Jan 17, 2012, 10.44 PM IST

Gold import duty hike won't impact business: Shree Ganesh

Nilesh Parekh of Shree Ganesh Jewellery tells CNBC-TV18 that the hike in gold import duty will not have any impact on business.

Midcap Radar at 01:30 pm

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Nilesh Parekh, Chairman, Shree Ganesh Jewellery

Nilesh Parekh of Shree Ganesh Jewellery tells CNBC-TV18 that the hike in gold import duty will not have any impact on business. �In fact, gold demand will increase now because Indians like to buy gold when it is expensive,� he adds.

The government today announced that it is planning to impose a 2% levy on gold imports against the earlier static duty of Rs 300 per 10 grams.

According to Shah, this move will help level the playing field for those importing gold and selling it on the retail side. "It could also be a proposition as government is trying to get GST," he said.

Below is an edited transcript of his interview with Latha Venkatesh and Gautam Broker. Also watch the accompanying video.

Q: We have learned that the government is planning to impose a 2% levy on gold imports versus a fixed duty of Rs 300 earlier. Do you think demand is going to be impacted or is the government trying to reduce gold imports?

A: No, none of that. Most probably it was a proposition as government is trying to get GST and gold has the lowest excise that is 1% in terms of duty. So there were mixed expectations that government might increase the duty to one more percent to make it a level playing field for all the people who are importing gold as well as selling on retail.

One percent increase on gold import duty will not practically make any impact on the business as such. I feel people who are carrying the stock as of today, their stock has gone up by 1% naturally, so it�s alright.

Q: Would it have an impact on demand since quite clearly gold becomes expensive in one shot by about Rs 600?

A: Yes, but you see there is so much of volatility in gold; everyday there is a fluctuation of Rs 1000-1500 if you see it in the morning and evening.

Q: So you don�t expect this to have an impact on the physical import of gold, it doesn�t get any less?

A: They won�t get less, in fact it will grow more.

Q: Why do you say that?

A: India always buys gold when gold is expensive. When gold is sliding, Indians have so much of affirmative for gold and we in house hold so much of gold as we all know and we import year on year approximately 800-1000 tonne of gold inspite of gold price doubling. So 1% is hardly going to make much difference.