Bullion Bulletin

Volume 8 Issue 4 DOP 6 April 2018

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ND2 ASIA PACIFIC PRECIOUS METALS CONFERENCE 2018

3-5 June 2018, PARKROYAL on Beach Road, Singapore

Bank Scam: A Chance for Gold Industry to Restore its Dignity?

Ahammed MP, Chairman, Malabar Gold & Diamond

Different Way to Buy your Gold

Debajit Saha, Editor, Bullion Bulletin

Silver in the Spotlight

Marcus Garvey, ICBC Standard Bank

12

14 Gold is Looking Weak below $1300

G. Chandrashekhar, Senior Journalist

20 Gold Outlook, Kedia Commodity

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Volume 8 Issue 4 DOP 6 April 2018

Dear Readers,Industry stakeholders met on 14th and 15th of March in Mumbai during India International Bullion Summit organized by IBJA for having a round of discussion on gold policy and related trade issues. The theme was "Comprehensive Gold Policy for India for the betterment of trade across the value chain". Topics deliberated include improving transparency in gold and jewellery retailing, need for robust hallmarking system, revamping of GMS, growing refinery ecosystem and financing against gold. WGC observed that in the year 2017, Indian refiners imported around 245 tons of ‘unrefined gold’ or popularly known as ‘dore’. Local refiners recovered around 88 tons of gold from ‘jewellery’ scrap. Combined, it is estimated that around 40 percent of country’s demand is met by refineries. This is highly encouraging data on domestic refinery industry and its prospects.

Participants also debated on the requirement of a single regulator to oversee the trade. At present, various government bodies regulate various aspects of the sector. A single regulator can expedite the process of resolving issues in various trade segments and put in place the required regulations so that trade competitiveness can increase. Forming a single regulator has been a demand for the stakeholders for few years now. It is to be seen what government decides this time. It is heard from Commerce Ministry that work has started on creation of a Gold Board as per the advice of the Finance Ministry.

Minister of State for Commerce and Industry C R Chaudhary said in a written reply to the Lok Sabha that government is not thinking of any change in gold policy at present. Therefore, there is no possibility of a reduction in import duty on gold as demanded by the gems and jewellery sector and of course recommended by Niti Aayog. Substantial rise in import despite high duty has convinced government that import duty is not a deterrent to demand. Trade data show that India imported $30.89 billion worth of gold in the current financial year till February, 2018, which is already higher than $27 billion in FY 2016-17. It means, total import will come around close to $32 to 33 billion in the FY 2017-18. It may again ignite the issue of CAD caused by higher gold import. However, India’s CAD is expected to remain around 1.5% of GDP as per market estimate, not as alarming as 2012-13 in our view.

Let’s now see how the gold jewellery export sector has performed this year! According to GJEPC, total gold jewellery export from Apr’17 till Feb’18 stands at $8659 million. India’s gold jewellery export has been coming down since 2012-13 when the country exported jewellery worth $13,267 million. India failed to touch $10,000 million since then. We have to remember that after 2012-13, government has tightened gold policy owing to ballooning CAD. This might have resulted in substantial drop in gold jewellery export (as import duty constantly remained high till today). In our opinion, there is a need to look specific aspects of gold policy that would encourage export.

Best wishes for a great year ahead! Debajit SahaEditor

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| Volume 8 | Issue 4 | DOP 6 April 2018

Bank Scam: A Chance for Gold Industry to Restore its Dignity?

Ahammed MP, Chairman, Malabar Gold & Diamond

The Punjab National Bank scam has come as a bolt from the blue for the gold industry and at the wrong time. The industry, after a tepid 2017, was limping back to normal and hoping for a better year in 2018. A broad-based global recovery, with uptick in demand and prices, was strengthening these hopes. Domestically also, the pangs of the uniform tax code and demonetisation were ebbing out. Headwinds were slowly giving way to tailwinds. News of a 7.2 per cent economic growth at home should have lifted sentiments, but there came the scam.

The industry was looking forward to the follow-ups on the budget announcement about a comprehensive gold policy to restore the metal as a strong asset class. Reports suggest that a committee of the Niti Aayog has made positive recommendations, including tax cuts and a liberalised approach towards gold, so that its contribution to GDP goes up to 3 per cent by 2022. The

report takes a positive view on many core areas like promotion of gold mining and setting up of a gold board with statutory powers to resolve all issues through a single window mechanism. But now, this move will get stuck in this crossfire of scam and all efforts for a gold policy would be put on the backburner.

The biggest fallout of the scam is not on the credit exposure to the gold industry, but the wrong perception cast on the gold and diamond business. All those in gold trade are not bad sheep. The entire sector cannot be punished because of a handful of tainted people. The industry, 90 per cent of which are medium and small units, employs 6.1million people. Gold trade is the second-largest foreign exchange earner. Banks should take into consideration all aspects of an organisation, including the business model and capability to repay the money, before sanctioning a loan. Genuine transactions should be encouraged as such deals will accelerate economic growth.

We can anticipate tightening of credit flows to the sector, though gem

and jewellery still account for only a fraction of total lending. According to RBI data, bank loans to the gems and jewellery sector as of December 2017 stood at Rs 69,000 crore which translates to less than 1 per cent of the gross bank credit of Rs 73 lakh crore. We must be prepared for a delay, additional documentation, extra guarantees etc in securing loans. That is fine for genuine players who depend on banks for short-term financing. But tight liquidity should not lead to job cuts in the sector due to fall in production.

More importantly, how long will it take to change the bad reputation thrust on the sectors. We can take this as a positive opportunity to cleanse the system and bring in better transparency. The industry is all for transparency. The onus is on the government which has to finish the good works initiated, by announcing a comprehensive policy in line with the recommendations of Niti Aayog. The industry and government should take steps to eliminate the black sheep and weed out undesired elements, including illegal smuggling of gold.

According to RBI data, bank loans to the gems and jewellery sector as of December 2017 stood at Rs 69,000 crore which translates to less than 1 per cent of the gross bank credit of

Rs 73 lakh crore. We must be prepared for a delay, additional documentation, extra guarantees etc in securing loans. That is fine for genuine players who depend on banks for short-term financing. But tight liquidity should not lead to job cuts in the

sector due to fall in production.

Disclaimer: Views are personal and not the views of the publisher.


Volume 8 | Issue 4 DOP 6 April 2018 |

Different Way to Buy your GoldDebajit Saha, Editor, Bullion Bulletin

Little to say about India’s love affair with gold. India consumes around 750 to

800 tons of gold in a year and there is no denying of the fact that this consumption will continue. Majority of this gold is consumed through form of jewellery and this tradition again will continue. It will continue because gold is considered as ‘auspicious’ and it is bought for the well-being. It is an age-old tradition and a tradition normally takes enormous time to change if it intends to be, or, to say, some traditions never change. Fair enough!

India’s social structure is perfectly fit to accommodate gold jewellery inside its system. India’s is a society which follows religious customs and beliefs closely and in that respect

our marriages, festivals, other social functions cannot be complete without jewellery, primarily made out of gold. This gold is additionally considered as store of value which can be utilized for many reasons in future as gold is as good as ‘liquid currency’.

If it is the state of affair, then what is a point here for any discussion! Well, there are other options available in India today through which people can buy gold, and here we need to enlighten ourselves a bit. This gold certainly does not serve the purpose of social obligations, but certainly serves the purpose of second point mentioned earlier and that is ‘store of value’. Gold bought through these new options are equally liquid and easily encashable at times of need, besides, it is cheap and easy to hold securely. Yes, I am talking about some of the new products available in Indian market, viz, gold ETF, sovereign gold bond and digital gold.

Gold ETFTo talk about gold ETF, well, it has been a tremendous success in the west since it was introduced in 2003. Structurally, Gold ETF is a unique investment product, where units (securities) are issued to investors against the gold stored physically in a custodian vault. These units are

tradeable on the stock exchanges. Introduced in 2007 in India, gold ETF gained traction during the bull-phase of gold market until 2011. At the peak over 40 tons of gold was accumulated under the scheme. However, high transaction costs and fall in gold prices have eroded their popularity in recent times. The failure is not only visible in India, but also across Asia. Asia is largely a physical market where jewellery is the most preferred form of holding gold, when West is an investment market where gold is considered as an ‘asset’. World Gold Council data shows, as of 28 February, 2018, total gold holding in ETF stands at 2393.4 tons, and out of which, only 90.7 tons are held in Asia. It means Asia has a big scope to build this product and India and China can play the most important role as these two countries consume half of total gold consumed in a year. Trading in gold ETF is as simple as trading in equity and any individual having online ‘trading and demat’ account can trade in gold ETF. National Stock Exchange of India (NSE) also stopped promoting Gold ETF on behest of government when country faced huge CAD problem and since Gold ETF calls for physical holding of gold, government discourages this product along with suspending selling of ‘imported’ gold coins and bars in banks.



