Govt blocks practice of importing gold utensils at 1% duty

Government has blocked import of gold utensils at 1 per cent duty under Free Trade Agreements. Traders were found misusing this route to circumvent gold import duty of 10 per cent.

In a central excise notification no. 34/2016 issued yesterday, Central Board of Excise and Customs imposed 12.5 per cent countervailing duty on all articles made of gold and silver, which are imported from countries with whom India has signed FTA or comprehensive trade treaties.

Harish Acharya, secretary, Bullion Federation said, "The notification is timely because it will stop trade distorting practices by some importers."

Several complaints were made to government about import of gold utensils by paying just 1 per cent duty as against 10 per cent import duty for gold. In budget, government imposed 12.5 per cent countervailing duty on gold jewellery, which helped stopping jewellery imports by paying 1 per cent duty but traders found loophole and were importing utensils.

In August 300 kgs of such utensils were said to have been imported. Such practices were found to be distorting whole trade as potential of such importing was keeping domestic gold prices under severe discount.

Now the notification blocked even articles where gold content is more than 37.5 per cent entering under this route. So gold import using alloys were also made difficult.

The notification defined "any alloy in which the gold content is not less than 37.5 per cent by weight" has been covered.