New Delhi: The price of Gold in the country may surge at a noticeable level, and the people of India may have to pay more to buy gold as the government has decided to impose more tax on the import of gold on Friday. “India has raised the import duty on gold to 15 percent from 10.75 percent to check current account deficit (CAD) and rising import of the yellow metal,” the government notification said. The duty changes came into effect by June 30.
Before the change in taxation, the basic customs duty on gold was 7.5 percent, and it will be 12.5 percent from now. Along with the agriculture infrastructure development cess (AIDC) of 2.5 percent, the effective gold customs duty will be 15 percent.
According to the Ministry of Finance, “There has been a sudden surge in imports of gold. In May, a total of 107 tonnes of gold was imported, and in June also the imports have been significant. The surge in gold imports is putting pressure on the current account deficit,”
The majority of India’s gold needs are met by imports which however placed pressure on the rupee that hit a record low earlier this week, to reduce inflows to the world’s second-largest consumer, India increased its import tax on gold in a surprise move today.
The World Gold Council on India’s gold import said, “India’s gold imports reached their highest level in ten years in 2021.” India’s gold purchases had been increasing since last year after buying declined during the pandemic.
The Centre had disregarded any knee-jerk reaction that would have impacted the ongoing economic recovery, it had remained alert after the trade imbalance reached a record $24.3 billion in May.
(Vinayak)