Sovereign Gold BondSovereign Gold Bond is the new product launched in November 2015. This is a unique product having a sovereign guarantee which means, investors cannot lose money. Investors are assured of getting 2.5% interest per annum payable semi-annually on the nominal value. Investors will also get all the benefits of any price appreciation of gold at the time of maturity. The bond is exempted from GST, which otherwise buyers have to pay if they wish to buy physical gold. This gold again is cheaper than physical gold. On the taxation side, if an investor holds the gold till maturity, capital gain tax is exempted. This gold can also be sold now pre-maturely in the exchange, however, this will attract 20 percent capital gain tax. If we set aside the taxation part, this phenomenon enables investors to sell its gold if there is any sudden need of capital requirement. It again proves holding gold in paper form is as similar as holding in physical gold. Holding gold in physical form is non-yielding, fear of theft if it is kept

at home or to bear a yearly cost if it is secured in bank vault. Sovereign gold bond on the other hand is an assured ‘yielding’ asset, and since no physical gold is involved here, investors do not have fear of theft or to pay vaulting charge to secure the asset. Additionally, provision has been given that bond can be used as collateral for loans. The loan-to-value (LTV) ratio is set equal to ordinary gold loan mandated by the Reserve Bank of India.

As per the data available from Reserve Bank of India, till January 4, 2018, the central bank, in consultation with government of India, has issued 21 tranches of Sovereign Gold Bonds for a total value of approximately Rs. 6650 crores or little over $1 billion. This translates into roughly 22 tons of gold. SGB is absolutely a different asset class as investors will definitely earn the assured interest on the investment; depreciation or appreciation of asset price is part of market process and one should not calculate that part while investing in

SGB as market risk is applicable to physical gold as well.

Digital Gold‘Digital gold’ is another option available in the market which investors can look for. This is becoming very popular in many parts of the world and in India, too, it is now available. In all the places in the world, it is designed basically to serve lower to middle income group who cannot invest large amount in physical gold; it is designed as a product where people can invest in small quantity, gold is held in a vault on allocated basis, and so on. This gold does not provide interest like SGB but enables investor to buy anytime in smallest quantity whenever it is possible.

How is it so? Let’s understand the concept. In India, Paytm gold is offered in popular Paytm app where investors can buy gold as low as Rs. ‘1’. Similar is available now on another popular app ‘PhonePe’. These products are still at its infant stage, and no substantial trade data is available. For example, Paytm started the digital gold service in April 2017 (this gold is actually offered by MMTC PAMP, a LBMA accredited refiner). In the first six month of its launch, it facilitated total sale of $18.4 million. This number is absolutely tiny if we compare India’s total gold market worth more than $30 billion. However, considering the 340 million smart phone users in India at present and as per the projection, it will rise to 468 million by 2021, there is big

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1000.1

90.7 41.30

200

400

600

800

1000

1200

1400

North America Europe Asia other

in to

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Source: World Gold Council. As of 28 Feb, 2018

Total Gold Holdings in Global ETFs



market ahead for promoting digital gold. The ‘digitally’ held gold does not call for mandatory delivery; rather it can be encashed in local currency at any point of time. Though keeping gold in digital form bears some cost, it is still cheaper than buying jewellery. India’s tech-savvy new generation can utilize the digital gold as an effective vehicle for long-term investment.

Comparative characteristics of different paper products on gold

Gold ETF Sovereign Gold Bond Digital Gold

Minimum purchase required 1 gm of gold

Minimum purchase of 1 gm of gold Minimum of Rs. 1

Investors can redeem the units in 1000 gm in physical gold

As it is a bond, redemption takes place in maturity

Minimum 1 gm of gold can be redeemed in physical gold

Units can be sold in exchange at any point of time. Physical delivery is not mandatory

Units can be sold in exchange before maturity

Anytime gold can be sold

Fund house charges storage cost No storage cost is applicableStorage and insurance cost are charged

GST is applied in price GST is not applied GST is applied in price

It can not be used as collateral for loans

SGB can be used as collateral for loans.

Digital gold units does not qualify as collateral to loan

There is no restriction of holding gold units in ETF for an individual investor. An investor can accumulate as many units he/she wants.

No investor/HUF can purchase more than 4 kgs of gold in a single fiscal. For Trust, limit has been set at 20 kg per fiscal.

No such limitations are applicable here

No interest is paid on holding

Interest is paid semi annually to the bank account and the last interest will payable at maturity along with the principal.

No interest is paid on holding

If an investor sold gold ETF in profit after three years, long term capital gain tax of 20% is applicable. Gold ETF also attracts short term capital gain tax as per investors’ tax slab.

Interest on the bond is taxable as per Income Tax Act 1961 (43 of 1961). Capital gain tax on redemption is exempted. However, if it is sold before maturity, capital gain tax of 20% is applicable.

Both short and long term capital gain tax is applicable.

ConclusionTime has changed. India’s economy is one of the fastest growing in the world. Average age of workforce is 35 years. For a young developing country like India, it is a tremendous opportunity to look at gold differently. It is a timeless asset; it is time to change our approach. While jewellery stands for a piece of adornment, it is time that people must take judicious decision while investing in gold. Paper gold is always cheaper than physical gold while it comes for investment and this gold is meant for investment by design. It is time to define the purpose and act accordingly.

Disclaimer: Views are personal and not the views of the publisher.



Silver in the Spotlight Marcus Garvey

As discount to gold returns to the 1990s • The gold / silver ratio has been hovering around

80 in recent weeks, a level above which it has not sustainably traded since the early 1990s. Inevitably, given the historical precedent, this has raised the question of whether bullion investors are being presented with a contrarian opportunity to position for a reversal.

• In the very short-term, we think the answer is yes but, over time, we see few reasons to believe that the ratio is subject to any kind of cap.

As discount to gold returns to the 1990s The gold / silver ratio has been hovering around 80 in recent weeks, a level above which it has not sustainably traded since the early 1990s. Inevitably, given the historical precedent, this has raised the question of whether bullion investors are being presented with a contrarian opportunity to position for a reversal.

In the very short-term, we think the answer is yes but, over time, we see few reasons to believe that the ratio is subject to any kind of cap.

Gold/Silver ratio approaching historical highs

Source: ICBC Standard, Bloomberg

Source: ICBC Standard, CFTC, Comex, Bloomberg

Regarding the short-term, money managers’ positioning in silver futures is now materially net short, as highlighted in the CFTC data.


Within this, the net position has been driven by both the addition of c.40k lots of fresh shorts and a continued decline in length to just 60k lots. This positioning is not extreme - to classify in that bracket would arguably require money managers to hold an unprecedentedly large short - but clearly creates the scope for a positioning driven correction.

Driven by a combination of both active shorts and gradually reduced length

As money managers position net -short in silver futures

And, when considered against money managers’ positioning in gold, there is a case for a short-term reversal in the spread, due to the yellow metal’s comparatively light positioning.




Beyond this, however, we find few reasons to believe that the ratio is subject to any kind of limit. Neither the gold nor silver price is independently trading at unprecedented levels and the key driver of the widening price spread is not an acute issue but rather silver’s chronic multi-year underperformance.

But, in isolation, neither the gold nor silver price is at unprecedented levels


Something which has occurred despite very steady ETF holdings around 650 Mozs. So one could hardly argue that long-term holders have given up on the metal.

Silver’s underperformance in spite of steady ETF holdings

Moreover, there is nothing in the current swap rates or physical leasing market - which, largely driven by Libor rises, have trended higher together over the past year - to explain silver’s lacklustre performance.

Little to separate the two metals’ swap rates


And, finally, we find no clear correlation between levels of market volatility and the gold / silver ratio. So there is little to suggest that silver is a better holding for investors who want exposure to precious metals but with higher volatility than gold usually delivers.

Gold / Silver ratio has limited correlation to levels of market volatility


In sum, therefore, we do see scope for a positioning led near term reversal but, over time, find few reasons to justify any kind of financial market cap to the spread between the metals. Once positioning has cleaned, we could well be going back to the 1990s. ............................................................................................Disclaimer This is a marketing communication which has been prepared by a trader, sales person or analyst of ICBC Standard Bank Plc, or its affiliates (“ICBCS”) and is provided for informational purposes only. The material does not constitute, nor should it be regarded as, investment research. It has not been prepared in accordance with the full legal requirements designed to promote independence of research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

In contrast to the relatively neutral money manager position in gold




Gold is Looking Weak below $1300G. Chandrashekhar

Gold prices have remained strongly tied to the US dollar and it has been in evidence in

the first quarter of 2018. If significant weakness in the dollar in recent months boosted gold, geopolitical tensions accelerated the price rise, reaffirming the metal’s safe haven appeal. But now, both the support factors are waning gradually.

In recent weeks, concerns over trade war escalated. It was triggered because the US imposed tariffs on steel and aluminium imports and China started retaliatory action. The potential for a fierce trade war was never in doubt. If anything, China is capable of going well beyond tariff restrictions, under exigent conditions.

