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A sales person shows a gold ring to customers at a jewellery showroom during Dhanteras, a Hindu festival associated with Lakshmi, the goddess of wealth, in Ahmedabad, India, October 28, 2016.Reuters file

Titan Company was the biggest gainer on the Bombay Stock Exchange (BSE) on Monday morning, up 15 percent at Rs. 545 after hitting a fresh 52-week high of Rs. 548. Other gold stocks such as PC Jeweller, Gitanjali Gems and Tribhovandas Bhimji Zaveri (TBZ) were also up sharply in response to the Goods and Services Tax (GST) Council finalising 3 percent tax rate on gold and other jewellery.

PC Jeweller was up 9.5 percent at Rs. 551, TBZ was trading 5 percent higher at Rs. 97 while Gitanjali Gems was up 4.85 percent at Rs. 70.30 on the BSE at around 11.50 am.

The current rate of tax comes to about 2.5 percent (1 percent excise duty, around 1 percent value added tax and 0.5 percent cess) and therefore is being seen as a significant relief. The import duty of 10 percent remains unchanged by GST provisions.

The Council also fixed 0.25 percent "notional" tax on raw diamonds, evoking disappointment from traders, though there is a provision for claiming a refund.

"Taxing diamonds is a retrograde step and not in sync with equivalence policy. Diamonds are the key raw materials for gem and jewellery exports business. Rough diamonds have been kept out of the purview of taxes in various Asian countries which are globally competitive," Praveenshankar Pandya, Chairman, Gem & Jewellery Export Promotion Council (GJEPC), said in a statement on Saturday.

"It is difficult for gems & jewellery exporters to pay 0.25% and then initiate process for refunds, etc," he added.

The BSE Sensex was up 75 points at 31,348 while the NSE Nifty was up 25 points at 9,678. Top gainers were Bajaj Auto and ONGC.