NEW DELHI: The Finance Ministry has hiked the customs tariff value for gold and silver imports into the country.
While the tariff value for gold has gone up to ₹ 363 per 10 grams from ₹ 354 per 10 grams, the tariff value for silver has been increased to ₹ 499 per kilogram from ₹ 477 per kilogram earlier.
This move has come at a time when gold imports in value terms had recorded 62 percent increase in July. Gold imports in July in volume terms were estimated to be about 75 tonnes, much higher than 57 tonnes in June
Tariff value is the base price at which customs duty is levied.
Gold is India’s second largest expense on the import bill after Oil. India—which is the world’s second biggest consumer of gold after China—is expected to import 900-1000 tonnes of gold this financial year.
It is unlikely that the latest hike in customs tariff rates would affect the demand for gold that doesn’t appear to abate, said Saloni Roy, Senior Director, Deloitte in India:
“With the festive season around the corner a swell in the import of precious metals by Indians is likely. The increase in the customs tariff rate on gold and silver just before the festive season is a dampener therefore”, she said.
Gold and silver are amongst the highest imported items into India.
Increase in customs tariff rates on import of gold and silver can assist in reducing the country’s current account deficit which is unfavourably impacted due to imports of precious metals.
The Government’s repeated message to people has been to abstain from buying gold and to invest instead in other saving instruments. However, gold is auspicious and continues to be a favourite investment for Indians.
