The government increased the import tax on silver bars, dore (the unprocessed form of silver), and other items to match and platinum from 9.21 percent to 14.35 percent. The government raised the import tax on gold bars and gold dore around the end of last year. In order to close the duty gap, it was agreed to raise the charge on goods made of gold, silver, and platinum. The action is anticipated to raise prices in the domestic market at a time when the demand has decreased as a result of high pricing.
While the hike in tax on jewellery made of precious metals like gold, silver, and platinum is a relief, Vipul Shah, Chairman of the GJEPC, said the import charge on dores, which are the raw material in nature for manufacturing jewellery, needs clarity from the government. According to him, the current duty rise will result in a 5 percentage point increase in the duty on silver, which will raise the cost of silver-containing products locally. In order to promote the general welfare of the industry, he added, the Council will continue to seek similar goals with the government.
The industry had anticipated a reduction in gold import tax because it was badly hindered by smuggling and the grey market, according to Saiyam Mehra, Chairman of the All India Gem and Jewellery Domestic Council. People would suffer because of the increase in silver duty. At the meeting with FM on Saturday, he added, GJC would continue to represent this crucial issue for the Industry.
High taxes will hinder industry efforts to turn gold into an asset class, especially at a time when gold prices are rising globally, according to Somasundaram PR, Regional CEO, India at World Gold Council. He added that the growing grey market has undermined efforts to cut down on cash transactions and penalises organised and law-abiding players.
The base tax on gold bars was reduced by the Finance Minister from 12.5% to 10%, however, the Agri Infrastructure Development Cess was raised from 2.5% to 5%.