US President Trump’s aggressive Iran policy was another factor that lent strength to gold prices.

Be that as it may, after rising to multi-week highs, gold has fallen back as global trade worries are subsiding. However, concerns over a potential trade war remain which will continue to lend

support to the yellow metal until the situation normalizes.

Fed tightening will ultimately weigh on gold prices. After the widely expected hike on March 21, the dollar did not rise as anticipated, but shrugged off the effect. But now conditions are beginning to ripen for four rate hikes this year, instead of three. That is sure to lend strength to the greenback which in turn will impact gold prices over the coming months.

Interestingly on March 28 and 29, the yellow metal lost considerable amount of value. Quite apart from easing of geopolitical tensions and firming of the dollar, less-committed gold bulls booked profit.

Very clearly, gold would continue to receive support from ongoing, albeit somewhat easing, geopolitical tensions. But the outlook for the second half of the year is clouded. One negative factor is demand. Imports into two of the world’s largest consumers China and India have remained subdued.

Latest data from India and China showed divergent trends. Without doubt, China’s gold imports have remained robust; but it could be partially explained by Chinese New Year demand. The underlying demand appears to have weakened according to reports.

At the same time, imports into India have continued to soften, especially year on year terms. Gold prices in the local market have been hovering around Rs 30,000 per 10 grams. At this price level, demand begins to bite. Also, the aftereffects of

demonetization of high value currency as well as introduction of GST and stricter surveillance have caused reservation among buyers.

While the ongoing marriage season in India is likely to provide some support to subdued demand conditions, June to September are months of low sales as rural India would be busy in agricultural operations. So, the next big demand opportunity is post-September.

The southwest monsoon is a critical driver of Indian agriculture and rural incomes. So, crop conditions in the next Kharif season harvest and prices growers receive would impact demand for the yellow metal.

So on current reckoning, Fed rate hikes, potential for the dollar to strengthen further and reducing geopolitical tensions combined with enervated demand conditions in important markets will pressure gold prices down in the coming months.

As and when the price breaches the psychological $ 1300 an ounce level, the market may test the next lower level which is $ 1270/oz. It should be no surprise, if in the last quarter of this year, gold trades around $ 1250/oz or even lower subject of course to normal geopolitical conditions. ...................................................................(G. Chandrashekhar, senior journalist and policy commentator, is a commodities market specialist. Views are personal. He can be reached on +91 9821147594 and [email protected] )



PRESS RELEASE

PRESS RELEASE

15th March, 20187:00 p.m.

India Bullion & Jewellers Association’s (IBJA) annual event i.e. India International Bullion Summit (IIBS-5) was held in Mumbai on 14th & 15th March, 2018. More than 800 Bullion dealers & Jewellers attended this event.

Hon. Minister of Commerce informed the Jewellers that Govt. is working at strategy to increase the export of gold jewellery. He expressed concern over growth of gold Jewellery sector in spite of each village has a jeweller. Joint Secretary to Ministry of Commerce Shri Manoj Dwivedi explained how the Govt. is planning to make gold as an asset class and to increase the export of gold jewellery.

Key note speaker for the event was Mr. Aram Shishmanian, Global CEO of World Gold Council & Ms Ruth Crowell, Chief Executive of LBMA. Technical symposium was organised for the first time in the country, which saw huge interest. Many delegates from Dubai, Singapore, Hong Kong, USA also attended the IIBS-5.

The panel discussion included topics like Spot Gold Exchange, Gold Policy, Mandatory Hallmarking & Manufacturing Growth through Export. Presentations were also made for responsible gold Guidance, Option Trading in Commodities & Block Chain Technology.

“We are very happy to see the participation of Bullion Dealers & Jewellers in the Summit & let me assure that all the issue discussed here in shall be discussed & conveyed to Govt. so that same can be considered in implementation or frame work of Gold Policy” said Mohit Kamboj- National President of India Bullion & Jewellers Association (IBJA).

The event was also followed by 35 industry related Awards for the best in best of the industry. Lot of enthusiasm was seen in modus Operandi of proposed Gold Exchange & Govt. plans to make mandatory hallmarking. Some of the Jewellers expressed their concern on how gold will be made asset class as they foresee that PMLA shall be implemented soon.

IBJA plans to start Jewellers awareness campaign in the entire country by educating the jewellers through various small seminar & round table conference informed Surendra Mehta, National Secretary of India Bullion & Jewellers Association (IBJA).

“IBJA shall be entering its Centenary year and we have some big surprises in our centenary years for our members” said Mohit Kamboj, National President of IBJA.

PRESS RELEASE



Gold OutlookKEDIA COMMODITY

Gold prices continuous to hold gains since January 2018, making a gain of

6.15 percent as prices a made high of 30950.00 in March but missing 31000.00 level mark which we not seen since November 2016 as gold price has run into some stiff resistance at around the $1,356 mark on Comex as it did in the middle of February and has pulled sharply lower bringing to an end 4 solid days of gains but this could be only temporary and the chances of a longer rally are high. A potential trade war between China and the USA has been the catalyst for gold’s recent run and although the war of words between the 2 countries has somewhat eased, there are plenty of other destabilizing factors that is going to make gold attractive as a safe haven.

Prices also got support in March month after the U.S. Federal Reserve disappointed investors expecting more hawkish comments on interest rate rises. The Fed raised interest rates and forecast at least two more hikes for 2018 instead of three hikes, highlighting its growing confidence that tax cuts and government spending will boost the economy and inflation and spur more aggressive future tightening. The Trump administration's punchbowl

of tax cuts and government spending may leave the U.S. economy with a stinging hangover in two years, according to fresh Fed forecasts that show monetary policy moving into "restrictive" territory for the first time in more than a decade.

Volatility is back - The calm of equity markets across the world was rudely interrupted in February by a sudden spike in volatility which impacted virtually every asset class. Volatility across equities, bonds, currencies and commodities rose sharply during the month and remained elevated into March. For the month of February, gold equities declined 10.10%, while gold bullion fell a modest 2.08%. Volatility across many asset classes, including equities, Treasuries and currencies rose and remain elevated. Gold bullion was a singular exception, given that its spot volatility as measured by the Gold Volatility Index moved up by just under 3% from the beginning of 2018 to end the of February. By contrast, other asset classes experienced massive volatility increases of as much as 235% in the same time frame. The declining U.S. dollar and rising inflationary pressures continue to provide favorable tailwinds for gold bullion. Gold’s relative lack of volatility has not gone unnoticed by investors.

Key pointsMounting economic and geopolitical tensions as a result of the US-China trade war has fuelled a demand for gold across the globe. The price of the yellow metal was pushed to the highest this month as investors flocked to its safe haven. Following the global cues and increased demand, the gold prices increased, as the trade war fears between the US and China has dragged the US dollar down and make investors nervous.

• The Fed raised interest rates and forecast at least two more hikes for 2018 instead of three hikes, highlighting its growing confidence that tax cuts and government spending will boost the economy and inflation and spur more aggressive future tightening.

• The European Central Bank (ECB) is now buying EUR 30bn worth of assets each month. It is likely to taper this program in the fourth quarter of this year, and raise interest rates in 2019. Market expect the Bank of England (BoE) to raise rates in the second quarter of this year.

• Markets remain relatively immune to political risks, and investors appear unwilling to price in probabilities of



extreme tail events. US political noise is likely to be ignored by markets for now. Italian political developments are likewise less of a concern for investors.

• Global trade issues have become more of a concern, but for the time being we do not see these as leading to a trade war (defined as a significant disruption of international trade flows). The integrated nature of the global trade system gives countries a strong self-interest in limiting trade conflict.

• Domestic investors tend to understand local politics better than foreign investors. Market reaction to political risk will therefore depend on the domestic-foreign mix of investors. The higher the foreign ownership, the greater the risk of overreaction to political noise. The US dollar's reaction to US political risk is an example of this.

• Strong labor markets give people money to spend. This supports the global economy. Global growth should remain around trend. The taxation of US consumers via tariffs has had little impact so far (perhaps because the taxes are not very visible).

• Companies are finding it easier to increase prices. Producer price inflation has been rising steadily. Consumer prices are a little noisy, but almost every US and European consumer price inflation (CPI) measure is around its 20-year average.

Technically Gold

Gold prices are back under pressure following the failed attempt to test the February-high of 30839.00 on MCX ($1362), and the precious metal may face a larger pullback going into the end of the month as a bearish outside-day takes shape. Bear in mind that gold broke out of a near-term range even as the Federal Open Market Committee (FOMC) delivered a 25bp rate-hike on March 21, and the broader outlook remains constructive as both price and the Relative Strength Index (RSI) snap the bearish formations carried over from earlier this year. It seems as though the Fed’s preset course for monetary policy will continue to shore up gold prices as Chairman Jerome Powell and Co. persistently forecast a neutral Fed Funds rate of 2.75% to 3.00%, but recent price action warns of range-bound conditions as the

advance from the monthly-low of 30095.00 ($1303) starts to unravel. With that said, the precious metal may consolidate going into April, with gold at risk of facing further losses over the coming days as it breaks the series of higher highs & lows from the previous week. Next downside region of interest comes in around 30360 level on MCX ($1316), with key support coming in around 29980 level ($1297). Each move above 31326.00 ($1356), 31760.00 ($1375) and 31740.00 ($1388) would be a step further towards breaking higher.



