India reduces import tax on gold and silver in efforts to combat smuggling

India reduces import tax on gold and silver in efforts to combat smuggling

“It’s a massive step in (the) right direction, as it will reduce the incentives for smuggling of gold. It will create a level playing field for honest industry stakeholders,” said Sachin Jain, CEO of World Gold Council’s Indian operations.

The government said it will charge 5% basic customs duty and 1% in Agriculture Infrastructure & Development Cess (AIDC) on gold and silver imports, lowering import duties to 6% from 15%.

“To enhance domestic value addition in gold and precious metal jewelry, I propose to reduce customs duties of gold and silver to 6%,” India’s Finance Minister Nirmala Sitharaman said in a budget speech.

Local gold prices fell 6% to 68,500 rupees per 10 grams, their to their lowest level in more than three months after the announcement. Indian prices hit a record high of 74,777 rupees earlier this month, which squeezed demand.

Overseas gold prices erased losses and rose 0.4%.

Indian jewelry demand was hit by record-high gold prices, but the duty cut will bring down prices and boost consumption, said Saurabh Gadgil, chairman of PNG Jewelers.

Gold was trading at a premium in India for the first time in eleven weeks on Tuesday, with dealers charging a premium of up to $20 an ounce over official domestic prices, inclusive of 15% import and 3% sales levies, versus last week’s discount of $65.

Shares of jewelry makers such as Titan Company, Tribhovandas Bhimji Zaveri, Senco Gold and Kalyan Jewelers jumped by up to 10%.

Finance Minister Sitharaman also announced an import duty exemption for 25 critical minerals, including lithium. India has been exploring ways to secure supplies of lithium, a critical raw material used to make electric vehicle batteries.

(Reporting by Rajendra Jadhav; Additional reporting by Neha Arora; Editing by Himani Sarkar, Clarence Fernandez and Alexander Smith)

Source link

Share this article
Shareable URL
Prev Post

Why Renting is Better than Buying a House in Canada

Next Post

De Beers sees a 15% decrease in production in Q2

Leave a Reply

Your email address will not be published. Required fields are marked *

Read next
Subscribe to our newsletter
Stay informed on the latest market trends