Niti Aayog, the government think tank has suggested that the import duty on gold could be brought down from the existing level of 10 percent and also cut the GST rate on the precious metal from the current 3 percent. In its latest report, it has also recommended the government to review and revamp the gold monetization scheme (GMS) and the sovereign gold bond scheme and introduce new gold savings account in banks besides setting up of a gold board and bullion exchanges across the country to have greater financialisation of the yellow metal.

The committee headed by Niti Aayog Principal Adviser Ratan P Watal in its report said: "A reduction in the customs duty in the past in India has been argued to support tax compliance coupled with a significant reduction in the quantum of gold smuggled into India." It further said, "In this context, to create a tax compliant system within the sector, it is important to reduce the basic customs duty on gold to as low as possible."

Other recommendations include:

• Exemption of 3 percent Integrated Goods and Service Tax (IGST) to be paid by the exporter in line with customs duty with a provision of bank guarantee.
• Reduction of GST on gold from 3 percent to appropriate levels.
• Exemption from GST registration for job workers receiving gold from other states.
• Revision of threshold for exemption under GST on a value-added basis from the current Rs 20 lakh
• GST rate for repair service of jewellery should be reduced from 18 percent to 3 percent.
• Scrapping of commodity transaction tax (CTT) on gold derivatives.
• Provision for capital gains tax exemption for gold-related financial instruments.
• Revamp GMS with time-bound targets.
• Encourage banks to set up more branches to accept gold deposits under the GMS.
• Allow deposits as low as one gram, and multiples thereof under GMS.
• Exempt the transfer of gold collected under the GMS from the purview of the GST.
• Introduction of a new financial product for banks 'Gold Savings Account', that will accept rupee and credit grams of gold, with passbook facility.
• Set up a new body 'The Gold Board of India' and bullion exchanges under the Ministry of Finance.

The committee said the report provides a robust foundation for realising the policy intent stated in the Union Budget 2018-19 of developing a comprehensive Gold Policy to develop gold as an asset class and outlines the way forward for realising the transformational potential of India's gold market.