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Gold is a valuable asset which is popularly perceived as a symbol of wealth and power. India is one of the largest gold markets in the world, and is considered the world's second largest importer of gold after China. India's demand for gold increased by 18% to 248.3 tonnes in the July–September 2024 quarter, compared to 210.2 tonnes in the same period in 2023. This rise was driven by a reduction in gold import duties.
As the Indian economy continues to grow, the demand for gold is expected to further increase in the coming years. If you’re planning to start a gold business in India, then it is recommended to go through this article titled “How to Start a Gold Business in India?”
The gold jewelry market in India offers great opportunities, making it an attractive sector for establishing a gold business. India has millions of jewelry shops to serve the demand of jewellery lovers. Retail gold jewelry shops are extremely popular, especially during festive seasons like Diwali and Christmas.
Moreover, a gold business provides a favourable business structure. Most retail gold jewelry shops are small family-run businesses, making the retail jewelry sector an ideal sector for setting up a small business.
It is generally easy for jewellery usinesses to have large turnovers which are more than Rs. 1 crore. This profitability is one of the major reasons why many jewelry shops operate as private limited companies, allowing owners to benefit from limited liability protection and easy transfer of ownership. Because of all these reasons, starting a gold jewellery business can be a good idea.
Now, let’s check out the requirements for starting a gold business in India.
The requirements for starting a gold business in India have been explained in this section. If you need a helping hand in establishing a gold business in India, you may connect with our team for assistance in company registration, GST registration and IEC registration processes.
To incorporate a company in India with the Registrar of Companies (ROC), obtaining the digital signature certificate (DSC) in advance is a crucial step. DSC is a legal electronic document used to digitally sign company incorporation documents. This legal instrument verifies the authenticity of documents signed electronically.
To obtain a DSC in India, you must register with a trusted third party called a Certifying Authority (CA). Once a DSC has been issued by the CA, it remains valid for one to two years, and by payment of renewal fees, it can be revalidated.
A private limited company is a great business model for starting a gold business as it offers limited liability protection, and also easier access to funding through loans and angel investors. For starting a gold business as a private limited company, you must register your business with the Registrar of Companies (ROC). For this, you must file SPICe+ form.
Before filing the form, you must make sure you have obtained the DSC and have prepared all the required documents, such as Memorandum of Association & Articles of Association. The Memorandum of Association is a company incorporation document which outlines the objectives and operations of the company, while the Articles of Association defines the internal rules and management structure of the business.
If you do not want to register your company, you can go for the sole proprietorship business model. However, you must take into account all the pros and cons of this business model. If you set up your gold business as a sole proprietorship, you will be liable for all the losses your business makes and your personal assets will be at risk if your business falls in debt. To discuss the ideal business model for your gold business, you can speak with our company registration consultants.
For businesses in India with annual turnover exceeding Rs. 40 lakhs, GST registration is mandatory. For businesses registered in North Eastern states, the threshold is Rs. 10 lakhs. However, small businesses have the option to voluntarily register for GST. If they choose not to register, they will not be fined for it.
When business owners obtain GSTIN for their GST registration mandatory-businesses, they avoid penalties and can collect GST tax. The GST on gold purchase in India attracts a 3% GST rate (consisting of 1.5 CGST + 1.5% SGST) on the gold value. Therefore, if a customer purchases gold jewelry worth Rs. 10,000, they must pay Rs. 300, making the bill amount to Rs. 10,300 in total.
According to Statista, in the 2024 fiscal year, India imported more than 3.7 trillion Indian rupees worth of gold. For the same year, the gold exports of India were valued at 265 million US dollars.
To import or export gold jewelry in India, it is essential to obtain an Importer Exporter Code (IEC). IEC is a 10-digit code issued by the Directorate General of Foreign Trade. By securing an IEC certificate, you can conduct gold export or import business legally.
Obtaining an IEC code may take up to 6 weeks or longer depending on how quickly you submit the required documents and the accuracy of information provided in your application.
BIS full form is the Bureau of India Standards. It is the national standard body established in 2016 under the BIS Act. It establishes and certifies the quality standards for gold jewellery. If you see a gold jewelry with a BIS hallmark on it, it signifies that the jewelry meets the BIS standards for quality and purity.
Before a jeweler can sell gold jewelry, they must get it hallmarked by BIS as a legal requirement. Since 1st April, 2023, the government has mandated a 6-digit hallmarking with Hallmark Unique Identification Number (HUID) for the sale or purchase of gold. The hallmark can be spotted on the gold jewelry pretty easily.
Apart from this, a license from BIS must be obtained for the particular retail outlet by the jeweller wishing to sell hallmarked jewellery. For each retail outlet, a separate BIS license must be obtained before hallmark jewelry can be sold. This means that if a single company has 10 outlets, 10 BIS licenses will be required i.e., 1 license for each outlet.
Once the license has been granted, the jeweller must ensure compliance with all the rules and regulations stipulated by the Bureau of Indian Standards. If there is any deviation in the gold’s purity or it is discovered that the operations do not conform to the stipulated requirements, the BIS license can be revoked and the gold business may be liable to penalties.
If you are sure about opening a gold business in India, and are confident you can fulfill all the legal requirements, here are some gold business ideas you can choose from:
Gold Jewelry Manufacturing Business
Online Gold Trade Business
Gold Refining Business
Gold Import Business
Gold Export Business
Gold Crockery Business
Gold is a valuable commodity cherished by most Indian households. Many Indians like to collect gold jewelry to wear on special occasions or buy gold as an investment. Given the rising demand for gold in India, starting a gold business can be a profitable business idea. In this blog post, we explained all the major requirements to open a gold company in India.
If you need further information, do not hesitate to connect with our business experts at Registrationwala.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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