry is a traditional store of wealth.
“(The transactions rule’s) potential impact isn’t entirely clear: it could curb gold purchases; it could encourage gold shoppers to buy smaller amounts of gold spread over more transactions; or it could push a large part of demand underground and encourage a black market in gold,” said the WGC.
The group kept its demand estimate for India at 650 to 750 tons for 2017, well below average annual demand of 846 tons in the past five years.
In the long-term, the GST will have a positive effect on the gold industry by making the sector more transparent and improving the supply chain, the WGC added.


Malaysia takes legal action against EU over palm biofuel curbs

Malaysia takes legal action against EU over palm biofuel curbs
Updated 17 January 2021

Malaysia takes legal action against EU over palm biofuel curbs

Malaysia takes legal action against EU over palm biofuel curbs
  • Palm oil constitutes 30 percent of the global oils and fats production

KUALA LUMPUR: Malaysia is taking legal action at the global trade watchdog against the EU and member states France and Lithuania for restricting palm oil-based biofuels, the government said.

The world’s second largest palm oil producer, which has called a EU renewable-energy directive “discriminatory action,” is seeking consultations under the WTO’s Dispute Settlement Mechanism, the Plantation Industries and Commodities Ministry said in a statement.

Minister Mohd Khairuddin Aman Razali said the EU proceeded with implementing the directive without considering Malaysia’s commitment and views, even after Malaysia gave feedback and sent economic and technical missions to Europe.

The EU directive “will mean the use of palm oil as biofuel in the EU cannot be taken into account in the calculation of renewable energy targets and in turn create undue trade restrictions to the country’s palm oil industry,” he said in the statement.

The ministry filed the WTO request with cooperation from the Attorney General’s Chambers and the International Trade and Industry Ministry, taking action it had warned of in July against EU Renewable Energy Directive II.

Malaysia will act as a third party in a separate WTO case lodged by neighboring Indonesia, the world’s biggest palm oil producer, as a sign of solidarity and support, the ministry statement said.

Indonesia and Malaysia, together account for 85 percent of the global output of palm oil. Palm oil constitutes 30 percent of the global oils and fats production, and plays a significant role in fulfilling the demand in the global oils and fats market.

It is the world’s most produced and traded edible oil, and its versatility can be seen through its use in a wide range of food and nonfood products, which led to the remarkable palm oil consumption growth.

The US imported approximately $410 million of crude palm oil from Malaysia in 2020, CNN reported.