General Disclaimers: This Report is prepared and distributed by Kedia Stocks & Commodities Research Pvt Ltd. for information purposes only. The

recommendations, if any, made herein are expression of views and/or opinions and should not be deemed or construed to be neither advice for the

purpose of purchase or sale through KSCRPL nor any solicitation or offering of any investment /trading opportunity. These information / opinions /

views are not meant to serve as a professional investment guide for the readers.



PRESS RELEASE

Press Release Istanbul, 28th March

World Gold Council and International Islamic Financial Market collaborate to improve access to gold market for Islamic investors

Today, the International Islamic Financial Market (IIFM) and World Gold Council led the IIFM-WGC Industry Consultative Meeting on Gold Documentation and Products Standardisation in Istanbul, Turkey. The meeting was hosted by Borsa İstanbul at their campus. The meeting assessed current market practices with respect to identified gold related documentation and products. Deliberations were aimed to inform and obtain input from key stakeholders including regulators, financial institutions, law firms, exchanges, industry associations and Shari’ah scholars on standardised product documentation through a series of discussions including: the use of the Allocated Gold Agreements, Gold Consignment Agreements, gold swap product confirmation and other products such as ETFs and gold Sukuk. During his welcoming remarks, Dr. Şenol Duman, Executive Vice President of Borsa Istanbul, stressed out the importance of Stock Markets and the role of Borsa Istanbul for the development of Islamic Capital Market products. He stated: “We are delighted as Borsa Istanbul to host this important Consultative meeting and we are devoted to the development of the Islamic Financial Sector, the Precious Metals Market and the Capital Markets. Therefore we trust this meeting to be beneficial for all the participants and we hope for a fruitful outcome.” Natalie Dempster, Managing Director of Central Banks and Public Policy at the World Gold Council, commented: “The World Gold Council is delighted to be working with IIFM to educate the financial services market and build awareness of the range of gold products available to investors. This collaboration offers the opportunity to provide greater access to the gold market and open up a new investment class for Shari’ah compliant investors to deploy their wealth and diversify market risks”.

Ijlal Ahmed Alvi, Chief Executive of the IIFM, who chaired the meeting, stated: “ This consultative meeting is a first step in achieving the common goal of developing a suite of Shari’ah-complaint standard documentation and product confirmations for use by institutions who are already active in Islamic finance as well as those who are looking to expand services in Shari’ah-complaint gold related asset class. We are greatful to Borsa İstanbul for hosting this important meeting and to all the participants for their valuable input and guidance. The outcome of the meeting will enable IIFM and World Gold Council to assess and prioritize the standardization of certain gold related documentation and products to be developed in the next phase”. The World Gold Council and the IIFM are working closely to develop and promote standardised product and transaction documentation in respect of Shari’ah-compliant gold products. These products (and their associated transactions) include: • Physical vaulted gold / physical gold investment accounts; • physical gold regular savings plans; • physical gold certificates; • physical gold ETFs; • and physical gold undertakings.

The creation of a suite of standarised documentation will facilitate the establishment of a broader range of saving, hedging and diversification products, enabling Islamic banks and other financial institutions to grow their customer bases.



PRESS RELEASE

Platinum market forecast to remain in balance in 2018• Global platinum supply predicted to fall by 2% in 2018• Industrial and jewellery demand expected to rebound • Investment demand buoyed by robust ETF buying in 2017

London, 8th March 2018: The World Platinum Investment Council (WPIC) today announces the publication of its latest Platinum Quarterly - the first independent, freely-available, quarterly analysis of the global platinum market. This report incorporates analysis of platinum supply and demand for the fourth quarter of 2017, the full year 2017 and a forecast for 2018.

Today’s report shows that platinum supply and demand will be closely matched in 2018, returning the market to equilibrium (+25koz). Global platinum supply is forecast to be 7,815 koz in 2018, a decline of 2% from 2017, despite an anticipated increase in recycling of 60 koz to 1,965 koz. Total mining supply for 2018 is expected to decline by 4% to 5,850 koz, mostly owing to reduced output from South Africa following some mine closures in 2017 and lower production in Russia.

Global demand is projected to grow marginally in 2018 to 7,790 koz, as a recovery in industrial demand and an increase in jewellery demand outweigh a decline in automotive demand and slightly lower investment demand.

Paul Wilson, chief executive officer of WPIC commented:“While 2017 was a challenging year for platinum, early indications show signs of a market that is moving in the right direction in 2018. Supply is tightening and demand remains resilient. These promising fundamentals, paired with elevated global uncertainty and a better economic growth outlook, mean macro conditions are becoming increasingly helpful to the platinum market.

“The importance of China to platinum is underlined in today’s report. The final quarter of 2017 has shown welcome, albeit tentative, signs that jewellery demand in the country is improving. We expect this trend to continue through 2018, with ongoing strength across other regions.

“While concerns about automotive demand weigh negatively on platinum sentiment, we believe that these concerns are, once again, overdone. The policy environment for diesel vehicles remains in flux, especially in Europe. Nevertheless, our broad perspective, including the environmental need to reduce CO2 emissions, significant hurdles to mass battery electric vehicle adoption, and automakers already able to genuinely clean up diesel NOx emissions, means we firmly believe clean diesel vehicles will be on the road for years to come.”

Alongside the 2018 forecast, today’s report shows a shift in the market balance for the full year 2017. Total platinum supply grew 1% in 2017, with the market ending 2017 in a 250 koz surplus. This revision is largely due to higher than expected supply from South Africa and a jump in recycling volumes in the fourth quarter of 2017. Global demand, meanwhile, fell 7% year-on-year, amid lower demand in all major market segments.

Automotive demand fell 3% in 2017, due primarily to falling demand in Western Europe. The market did, however, experience growth in commercial vehicles in China and the rest of the world.

Global jewellery demand slipped 2% to 2,460 koz as gains in other regions struggled to offset a decline in China.

Total investment demand was also lower in 2017 at 260 koz, due primarily to a decrease in Japanese bar buying. However, ETF investment rebounded strongly in 2017 after two years of declines, with global holdings rising by 95 koz. The largest increase took place in the US, where investors added 90 koz to their holdings last year.

To download this edition of Platinum Quarterly and/or subscribe to receive the research in the future, without charge, please visit our website: www.platinuminvestment.com



Circular No.38/12/2018

F. No. 20/16/03/2017-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

GST Policy Wing

New Delhi, Dated the 26th March, 2018

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/Commissioners of Central Tax (All)/The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on issues related to Job Work

1. Various representations have been received regarding the procedures to be followed for sending goods for job work and the related compliance requirements for the principal and the job worker. In view of the difficulties being faced by the taxpayers and to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017, (hereinafter referred to as the “CGST Act”) hereby clarifies the various issues raised as below:

2. As per clause (68) of section 2 of the CGST Act, 2017, “job work” means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly. The registered person on whose goods (inputs or capital goods) job work is performed is called the “Principal” for the purposes of section 143 of the CGST Act. The said section which encapsulates the provisions related to job work, provides that the registered principal may, without payment of tax, send inputs or capital goods to a job worker for job work and, if required, from there subsequently to another job worker and so on. Subsequently, on completion of the job work (by the last job worker), the principal shall either bring back the goods to his place of business or supply (including export) the same directly from the place of business/premises of the job worker within one year in case of inputs or within three years in case of capital goods (except moulds and dies, jigs and fixtures or tools).

3. It may be noted that the responsibility of keeping proper accounts of the inputs and capital goods sent for job work lies with the principal. Moreover, if the time frame of one year / three years for bringing back or further supplying the inputs / capital goods is not adhered to, the activity of sending the goods for job work shall be deemed to be a supply by the principal on the day when the said inputs / capital goods were sent out by him. Thus, essentially, sending goods for job work is not a supply as such, but it acquires the character of supply only when the inputs/capital goods sent for job work are neither received back by the principal nor supplied further by the principal from the place of business / premises of the job worker within one/three years of being sent out. It may be noted that the responsibility for sending the goods for job work as well as bringing them back or supplying them has been cast on the principal.

4. With respect to the above legal requirements, various issues have been raised on the following aspects:

a. Scope / ambit of job work;



b. Requirement of registration for a principal / job worker;

c. Supply of goods by the principal from the job worker’s place of business / premises;

d. Movement of goods from the principal to the job worker and the documents and intimation required therefor;

e. Liability to issue invoice, determination of place of supply and payment of GST; and

f. Availability of input tax credit to the principal and the job worker.

