Gold jewellers record 20 pc surge from pre-GST sales

As per jewellers, many shoppers are making the most of the pre-GST week, to purchase gold at the existing rates, and even finishing off with their wedding purchases, slated for the post-Aadi season. 

Jayantilal Challani, President of Madras Jewellers and Diamond Merchants Association tells us, “The GST has been fixed at 3 per cent for precious metals like gold and silver, and precious stones like diamonds. This is a welcome move as no other category has been offered a tax bracket such as this. However, as the industry and consumers anticipate a rise in prices post GST, many shoppers have preponed their wedding purchases for the preGST season itself. We have witnessed a sales jump of at least 20 per cent over the past one week, thanks to shoppers who wanted to finish off their gold purchases almost two months in advance.” 

Usually, the Aadi season, which falls between July 15 to Aug 15, is considered a dry season for the gold jewellery sector, as people refrain from making purchases during this time. The wedding season, which follows immediately after is known to spur sales, followed by the Ayudha Pooja and Deepavali season.  Challani says, “The industry is expecting a jump of about Rs 400- 500 per sovereign of gold, once the GST comes into play. This has contributed to the rise in sales prior to the off season.” 

LKS Sarfaraz, the Director, LKS Gold House (P) Ltd, which has also witnessed an encouraging spike in walk-ins and sales over the past two weeks says, “Liquidating the stocks is the priority for most retailers at this point in time. Even the fashion industry has preponed its end of season  sale to this month, due to  the GST roll-out. The GST is not just a tax change for jewellers, it’s a complete transformation of the business’ profit making model. This time around, the retailers have to be accountable throughout the end to end journey of gold jewellery – right from the gold mine to the buyer’s hands.” 

Industry players have also highlighted the fact that teething troubles will be experienced in the first few months, post implementation, which would even out once the infrastructure is in place. According to S Santhakumar of SR Jewellery, Vadapalani, the twomonth relaxation provided by the Centre may not prove adequate enough for small time players who will have to migrate to a completely new system from scratch.