Gold traders seek reversal of customs duties

Anticipating a spike in gold prices due to the proposed hike in customs duties for precious metals in the Union Budget for 2010-11, the gold traders of Orissa have sought a rollback of the proposal.

In his budget speech, Union finance minister Pranab Mukherjee had announced a 50 per cent increase in custom duties on gold from Rs 200 to Rs 300 per 10 gm. Similarly, he had also announced to raise the customs duty on silver by 50 per cent from Rs 1000 to Rs 1500 per kg.

“The hike in customs duties is likely to push up price of gold. We demand that the Centre should reconsider the decision for the gold traders of the state”, said Sanjay Sahu, general secretary of Orissa Jewellery Association. The gold trade in Orissa has already been hit hard by the escalating prices and any further hike will only worsen the situation, P Satya Narayan Senapati, president of Berhampur Jewellery Association (BJA).

According to gold traders, the price of gold in India is dependent on the international gold prices, but it is feared the domestic gold price will still escalate even if the global prices fall due to the hike in customs duty rate.