5. Scope/ambit of job work: Doubts have been raised on the scope of job work and whether any inputs, other than the goods provided by the principal, can be used by the job worker for providing the services of job work. It may be noted that the definition of job work, as contained in clause (68) of section 2 of the CGST Act, entails that the job work is a treatment or process undertaken by a person on goods belonging to another registered person. Thus, the job worker is expected to work on the goods sent by the principal and whether the activity is covered within the scope of job work or not would have to be determined on the basis of facts and circumstances of each case. Further, it is clarified that the job worker, in addition to the goods received from the principal, can use his own goods for providing the services of job work.

6. Requirement of registration for the principal/ job worker: It is important to note that the provisions of section 143 of the CGST Act are applicable to a registered person. Thus, it is only a registered person who can send the goods for job work under the said provisions. It may also be noted that the registered person (principal) is not obligated to follow the said provisions. It is his choice whether or not to avail or not to avail of the benefit of these special provisions.

6.1 Doubts have been raised about the requirement of obtaining registration by job workers when they are located in the same State where the principal is located or when they are located in a State different from that of the principal. It may be noted that the job worker is required to obtain registration only if his aggregate turnover, to be computed on all India basis, in a financial year exceeds the specified threshold limit (i.e. Rs 20 lakhs or Rs. 10 lakhs in case of special category States except Jammu & Kashmir) in case both the principal and the job worker are located in the same State. Where the principal and the job worker are located in different States, the requirement for registration flows from clause (i) of section 24 of the CGST Act which provides for compulsory registration of suppliers making any inter-State supply of services. However, exemption from registration has been granted in case the aggregate turnover of the inter-State supply of taxable services does not exceed Rs 20 lakhs or Rs. 10 lakhs in case of special category States except Jammu & Kashmir in a financial year vide notification No. 10/2017 - Integrated Tax dated 13.10.2017. Therefore, it is clarified that a job worker is required to obtain registration only in cases where his aggregate turnover, to be computed on all Indiabasis, in a financial year exceeds the threshold limit regardless of whether the principal and the job worker are located in the same State or in different States.

7. Supply of goods by the principal from job worker’s place of business / premises: Doubts have been raised as to whether the principal can supply goods directly from the job worker’s place of business / premises to its end customer and if yes, whether the supply will be regarded as having been made by the principal or by the job worker. It is clarified that the supply of goods by the principal from the place of business / premises of the job worker will be regarded as supply by the principal and not by the job worker as specified in section 143(1)(a) of the CGST Act.

8. Movement of goods from the principal to the job worker and the documents and intimation required therefor:

8.1 Issues: Doubts have been raised about the documents required to be issued for sending the goods (i) by the principal to the job worker, (ii) from one job worker to another job worker; and (iii) from the job worker back to the principal.

8.2 Legal provisions: Section 143 of the CGST Act provides that the principal may send and/or bring back inputs/capital goods for job work without payment of tax, under intimation to the proper officer and subject to the prescribed conditions. Rule 45 of the CGST Rules provides that the inputs, semi-finished goods or capital goods being sent for job work (including that being sent from one job worker to another job worker for further job work or those being sent directly to a job worker) shall be sent under the cover of a challan issued by the principal, containing the details specified in rule 55 of the CGST Rules. This rule has been amended vide notification No. 14/2018-Central tax dated 23.03.2018 to provide that a job worker may endorse the challan issued by the principal.



The principal is also required to file FORM GST ITC-04 every quarter stating the said details. Further, as per the provisions contained in rule 138 of the CGST Rules, an e-way bill is required to be generated by every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees even in cases where such movement is for reasons other than for supply (e.g. in case of movement for job work). Further, the third proviso to rule 138(1) of the CGST Rules provides that the e-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in one State/Union territory to a job worker located in any other State/ Union territory.

8.3 As mentioned above, rule 45 of the CGST Rules provides that inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal, including in cases where such goods are sent directly to a job worker. Further, rule 55 of the CGST Rules provides that the consignor may issue a delivery challan containing the prescribed particulars in case of transportation of goods for job work. It may be noted that rule 45 provides for the issuance of a challan by the principal whereas rule 55 provides that the consignor may issue the delivery challan. It is also important to note that as per the provisions contained in rule 138 of the CGST Rules, an e-way bill is required to be generated by every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees even in cases where such movement is for reasons other than for supply (e.g. in case of movement for job work). The third proviso to rule 138(1) of the CGST Rules provides that the e-way bill shall be generated either by the principal or by the registered job worker irrespective of the value of the consignment, where goods are sent by a principal located in one State/Union territory to a job worker located in any other State/ Union territory. It may also be noted that as per Explanation 1 to rule 138(3) of the CGST Rules, where the goods are supplied by an unregistered supplier to a registered recipient, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods. In other words, the e-way bill shall be generated by the principal, wherever required, in case the job worker is unregistered.

8.4 Clarification: On conjoint reading of the relevant legal provisions, the following is clarified with respect to the issuance of challan, furnishing of intimation and other documentary requirements in this regard:

(i) Where goods are sent by principal to only one job worker: The principal shall prepare in triplicate, the challan in terms of rules 45 and 55 of the CGST Rules, for sending the goods to a job worker. Two copies of the challan may be sent to the job worker along with the goods. The job worker should send one copy of the said challan along with the goods, while returning them to the principal. The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act, 2017.

(ii) Where goods are sent from one job worker to another job worker: In such cases, the goods may move under the cover of a challan issued either by the principal or the job worker. In the alternative, the challan issued by the principal may be endorsed by the job worker sending the goods to another job worker, indicating therein the quantity and description of goods being sent. The same process may be repeated for subsequent movement of the goods to other job workers.

(iii) Where the goods are returned to the principal by the job worker: The job worker should send one copy of the challan received by him from the principal while returning the goods to the principal after carrying out the job work.

(iv) Where the goods are sent directly by the supplier to the job worker: In this case, the goods may move from the place of business of the supplier to the place of business/premises of the job worker with a copy of the invoice issued by the supplier in the name of the buyer (i.e. the principal) wherein the job worker’s name and address should also be mentioned as the consignee, in terms of rule 46(o) of the CGST Rules. The buyer (i.e., the principal) shall issue the challan under rule 45 of the

CGST Rules and send the same to the job worker directly in terms of para (i) above. In case of import of goods by the principal which are then supplied directly from the customs station of import, the goods may move from the customs station of import to the place of business/premises of the job worker with a copy of the Bill of Entry and the principal shall issue the challan under rule 45 of the CGST Rules and send the same to the job worker directly.

(v) Where goods are returned in piecemeal by the job worker:



In case the goods after carrying out the job work, are sent in piecemeal quantities by a job worker to another job worker or to the principal, the challan issued originally by the principal cannot be endorsed and a fresh challan is required to be issued by the job worker.

(vi) Submission of intimation: Rule 45(3) of the CGST Rules provides that the principal is required to furnish the details of challans in respect of goods sent to a job worker or received from a job worker or sent from one job worker to another job worker during a quarter in FORM GST ITC-04 by the 25th day of the month succeeding the quarter or within such period as may be extended by the Commissioner. It is clarified that it is the responsibility of the principal to include the details of all the challans relating to goods sent by him to one or more job worker or from one job worker to another and its return therefrom. The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act.

9. Liability to issue invoice, determination of place of supply and payment of GST:

9.1 Issues: Doubts have been raised about the time, value and place of supply in the hands of principal or job worker as also about the issuance of invoices by the principal or job worker, as the case may be, with regard to the supply of goods from principal to the recipient from the job worker’s place of business / premises and the supply of services by the job worker.

9.2 Legal provisions: As mentioned earlier, section 143 of the CGST Act

provides that the inputs/capital goods may be sent for job work without payment of tax and unless they are brought back by the principal, or supplied from the place of business / premises of the job worker within a period of one / three years, as the case may be, it would be deemed that such inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) have been supplied by the principal to the job worker on the day when the said inputs or capital goods were sent out. Further, the job worker is liable to pay GST on the supply of job work services.

9.3 The provisions relating to time of supply are contained in sections 12 and 13 of the CGST Act and that for determining the value of supply are in section 15 of the CGST Act. The provisions relating to place of supply are contained in section 10 of the IGST Act, 2017. Further, the provisions relating to the issuance of an invoice are contained in section 31 of the CGST Act read with rule 46 of the CGST Rules.

