- Trading in Electronic Gold Receipt (EGR) has not started due to taxation issues.
- EGRs are like depository gold receipts traded on stock exchanges and held in demat accounts.
- The government announced the setting up of a SEBI-regulated gold spot exchange in the Union Budget 2021-22.
- SEBI introduced EGR and silver ETFs in September 2021, but EGR has been hindered by the GST issue.
- Large importers and bullion dealers have to deposit gold in exchange-designated vaults to generate EGRs.
- EGRs can be traded on the exchange platform or converted into physical gold.
- Gold bars imported into India cannot be moved or traded without paying a GST of three percent.
- The conversion of EGRs into physical gold may take months, locking up capital.
- The government cannot exempt GST on gold deposited at exchange-designated vaults for conversion into EGRs.
- Once taxation issues are resolved, EGRs will be a game changer for retail investors and the bullion industry.
Source: a2ztaxcorp.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
