Business Standard

Import duty on gold and silver up

Related News

The government raised on gold and silver exorbitantly to curb import of precious metals translating thereby huge outflow of dollar outside India.

In a rare decision, the government raised import duty to an ad valorem 2% from the existing Rs 300 per 10 grams while the same on silver was raised to 6% from the prevailing Rs 1500 a kg.

The import duty on gold comes to around Rs 540 per 10 grams now considering the base price of Rs 27,000 per 10 grams.Similarly, in silver total duty works out to nearly Rs 3,120 a kg considering the base price of Rs 52,000 .

“This will have no major impact on consumption pattern in India considering people’s inherent passion towards the precious metals,’ said Suresh Hundia, one of India’s largest bullion importers.

When presenting the 2009-10, Finance Minister had increased import duty on gold bars from Rs 100 per 10 gram to Rs 200 per 10 gram, while duty on other forms of gold (excluding jewellery) was increased from Rs 250 per 10 gram to Rs 500 per 10 gram.

The customs duty on silver was increased from Rs 500 per kg to Rs 1,000 per kg. The duty on gold and silver was not been reviewed since 2004 even though prices have increased manifold, the finance minister then said.

Further in 2010 annual budget, the government increased the import duty on gold for the second time to Rs 300 per 10 grams from Rs 200 earlier, and import duty on gold raised to Rs 1,500 per kg from Rs 1,000 earlier.

Earlier Ajay Mitra, managing director, Middle East & India, WGC, the market development organisation of the gold industry, had forecast while uneviling the third quarter gold demand trend in November last year that "the government could raise the import duty on gold in the budget for FY12 since high prices did not deter consumers from making a record purchase of 745.7 tonne jewellery last year.

"The high demand resulted in the country importing 918 tonne, the highest in a year so far. However, I don't see demand being hit since the duty calculated on a per gram basis works out to just Rs 300. As a result, the demand for gold bars, jewellery and coins will not be affected due to the increase in import duty. However, this trend will help the government to earn additional revenues by increasing the import duty."

According to estimates of WGC, Indian government earned around Rs 2,836.6 crore in 2010 as an import duty on gold. In 2010, the import duty stood at Rs 30,900 per kg. In 2010, Indian consumers consumed approximately 963.1 tonne of gold prized at Rs 1.73 lakh crore, representing a YoY growth of around 66%.

Meanwhile, Rajiv Jain, chairman of the Gems & Jewellery Export Promotion Council (GJEPC) termed the decision as industry unfriendly.

“It is a bad news for us,” he added.

Read more on:   
|
|
|
|
|
|

Read More

Gold gains Rs 225, silver up by Rs 500

Gold maintained an upward trend for the fourth straight day in the bullion market here today and rose by Rs 225 to Rs 28,690 per 10 grams on marriage ...

Quick Links

 

Market News

DLF finds Rs 2,000 cr in assets 'frozen' by mutual funds

The company has reached out to Sebi for relief or clarity on the matter

Sensex gains over 150 points; BSE Auto index up 3%

Hero MotoCorp, Bajaj Auto, Tata Motors, Maruti Suzuki India, M&M and Eicher Motors are up 1-3.5%

ONGC falls 5% in two days on stake sale report

Over the past two days, the stock declined 5.25% to Rs 397 from Rs 419 on October 20, compared to 1.2% rise in CNX Nifty

Auto shares in demand; S&P BSE Auto index zooms over 400 points

Hero MotoCorp, Bajaj Auto, Tata Motors, Maruti Suzuki and M&M are up 2-3.5% on BSE.

Natco Pharma extends rally on USFDA nod for Armodafinil tablets

The stock rallied 9% to Rs 1,438, extending its previous day's 4% gain on National Stock Exchange.

Back to Top