9.4 On conjoint reading of all the provisions, the following is clarified with respect to the issuance of an invoice, time of supply and value of supply:

(i) Supply of job work services: The job worker, as a supplier of services, is liable to pay GST if he is liable to be registered. He shall issue an invoice at the time of supply of the services as determined in terms of section 13 read with section 31 of the CGST Act. The value of services would be determined in terms of section 15 of the CGST Act and would include not only the service charges but also the value of any goods or services used by him for supplying the job work services, if recovered from the principal. Doubts have been raised whether the value of moulds and dies, jigs and fixtures or tools which have been provided by the principal to the job worker and have been used by the latter for providing job work services would be included in the value of job work services. In this regard, attention is invited to section 15 of the CGST Act which lays down the principles for determining the value of any supply under GST. Importantly, clause (b) of sub-section (2) of section 15 of the CGST Act provides that any amount that the supplier is liable to pay in relation to the supply but which has been incurred by the recipient will form part of the valuation for that particular supply, provided it has not been included in the price for such supply. Accordingly, it is clarified that the value of such moulds and dies, jigs and fixtures or tools may not be included in the value of job work services provided its value has been factored in the price for the supply of such services by the job worker. It may be noted that if the job worker is not registered, GST would be payable by the principal on reverse charge basis in terms of the provisions contained in section 9(4) of the CGST Act. However, the said provision has been kept in abeyance for the time being.

(ii) Supply of goods by the principal from the place of business/ premises of job worker: Section 143 of the CGST Act provides that the principal may supply, from the place of business / premises of a job worker, inputs after completion of job work or otherwise or capital goods (other than moulds and dies, jigs and fixtures or tools) within one year or three years respectively of their being sent



out, on payment of tax within India, or with or without payment of tax for exports, as the case may be. This facility is available to the principal only if he declares the job worker’s place of business / premises as his additional place of business or if the job worker is registered. Since the supply is being made by the principal, it is clarified that the time, value and place of supply would have to be determined in the hands of the principal irrespective of the location of the job worker’s place of business/premises. Further, the invoice would have to be issued by the principal. It is also clarified that in case of exports directly from the job worker’s place of business/premises, the LUT or bond, as the case may be, shall be executed by the principal. Illustration: The principal is located in State A, the job worker in State B and the recipient in State C. In case the supply is made from the job worker’s place of business / premises, the invoice will be issued by the supplier (principal) located in State A to the recipient located in State C. The said transaction will be an inter-State supply. In case the recipient is also located in State A, it will be an intra-State supply.

(iii) Supply of waste and scrap generated during the job work: Sub - section (5) of Section 143 of the CGST Act provides that the waste and scrap generated during the job work may be supplied by the registered job worker directly from his place of business or by the principal in case the job worker is not registered. The principles enunciated in para (ii) above would apply mutatis mutandis in this case.

9.5 Violation of conditions laid down in section 143: As per the provisions contained in section 143 of the CGST Act, if the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) are neither received back by the principal nor supplied from the job worker’s place of business within the specified time period, the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) would be deemed to have been supplied by the principal to the job worker on the day when such inputs or capital goods were sent out to the first job worker.

9.6 Thus, if the inputs or capital goods are neither returned nor supplied from the job worker’s place of business / premises within the specified time period, the principal would issue an invoice for the same and declare such supplies in his return for that particular month in which the time period of one year / three years has expired. The date of supply shall be the date on which such inputs or capital goods were initially sent to the job worker and interest for the intervening period shall also be payable on the tax. If such goods are returned by the job worker after the stipulated time period, the same would be treated as a supply by the job worker to the principal and the job worker would be liable to pay GST if he is liable for registration in accordance with the provisions contained in the CGST Act read with the rules made thereunder. It may be noted that if the job worker is not registered, GST would be payable by the principal on reverse charge basis in terms of the provisions contained in section 9(4) of the CGST Act. However, the said provision has been kept in abeyance for the time being. Further, there is no requirement of either returning back or supplying the goods from the job worker’s place of business/premises as far as moulds and dies, jigs and fixtures, or tools are concerned.

10. Availability of input tax credit to the principal and job worker: Doubts have been raised regarding the availability of input tax credit (ITC) to the principal in respect of inputs / capital goods that are directly received by the job worker. Doubts have also been raised whether the job worker is eligible for ITC in respect of inputs, etc. used by him in supplying job work services. It is clarified that, in view of the provisions contained in clause (b) of sub-section (2) of section 16 of the CGST Act, the input tax credit would be available to the principal, irrespective of the fact whether the inputs or capital goods are received by the principal and then sent to the job worker for processing, etc. or whether they are directly received at the job worker’s place of business/premises, without being brought to the premises of the principal. It is also clarified that the job worker is also eligible to avail ITC on inputs, etc. used by him in supplying the job work services if he is registered.

11. It is requested that suitable trade notices may be issued to publicize the contents of this circular.

12. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.

(Upender Gupta)

Commissioner (GST)



Ministry of Finance

26th Meeting of the GST Council meets & decidesExtension of tax exemptions for exporters for six

months

Posted On: 10 MAR 2018 4:50PM by PIB Delhi

Sending a strong positive signal to the exporting community, the GST Council in its26 meeting held here today decided to extend the available tax exemptions on importedgoods for a further 6 months beyond 31.03.2018. Thus, exporters presently availing variousexport promotion schemes can now continue to avail such exemptions on their importsupto 01.10.2018, by which time an e-Wallet scheme is expected to be in place to continue thebenefits in future.

In a related development which would benefit the exporters, the Council reviewed theprogress in grant of refunds to exports of both IGST and Input Tax Credit. The Councilappreciated that the pace of grant of IGST refund has picked up. Thereafter, the Councildirected GSTN to expeditiously forward the balance refund claims to the Customs/CentralGST/State GST authorities, as the case may be, for their immediate sanction and disbursal.

It may be recalled that in its meeting held on 06.10.2017 the Council had noted thatexporters are experiencing difficulties of cash blockage on account of having to upfront payGST / IGST on the inputs, raw materials etc. / finished goods imported / procured forpurposes of exports. An interim solution was found by re-introducing the pre-GST taxexemptions on such imports. Additionally, for merchant exporters a special scheme ofpayment of GST @ 0.1% on their procured goods was introduced. Also, domesticprocurement made under Advance Authorization, EPCG and EOU schemes were recognizedas 'deemed exports' with flexibility foreither the suppliers or the exporters being able toclaim a refund of GST / IGST paid thereon. All these avenues were made available upto31.03.2018.

The permanent solution agreed to by the Council was to introduce an e-Wallet scheme w.e.f.01.04.2018. The e-Wallet scheme is basically the creation of electronic e-Wallets, whichwould be credited with notional or virtual currency by the DGFT. This notional / virtualcurrency would be used by the exporters to make the payment of GST / IGST on the goodsimported / procured by them so their funds are not blocked.

On 16.12.2017, Finance Secretary constituted a Working Group with representativesof Central and State Governments to operationalize the e-Wallet scheme. After reviewing theprogress, the Council noted that whereas some preparatory work had been done, moreneeds to be done to address a large number of technical, legal and administrative issues that

th

PRESS RELEASE



Ministry of Finance

Recommendations made during the 26th meeting ofthe GST Council held in New Delhi Today

Posted On: 10 MAR 2018 4:49PM by PIB Delhi

I. Return filing System

The present system of filing of GSTR 3B and GSTR 1 is extended for another threemonths i.e., April to June, 2018 till the new return system is finalized. A new model wasdiscussed extensively and Group of Ministers on IT has been tasked to finalize the same.

II. Reverse charge mechanism

The liability to pay tax on reverse charge basishas been deferred till 30.06.2018. In themeantime, a Group of Ministers will look into the modalities of its implementation to ensurethat no inconvenience is caused to the trade and industry.

III. TDS/TCS

The provisions for deduction of tax at source (TDS) under section 51 of the CGST Act andcollection of tax at source (TCS) under section 52 of the CGST Act shall remain suspended till30.06.2018. In the meantime, the modalities of linking State and Central Governmentsaccounting system with GSTN will be worked out so that seamless credit is available to theregistered traders whose tax is deducted or collected at source.

IV. Grievance Redressal Mechanism

GST implementation Committee (GIC) has been tasked with the work of redressingthe grievances caused to the taxpayers arising out of IT glitches.

DSM/RM/SS

(Release ID: 1523715) Visitor Counter : 13

PRESS RELEASEPRESS RELEASE



No proposal to review gold import policy, says governmentThe gems and jewellery sector has demanded a reduction in import duty on the metal, he said.

