Indian
gold traders feel Union Budget 2018 is "positive" for the sector. A
comprehensive gold policy to develop gold as an asset class and establishing
regulated gold exchanges have been cited as the "postives" by
Surendra Mehta, national secretary, India Bullion & Jewellers Association
(IBJA).
Certain
trade officials speculated whether as part of the gold policy a separate
regulator would be set up to regulate the trade and spot gold exchanges. Spot
exchanges in a state can be regulated by state authorities such as APMCs for agri spot
markets, etc. Some even speculate whether Sebi can get a remit to regulate a
spot gold exchange.
"The
budget has met all IBJA's demands like Gold policy, spot gold exchange and
tweaking of GMS," said Mehta. "The minimum crop price and free health
facilities will leave lot of surplus in hands of farmer and middle class, which
in turn would be spent on gold. Govt also moved gold from demrit goods to an
asset class, which is extremely positive for industry."
Budget 2018 Impacts:
Corporate tax relief for the
SME sector
Companies with a turnover of less than Rs 250 crore in FY17 would
be required to pay tax at 25 percent (and not at the erstwhile rate of 30
percent) in FY19.
Finance Minister Arun Jaitley in his Budget speech announced a
major change in corporate taxation rules. Though the amendment will be
particularly beneficial for the micro, small, and medium scale enterprises
(MSMEs), it does not offer any relief for big companies.
Companies with a turnover of less than Rs 250 crore in FY17
would be required to pay tax at 25 percent (and not at the erstwhile rate of 30
percent) in FY19.
Out of 4,721 Indian listed companies that reported their numbers
for the year ended March 31, 2017, 963 companies (20.3 percent of the
total) could be major gainers.The median tax rate for the above companies is approximately 34
percent for FY17. Consequently, the difference in tax rate (to the tune of 9
percent) is expected to improve their profit after tax margins, thus leading to
better earnings visibility.
