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