Finance Minister Nirmala Sitharaman has expressed concern many times regarding the smuggling of gold in the country. Now the Ministry of Commerce has made a new plan to curb smuggling. So will gold be cheaper than this?
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India is the second largest gold importing country in the world. But due to its high demand, its smuggling also happens indiscriminately in the country. Now the Ministry of Commerce has proposed to deal with it. At the same time, the jewelry business has also raised the hope of gold becoming cheaper in the coming days. Know what the government is going to do
PTI has reported quoting sources that the Ministry of Commerce has proposed to reduce the import duty on gold in the general budget for the next financial year 2023-24. The Ministry of Commerce says that this will give a boost to the gems and jewelery industry in the country.
import duty on gold
In July this year, the central government had increased the import duty on gold from 10.75 per cent to 15 per cent. The government had taken this step with the intention of reducing the current account deficit and controlling the rising import of gold. Gold attracts a customs duty of 12.5 per cent, while an agricultural infrastructure development cess is levied at the rate of 2.5 per cent, thus taking the total import duty on gold to 15 per cent.
Decision after looking at the demand of industries
Sources say that keeping in mind the demands of the country’s gems and jewelery industry, the Commerce Ministry has sent these recommendations to the Finance Ministry. The Finance Ministry invites suggestions from different sectors and ministries for the upcoming budget of the country.
The stakeholders associated with the export of gems and jewelery have been demanding a reduction in the import duty on gold for a long time. Collin Shah, former chairman of the Gems and Jewelery Export Promotion Council, said that the industry expects the government to take steps to promote exports in the budget to be presented on February 1.
Shah said, ‘This sector will be widely benefited by the reduction in the import duty of gold. We are also hopeful that the potential tax on rough diamonds and the duty on seeds used to prepare artificial diamonds will be abolished.
Gold will be cheaper due to reduction in import duty
On the other hand, some experts in the jewelery sector believe that the official prices of gold will come down due to the reduction in import duty. This will benefit those people who do business of gold and jewelery in a legal way. Although gold prices depend on international conditions in many cases, because India imports most of its gold requirement. At the same time, gold jewelery is exported on a large scale from here.
During April-November in the current financial year, the export of gems and jewelery from the country increased by two percent to $ 26.45 billion. During this period, gold imports decreased by 18.13 percent to $ 27.21 billion. The reduction in gold imports helps in reducing the current account deficit.
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