Budget: Duty hike to hit India’s gold, platinum import

Published on February 27, 2010 15:45

NEW DELHI (Commodity Online): India’s march to continue the global leader in gold consumption may be hit by Pranab Mukherjee’s Budget which proposed a three-fold hike in customs duty on gold and platinum imports.

In case of silver also, the Indian finance minister increased the duty three-fold from the present Rs 500 per kg to Rs 1,500 per kg.

As far as gold and platinum are concerned the present duty of Rs 100 per 10 gm has been hiked to Rs 300.

India’s gold imports had witnessed a huge fall in 2009 and in January 2010 the imports had shown slight improvement.

In 2009, gold imports declined 19 per cent to 339.8 tonnes from 2008 on the back of record prices.

Gold import in January rose to 37 tonnes against 27 tonnes in December. It was 30 tonnes in November. In October, however, gold’s arrival into the country was 48 tonnes on good demand due to festival season.

Because of the new duty hike, domestic consumption of gold and silver jewellery may go down.

The cost of manufacturing will also increase as compared to the competitive countries as the government has not extended the two per cent subvention to the industry and it will affect the exports from the country.

The government has reduced customs duty on rhodium – a precious metal used for polishing jewellery – to two per cent from 10 per cent.

This is to encourage domestic refining capacity for gold. Further, the excise duty on refined gold made from such ore or concentrate is being reduced from eight per cent to a specific duty of Rs 280 per 10 grams.

According to some analysts, the increase in duty on gold may lead to smuggling and recycling.

Though prices are likely to go up, it is unlikely to crimp demand. Gold prices zoomed to a high of Rs 18,700 per 10 gm during November-December. It is now hovering around Rs 16,500-16700 per 10 gram.

Sumber : http://www.commodityonline.com/news/Budget-Duty-hike-to-hit-India%E2%80%99s-gold-platinum-import-26024-3-1.html


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