Customs' 3%IGST forces India's gold imports to 15 metric tons
India's gold imports just dropped to their lowest in nearly three decades: only about 15 metric tons are set to come in this April.
The sudden drop happened after customs began demanding a surprise 3% integrated goods and services tax (IGST) on gold imported by banks, which usually handle most of the country's gold imports.
Since banks were not ready for this change, many stopped clearing gold at customs, and only limited deals went through the India International Bullion Exchange.
April imports fall to $1.3 billion
Despite Akshaya Tritiya, a festival when gold buying usually goes through the roof, import values crashed to $1.3 billion in April, way down from the typical $6 billion.
Jewelers have started sourcing smaller amounts of gold through new channels while waiting for clarity on taxes.
Plus, with a fresh 3% integrated goods and services tax (IGST) demand on gold imported by banks, it looks like buying gold might stay tricky for a while as the government tries to control imports and steady the rupee.