For trading EGRs, physical gold can be procured through a designated delivery center. A retail investor can approach a designated delivery center, deposit gold, receive an EGR in return, and then opt to trade the EGR on the BSE Gold spot stock exchange. EGRs can be bought using a demat account by registering with a stockbroker and buying EGRs just like buying stocks on the BSE, from one gram of gold to one kilogram. However, according to a report by The Hindu, the concept of Electronic Gold Receipts (EGRs) has not gained much traction in India due to GST taxation issues when importing gold for conversion into EGRs. An importer noted that they must deposit gold in exchange-designated vaults to generate EGRs equivalent to the quantity of gold deposited. However, gold bars cannot be moved out of the bank vault or traded without paying a GST of three percent. Once an EGR is created after paying GST, the seller must wait until these receipts are converted back to physical gold, which may take months, locking up the three percent GST for that period.
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