Govt not considering immediate gold import duty cut

Business

oi-Staff

By Super

Published: Wednesday, September 10, 2014, 14:39 [IST]

New Delhi: The government on Wednesday said it was not considering any immediate cut in gold import duty, which was hiked to 10 percent last year to check widening Current Account Deficit (CAD).

"I cannot say that gold smuggling has increased because of hike in import duty. CAD has come down, but there is no thought to lower the import duty immediately," Commerce Minister Nirmala Sitharaman told reporters here.

There have been demands for reduction in the levy on the precious metal as import cads declined to 638 tonnes in 2013-14 from 845 tonnes in the previous fiscal.

Following a sudden spurt in gold import in the beginning of 2013, the government had hiked import duty on the precious metal to 10 per cent in phases.

The government and the Reserve Bank had also imposed certain other restrictions on its shipments, including linking of imports to exports to prevent outgo of the foreign exchange.

The restrictions are perceived to have increase instances of smuggling.

The cases of gold smuggling had gone up in 2013-14 to 2,441. In 2012-13 and 2011-12 the number of such cases stood at 869 and 500 respectively.

High gold imports also pushed up the current account deficit as it rose to USD 88.2 billion or 4.7 percent of GDP in 2012-13. Through import curbs, the CAD has been brought down to USD 32.4 billion or 1.7 percent in 2013-14.

PTI