The government said today that there is no proposal to review the gold imports policy as inbound shipments of the metal have remained high."At present, there is no proposal to review the gold import policy," Minister of State for Commerce and Industry C R Chaudhary said in a written reply to the Lok Sabha.The gems and jewellery sector has demanded a reduction in import duty on the metal, he said.The request, he said, was examined in this year's Budget.However, taking note of the fact that despite 10 per cent import duty, imports of gold have remained high, and reduction in the duty would have resulted in "substantial loss of revenue", no change was made in the duty, he added.Gold imports declined by 17 per cent to USD 2.89 billion in February as against USD 3.48 billion in the same month last year. Source:https://economictimes.indiatimes.co

Absence of GST refund mechanism hits gold demand from tourists, NRIsKOLKATA: Foreign tourists and NRIs visiting India are

not investing in gold jewellery like before as there is no mechanism to refund the GST on their purchase which they are otherwise entitled to claim, bullion traders and jewellers said.The Integrated Goods and Services Tax Act of 2017 allows a foreign national or an NRI, who enters India for a stay of less than six months, to claim GST refund when he leaves India. Gold jewellery attracts 3%

INDIA NEWS

GST.“The tax component is significant on account of the high value of the commodity and that becomes one of the decisive factors for a tourist to buy jewellery or not,” Nitin Khandelwal, chairman at All India Gems & Jewellery Trade Federation (GJF), told ET. “The absence of the refund mechanism is dampening sales to tourists under GST.”Khandelwal said offering tax refunds has long been an important way for cities and countries to attract overseas tourists. “Keeping in mind global practices followed in other countries, tourists should be in a position to get tax refund on purchases made by them when they leave India,” he said. Surendra Mehta, national secretary at India Bullion & Jewellers Association, concurred. “As the refund is not happening, NRIs and foreign citizens are reluctant to buy traditional jewellery in India, which is directly affecting the jewellers,” he said. Chartered accountant Bhavin Mehta of Dee Cee Associates said the explanation to Section 15 of the IGST Act defines the term tourist and also has specific provision for refund of GST paid by tourist leaving India on any supply of goods taken out of India by them. “However, the government has not laid down rules to implement the refund mechanism till date. Further, absence of refund mechanism shall lead to export of taxes. Tax being exported makes the jewellery in India less competitive as compared to its foreign counterparts,” he said. Mehta added that in Singapore and Australia, there are Tourist Refund Schemes (TRS) that promote tax-free shopping.Source: https://economictimes.indiatimes.com/n

India Tightens Gold Import Norms For Nominated AgenciesSome agencies were taking advantage of India's free trade agreement with neighbouring countries, according to experts. India tightened gold import norms for nominated agencies by restricting them from importing

INDIA NEWS

the yellow metal only for export purposes and not for selling in the domestic market, the government said in a circular."...

are permitted to import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate," the government said in the circular. Some nominated agencies, which account for nearly a quarter of total imports by India, were taking advantage of India's free trade agreement with neighbouring countries and importing the bullion without paying import duty, prompting the government to impose these curbs, analysts said.India is the world's second largest gold consumer importing on an average 75 tonnes every month in 2017 before tapering to 48 tonnes in September.Source: https://www.ndtv.com/

Centre to roll out new gold policy by early next monthThe Centre is set to announce a new gold policy by end of this month or first half of April to institutionalise

and bring in more transparency in the trade. It also is in the process of setting up policy frame work for launching spot gold exchange and a Gold Board that would eventually be considered to regulate the spot exchange. Speaking at the fifth India International Bullion Summit, Manoj Dwivedi, Joint Secretary, Ministry of Commerce and Industry, said the process of collecting suggestions

from the industry players is almost done and NITI-Aayog is in the process of releasing a the gold policy by March-end or early April. Following this, he said a task force would be formed to identify measures that can be implemented in a time bound manner. The government is also in the process of forming a Gold Board with representation of all the interested parties including RBI, SEBI, Ministry of Finance, Ministry of Commerce, Directorate General of Foreign Trade and members from the industry to draft the policy framework for launching spot gold exchange.Source:https://www.thehindubusinessline.com

Mandatory hallmarking of gold jewellery in phases, BIS rules to be notifiedMeasure to be implemented in metros first, followed

by state capitals, district HQs and rest of country Mandatory hallmarking of gold jewellery will become a reality any time during the next quarter, that is, from financial year 2018-19, if the government decides to go ahead with it. The Bureau of Indian Standard has submitted rules under the amended BIS Act enacted two years ago, to the law ministry, which is understood to have cleared them. The matter now lies with Ministry of Consumer Affairs. Jewellery hallmarking was also recommended by the Niti Aayog panel on comprehensive gold policy, and sources say the government is likely to go ahead with the measure irrespective of when decisions on other aspects of the policy are taken. Consumer affairs minister Ram Vilas Paswan had said on several occasions in the past, that hallmarking would be implemented soon.



ASEAN NEWS

Gold products of Antam gain world recognitionGold products produced by the precious metal refining and processing unit PT.Antam have received world-level recognition. Vice President of precious metal sales and marketing, Yosep Purnama, stated that PT.Antam, has earned the certificate from London Bullion Market Association (LBMA) for its production output that is acceptable to all the people of the world. "Antam is the only company that has received the LBMA certificate in Indonesia," he noted. According to Purnama, the purity of gold products produced by Antam has reached levels of 999.9 percent. "Except for Freeport, gold mining products in Indonesia are brought to Antam`s precious metal processing and refining business unit, because the results are satisfying, which reach 999.9 percent level," Purnama stated. Indonesia can be proud as one of its state-owned companies has received the LBMA certification for processing and refining of precious metals. It is different from other factories, because it has gained international recognition for producing gold products with highest levels of purity in the world.

Source: https://en.antaranews.com/

Malaysian gold jewellery exports to drop to RM4bil this yearThe Penang Goldsmith Association (PGA) is projecting the value of Malaysia’s gold jewellery exports to be about RM4bil for 2018, a decline of about 40% from the RM6.7bil achieved in 2017. PGA adviser Joeson Khor said the decline would be due to the recently imposed 5% value-added tax (VAT) in January 2018 by the UAE government.“Last year, when the UAE government introduced the 5% import duty on gold jewellery products, the export from Malaysia to UAE dropped to RM3.54bil in 2017 from RM6.48bil

in 2016.“The import duty deterred purchasers in UAE from buying overseas gold jewellery products. The 5% VAT introduced in January 2018 would further dampen demand from the UAE,” he added.In 2017, the top five buyers of Malaysian gold jewellery were UAE, Singapore, Thailand, Japan and Hong Kong.In 2017, Malaysia imported some RM3.3bil worth of gold jewellery.“We should see a 10% drop in imports this year, due to the restrained spending power of consumers,” Khor added.According to Khor, the retail gold jewellery business would contract further in 2018.

Source: https://www.thestar.com.my/Myanmar:Budget deficit could have been narrower if gold debts were paidIn 2017-18, the amount of debt in gold owed to the government is estimated to be more than K2.7 trillion compared to the budget deficit of K4 trillion. “If we had received taxes from this avenue on time, our country’s budget deficit could have been mitigated and GDP increased,” said Daw Shwe Shwe Sein Latt, Hluttaw MP from Bago Region. Moemi Moehti gold miners which failed to pay gold dues to the government were poorly managed by the Ministry of Natural Resources and Environmental Conservation, according to a report by the Government’s Guarantees, Pledges and Undertaking Vetting Committee submitted during an Amyotha Hluttaw meeting on March 29.“There were some weaknesses on the ministry’s part when the contracts were made with the miners and also many delays when submissions were made by the miners to pay gold to the government,” U Thein Swe, committee chair and Amyotha Hluttaw MP from Ayeyarwaddy Region, told The Myanmar Times at the end of the meeting.

Source: https://www.mmtimes.com

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IBJA Opening & Closing Rates for Gold and Silver(All rates in INR)

DateGold 999

(AM Price)10 Gms

Gold 999(PM Price)

10 Gms

Gold 995(AM Price)

10 Gms

Gold 995(PM Price)

10 Gms

Gold 916(AM Price)

10 Gms

Gold 916(PM Price)

10 Gms

Gold 750(AM Price)

10 Gms

Gold 750(PM Price)

10 Gms

Gold 585(AM Price)

10 Gms

Gold 585(PM Price)

10 Gms

Silver 999(AM Price)

1 Kg

Silver 999(PM Price)

1 Kg

03-01-2018 30420 30380 30270 30230 27865 27828 22815 22785 17796 17772 38145 38085

03-05-2018 30660 30665 30510 30515 28085 28089 22995 22999 17936 17939 38575 38550

03-06-2018 30570 30605 30420 30455 28002 28034 22928 22954 17883 17904 38290 38435

03-07-2018 30760 30705 30610 30555 28176 28126 23070 23029 17995 17962 38805 38735

03-08-2018 30590 30635 30440 30485 28020 28062 22943 22976 17895 17922 38330 38360

03-09-2018 30460 30545 30310 30395 27901 27979 22845 22909 17819 17869 38305 38385

03-12-2018 30520 30430 30370 30280 27956 27874 22890 22823 17854 17812 38455 38335

03-13-2018 30450 30400 30300 30250 27892 27846 22838 22800 17813 17784 38335 38345

03-14-2018 30640 30525 30490 30375 28066 27961 22980 22894 17924 17857 38565 38445

03-15-2018 30540 30475 30390 30325 27975 27915 22905 22856 17866 17828 38370 38330

03-16-2018 30360 30360 30210 30210 27810 27810 22770 22770 17761 17761 38155 38155

03-19-2018 30245 30340 30095 30190 27704 27791 22684 22755 17693 17749 37810 37940

