Import duty on gold hiked to 8% from 6%

Updated: Friday, June 7, 2013, 10:26 [IST]

The government has increased the import duty on gold and platinum by another 2 per cent late on Wednesday to reduce imports of the precious metal, as the current account deficit threatens to go out of control.

The additional import duty on gold ores and concentrates for use in the manufacture of gold has also been increased to 6 per cent from 2 per cent and on gold dore bar (gold content not exceeding 95 per cent) to 6 per cent.

Gold, the demand for which is mostly met for imports, will now attract an 8 per cent import duty against 6 per cent earlier.

The move comes close on the heels of the RBI extending the restriction on the import of gold on consignment basis from banks to all nominated agencies, premier, star trading houses who have been permitted by Government of India to import gold.

In April gold imports into India surged as gold prices globally fell.

India and China accounted for 62 per cent of Q1 global jewellery demand, generating year-on-year growth of 15 per cent and 19 per cent respectively, according to the World Gold Council.

This is the second hike in the duty in six months as gold imports touched an alarming 162 tonnes in May. The imports touched a staggering figure of USD 15 billion in the last two months.
The hike is aimed at curbing import of gold which is mainly responsible for rise in CAD impacting on the country's foreign exchange reserves as well as the rupee value.

With inputs from PTI