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‘Deposits ordinance does not cover gold schemes’
- Tax experts have said that the Banning of Unregulated Deposit Schemes Ordinance, 2019 does not cover gold schemes. There has been a lack of clarity on whether deposits taken by jewellers from customers falls under the ambit of the ordinance.
- Several gold jewellers across India run monthly deposit schemes to improve liquidity for working capital and facilitate customers’ redemption for jewellery purchase on maturity.
- In February 2019, the Union Cabinet had approved the promulgation of the Banning of Unregulated Deposit Schemes Ordinance, 2019. The ordinance is in regard to the Banning of Unregulated Deposit Schemes Bill, 2018. The Lok Sabha had passed the bill, however, the bill could not get approval from the Rajya Sabha.
- The ordinance seeks to tackle the problem of illicit deposit taking activities in India and protect the interests of depositors. It provides for complete prohibition on promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme.
- It bans the unregulated deposit-taking activities by making the offence ex-ante i.e. based on assumption and prediction.