03-20-2018 30465 30400 30315 30250 27906 27846 22849 22800 17822 17784 38065 38020

03-21-2018 30410 30450 30260 30300 27856 27892 22808 22838 17790 17813 37905 38000

03-22-2018 30655 30675 30505 30525 28080 28098 22991 23006 17933 17945 38415 38480

03-23-2018 30870 NT 30720 NT 28277 NT 23153 NT 18059 NT 38430 NT

03-26-2018 30895 30930 30745 30780 28300 28332 23171 23198 18074 18094 38410 38485

03-27-2018 30970 30905 30820 30755 28369 28309 23228 23179 18117 18079 38660 38540

03-28-2018 30840 30830 30690 30680 28249 28240 23130 23123 18041 18036 38355 38355

The above rates are exclusive of GST/VAT



Gold Spot Market, International (Per Troy Ounce)

Spot gold 01st Mar 29th Mar % Change

Australia (AUD) 1696.31 1725.03 1.69

Britain (GBP) 955.83 944.27 -1.21

Canada (CAD) 1689.58 1707.86 1.08

Europe (Euro) 1073.27 1076.95 0.34

Japan (Yen) 139813.00 141074.50 0.90

Switzerland (CHF) 1240.01 1267.52 2.22

USA (USD) 1316.87 1325.03 0.62

Monthly Exchange Data (Gold) (From Mar 01-29)

Exchange Commodity Open High Low Close % Ch.

COMEX2 Gold June18 1325.60 1362.60 1309.30 1327.30 0.27

SHANGHAI –SHFE4 Gold June18 272.75 277.25 269.65 271.20 -0.57

Singapore- ICE (ICESA)5 Gold June18 42.47 43.78 42.29 43.30 1.60

MCX1 Gold June18 30407.00 31175.00 30240.00 30552.00 0.15

NCDEX HEDGE Gold July’18 28356.00 28666.00 27982.00 28617.00 0.74

TOCOM3 Gold June18 4538.00 4601.00 4452.00 4560.00 0.55

1- Rs/10 gms, 2- $/oz, 3- Jpy/gm 4 (RMB) Yuan/gram 5 - $/gram

Gold Spot Market, India Rs/10gm

Spot Gold 01st Mar 29th Mar % chg

Ahmedabad 30269.00 30630.00 1.19

Bangalore 30480.00 31550.00 3.51

Chennai 31100.00 31410.00 1.00

Delhi 31250.00 31950.00 2.24

Mumbai 31840.00 32070.00 0.72

Hyderabad 31030.00 31410.00 1.22

Kolkata 32290.00 32510.00 0.68

Currency Change (Monthly)01st Mar 30th Mar

EUR/USD 1.2268 1.2323USD/AUD 1.2893 1.3022USD/GBP 1.3776 1.4018USD/INR 65.167 65.109USD/JPY 106.24 106.28

Silver Spot Market, International (Per Troy Ounce)

Spot Silver 01st Mar 29th Mar % Change

Australia (AUD) 21.20 21.28 0.40

Britain (GBP) 11.95 11.64 -2.59

Canada (CAD) 21.12 21.06 -0.27

Europe (Euro) 13.41 13.28 -1.01

Japan (Yen) 1747.58 1739.66 -0.45

Switzerland (CHF) 15.50 15.63 0.84

USA (USD) 16.46 16.33 -0.78

Monthly Exchange Data (Silver) (From Mar 01-29)

Exchange Commodity Open High Low Close % Ch.

COMEX2 Silver July18 16.52 16.98 16.19 16.35 -0.88

MCX1 Silver July18 39140.00 39949.00 38636.00 38889.00 -1.09

TOCOM3 Silver June’18 56.70 57.50 55.50 57.50 1.41

1- Rs/kg, 2- $/oz, 3- Jpy 0.1/gm

Silver Spot Market, India Rs/kgSpot Silver 01st Mar 29th Mar % chgMumbai 41700.00 41100.00 -1.44

Bullion - Data & Statistics



Bullion - Data & Statistics

LBMA Gold & Silver Price (Per Troy Ounce)

GOLD AM GOLD PM SILVER

DATE USDAM GBPAM EURAM USDPM GBPPM EURPM DATE USDPM GBPPM EURAM

01-03-2018 1311.25 953.80 1075.75 1307.75 952.17 1075.10 01-03-2018 16.32 11.87 13.39

02-03-2018 1316.75 955.70 1071.04 1322.30 959.20 1072.78 02-03-2018 16.45 11.92 13.36

05-03-2018 1326.30 958.78 1075.63 1320.40 955.31 1071.11 05-03-2018 16.51 11.95 13.42

06-03-2018 1324.95 957.01 1074.00 1331.40 958.21 1073.77 06-03-2018 16.62 11.96 13.41

07-03-2018 1332.50 960.07 1071.86 1329.40 957.43 1071.10 07-03-2018 16.65 12.01 13.4208-03-2018 1325.40 955.08 1070.39 1321.00 953.37 1069.75 08-03-2018 16.48 11.89 13.3109-03-2018 1319.35 955.21 1072.50 1320.60 952.81 1072.46 09-03-2018 16.49 11.92 13.4012-03-2018 1317.25 950.66 1069.87 1319.15 949.39 1070.89 12-03-2018 16.46 11.88 13.3913-03-2018 1318.70 948.94 1069.60 1322.75 946.82 1068.52 13-03-2018 16.51 11.88 13.3814-03-2018 1324.95 949.59 1071.35 1323.55 947.79 1070.35 14-03-2018 16.61 11.88 13.4215-03-2018 1323.35 949.24 1070.72 1318.75 943.30 1068.32 15-03-2018 16.52 11.86 13.3716-03-2018 1320.05 945.42 1071.09 1310.10 942.75 1068.39 16-03-2018 16.48 11.79 13.3619-03-2018 1311.70 934.59 1066.41 1312.40 934.95 1065.14 19-03-2018 16.29 11.59 13.2420-03-2018 1312.75 935.60 1066.22 1311.00 935.53 1067.55 20-03-2018 16.25 11.60 13.2221-03-2018 1316.35 935.53 1071.64 1321.35 939.08 1075.71 21-03-2018 16.25 11.56 13.2322-03-2018 1328.85 939.36 1078.10 1329.15 942.90 1080.47 22-03-2018 16.52 11.64 13.4123-03-2018 1342.35 952.80 1088.65 1346.60 950.97 1091.42 23-03-2018 16.53 11.70 13.3926-03-2018 1348.40 949.27 1086.95 1352.40 951.82 1087.19 26-03-2018 16.61 11.67 13.3927-03-2018 1350.65 954.64 1087.41 1341.45 948.41 1082.42 27-03-2018 16.64 11.79 13.4128-03-2018 1341.05 946.24 1082.23 1332.45 945.11 1079.82 28-03-2018 16.46 11.63 13.2829-03-2018 1323.90 941.69 1075.80 1323.85 941.79 1074.57 29-03-2018 16.28 11.58 13.21

www.mcxindia.comwww.Ncdex.comwww.cmegroup.comwww.tocom.or.jp/Indianwww.barchart.com

www.forexpros.comDomestic Spot precious metals prices Newspaperwww.lbma.org.uk/index.html www.netdania.com

Sources:

Disclaimer: All references to LBMA Gold Price are used with the permission of ICE Benchmark Administration Limited and have been provided for informational purposes only. ICE Benchmark Administration Limited accepts no liability or responsibility for the accuracy of the prices or the underlying product to which the prices may be referenced.

LBMA Silver Price (“Benchmark”) is owned by The London Bullion Market Association (“LBMA”), calculated by CME Benchmark Europe Ltd. (“CMEBEL”) and administered by Thomson Reuters Benchmark Services Ltd. (“TRBSL”).

None of LBMA, CMEBEL, TRBSL, their group companies, nor any of their or their group companies’ respective directors, officers, employees or agents (collectively the “Disclaiming Parties”) shall be liable in respect of the accuracy or the completeness of the Benchmark or the market data related thereto (“Market Data”) and none of the disclaiming parties shall have any liability for any errors, omissions, delays or interruptions in providing the Benchmark or market data.

The Team for Precious Metals Analysis

www.spectro.com

Nucleus Analytics Private Limited No.30C, 3rd Floor, 6th Main, J.C. Industrial Layout, Kanakapura Main Road, Yelachenahalli, Bengaluru - 560 062, IndiaTel.: +91.80.2686.1120, Mobile: +91.99.0056.8027, Email: [email protected]

SPECTRO Analytical Instruments GmbHBoschstr. 10, 47533 Kleve, GermanyPhone: +49 .2821.8 92.0Fax: +49.2821.8 92.22 00Email: [email protected]

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ISSN 2277 - 7350 RNI No. KARBIL/2011/40219 Registered No. KRNA/BGE-1091/2018-2020 Posted at Bangalore PSO 560026 on 7th & 10th of every month Licensed to post without pre-payment No - 269 - No of pages 44

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