For example, silver and gold (including imports of eligible passengers) are subject to a basic duty of 7.5% and an AIDC of 2.5%. India increased import duties on gold to 12.5 percent in 2019, which industry representatives said encouraged the smuggling of gold bars into the country and hit the banks and precious metal traders who paid the tariff. Since precious metal prices rose in 2020, physical demand has collapsed and imports have fallen to multi-year lows. The total levy on gold is currently 15.5%, including GST,“ said Sugandha Sachdeva, vice president of metals, energy and currency research at Religare Broking. „The reduction will be favourable to the growth of the Indian gold industry. However, both will attract 2.5% of agricultural infrastructure and declining development. As the second largest consumer of gold in the world, India imports much of its gold and silver needs. Unofficial imports fell by 80% to 20-25 tonnes last year due to logistical disruptions due to Covid and could be further affected this year by ongoing flight restrictions and lower tariffs. The government announced in the 2021 budget that it would reduce import duties on precious metals from 12.5% to 7.5%, which would be favorable to the growth of the Indian gold industry. However, both will attract 2.5% of agricultural infrastructure and declining development. As the second largest consumer of gold in the world, India imports much of its gold and silver needs. With the sharp rise in precious metal prices in 2020, physical demand collapsed and imports fell to multi-year lows.
The total levy on gold is currently 15.5 percent, including GST,“ said Sugandha Sachdeva, vice president of metals, energy and currency research, Religare Broking. „Higher import tariffs have not only indirectly encouraged illegal gold transactions, but have also undermined government revenues,“ said MP Ahammed, chairman of Malabar Gold & Diamonds. For shipments of yellow metal, importers must submit the report of their use and proof of proof to the Central Excise Bureau of India. The Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, determines the regulation of gold imports into India. This year, the CBIC excluded imports of gold and silver in the public interest under the Agricultural Infrastructure and Development Export Promotion Programs (AIDC). The 2.19 percent reduction from a 42 percent increase in the price of gold since July 2019, the date of the last tariff increase, may not be a strong trigger for demand, the World Gold Council said. Increased demand for gold from India could support global prices, which hit record highs last year, although it could increase India`s trade deficit and weigh on the battered rupee. The jewelry industry welcomed the government`s decision to reduce import tariffs. „The reduction of import duties on gold to 7.5% is a step in the right direction and meets the long-standing demand of the gemstone and jewellery industry. Higher import duties have not only indirectly encouraged illegal gold transactions, but have also undermined government revenues. The reduction of import duties will ensure compliance with trade regulations. In addition, the government should also focus on strengthening the e-governance system to strengthen the mechanism for tracking illegal gold transactions.
Overall, transparent trade always builds consumer confidence,“ said Ahammed MP, President of Malabar Gold & Diamonds. The list of companies that can import gold into India is notified by the Directorate General of Foreign Trade (DGFT). A person of Indian origin who has a valid passport can import gold, only after a license has been issued by the DGFT. The list of companies that can import gold into the domestic market reads: „With reduced tariffs, costs will come down, which is a huge benefit to the long-term gold demand outlook. It will give a boost to the gemstones and jewellery sector, which plays an important role in the Indian economy, and lead to a boost towards production and export. The EU budget had lowered tariffs on gold from 12.5% to 7.5%, but imposed an additional 2.5% surcharge on agricultural infrastructure development and another 10% social assistance surcharge on tariffs. Total net import duties are 14 per cent, including GST, compared to 16 per cent before the budget. On MCX, gold futures plunged 3%, or about ₹1,500 per 10 grams, to ₹47,918. In comparison, gold prices in global markets rose 1.2% to $1,872.4 per ounce.
MUMBAI, 1. February (Reuters) – India on Monday cut import tariffs on gold and silver, a surprising move that industry officials say could boost retail demand and curb smuggling to the world`s second-largest gold consumer. India is a globally important market for gold trading, but it is interesting to note that India does not produce a significant amount of gold capable of meeting the huge domestic demand. India ranks second in the world in terms of gold imports, after China. The country imports gold in the form of gold bars, which is managed by the Reserve Bank of India (RBI), the central bank. In the midst of the pandemic, India imported $34.6 billion worth of precious metals last year, compared to $28.2 billion in the previous fiscal year. Also this year, India has massively increased its gold imports, although prices are moderate compared to previous levels. .