The government on Monday announced cut in import duty on gold and silver, a move that will help bring down prices of these precious metals in the domestic market and boost exports of gems and jewellery.
The duty was reduced on other precious metals including gold dore bar, silver dore bar, platinum, gold/silver findings, and precious metal coins.
"Gold and silver presently attract a basic customs duty of 12.5 per cent. Since the duty was raised from 10 per cent in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalising customs duty on gold and silver," Finance Minister Nirmala Sitahraman said while presenting the Union Budget 2021-22.
The customs duty on gold and silver was reduced to 7.5 per cent.
The duties on other precious metals were cut down to 6.9 per cent on gold dore bar from 11.85 per cent; 6.1 per cent on silver dore bar from 11 per cent; 10 per cent on platinum from 12.5 per cent; 10 per cent for gold/silver findings from 20 per cent; and 10 per cent on precious metal coins from 12.5 per cent.
All these sectors, however, would also attract 'Agriculture Infrastructure and Development Cess' at a rate of 2.5 per cent.
Welcoming the decision, Gems and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah said that it would help in promoting domestic manufacturing and boosting exports.
"It was our long-pending demand to cut the import duty on gold and silver. It is a welcome move for the domestic organised sector," Shah said.
Gold imports, which have a bearing on the current account deficit, fell 27.20 per cent to USD 16.8 billion during April-December 2020-21.
Silver imports during the period too dipped 67 per cent to about USD 762.31 million.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually.
Gems and jewellery exports declined by about 40 per cent to about USD 17 billion during the nine months of the current fiscal.
