NEW DELHI: The government has increased import duty on gold from 7.5% to 12.5 per cent, as part of a strategy to discourage shipments into the country and check the growing trade deficit. The effective rate rises to 15% after the budgeted 2.5% Agriculture Infrastructure Development Cess (AIDC).
Higher tariffs pushed domestic prices higher by more than Rs 52,000/10 gram on Friday, the highest level since April 25, according to Reuters data.
“Gold is flexible in its demand. So, you might want to see if you can try to discourage at least the extent to which people are importing. Or, if you are importing and you are still importing If you want to do this, please pay this much so that the country can get some revenue,” FM Nirmala Sitharaman Said on Friday, a day after the notification of the change in duty.
India’s trade deficit widened to a record $23.3 billion during May due to an increase in imports, while export growth moderated. During the month, gold shipments increased nearly nine times to over $6 billion.
The levy comes at a time when the Center is looking to mobilize resources to meet its high expenditure commitment and rein in the fiscal deficit. However, market players are concerned about the adverse impact of higher levies and expect gold smuggling to increase further.
For a long time gold imports were allowed duty free. UPA The regime, however, imposed customs duty to discourage purchases, something that Modi The government has continued. While consumer behavior has not changed, smuggling has increased and seizures are being reported almost daily. Apart from this, the customs officers treat every passenger coming from here. bay As countries suspected of making the Green Channel redundant
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