Sona Nahi Sasta Yaha! Gold Prices In Souk Market; 24K/100 Grams Up Rs 3,418 After Custom Duty Cut In India

Gold prices in the souk market jumped by Rs 3,418 on July 23 despite a sharp customs duty cut in India. In the Budget 2024, FM Nirmala Sitharaman reduced custom duty on the gold bar to 6% from earlier 15%, which is likely to increase the demand for gold among Indians, especially those who are looking to bring gold into the country from Dubai. Gold is cheaper in Dubai than in India, and the latest custom-duty cut could make yellow metal even more affordable.

Gold prices in cities of India fell sharply by Rs 29,900 in 24K/100 grams on July 23. However, this was not the case with gold prices in Dubai.

Gold Price In Dubai:

In Indian Rupees:

24K gold is up by Rs 3,418 to Rs 6,63,584 in 100 grams on July 23, while 10 grams price rose by Rs 341 to Rs 66,358. Also, 8 grams and 1 gram price jumped by Rs 274 and Rs 34 to Rs 53,087 and Rs 6,636 respectively.

Meanwhile, 22K of gold is at Rs 6,14,029, higher by Rs 2,848 on July 23. Moreover, 10 grams of gold is up by Rs 285 to Rs 61,403, 8 grams is up by Rs 228 to Rs 49,122, and lastly, 1 gram is at Rs 6,140 higher by Rs 28.

In the lowest carat, 18K, 100 grams of gold jumped by Rs 2,848 to Rs 5,09,792. Additionally, 10 grams is up by Rs 285 to Rs 50,979, 8 grams surged by Rs 227 to Rs 40,783, and that of 1 gram is up by Rs 29 to Rs 5,098.

In Dirhams:

22K and 18K gold prices in its local currency surged by 1.25 dirhams to 125 dirhams on Tuesday. While yellow metals in 24K increased by 1.50 dirhams to 150 dirhams in a single day.

100 grams of 22K is at 26,950 AED, 10 grams at AED 2,695, 8 grams at 2,156 AED, and 1 gram at 270 AED.

Whereas, 100 grams of 18K is at 22,375 AED, 10 grams at 2,237.50 AED, 8 grams at 1,790 AED, and 1 gram at 224 AED.

Coming to 24K, gold prices are 29,125 AED for 100 grams, 2,912.50 AED for 10 grams, 2,330 AED for 8 grams, and 291 AED for 1 gram.

Explaining in detail why gold is cheaper in Dubai than in India, ClearTax's blog said, that Indians often travel to Dubai to buy gold at affordable rates. Gold prices in Dubai are cheaper compared to India due to several reasons. One of the reasons for a cheaper gold rate in Dubai is zero GST (goods and services tax) on bullion and gold jewellery, while India imposes 3% GST on gold. Apart from this, Dubai jewellery stores charge a reasonable manufacturing cost, which makes 24K gold in Dubai approximately 5% to 7% cheaper than in India.

Also, ClearTax highlighted that Daily global rates and the currency rate between the UAE dirham and the Indian rupee determine the price difference. Consumers save more money when they purchase gold in huge quantities from Dubai. Thus, the pricing advantage is one of the major reasons why Dubai remains a gold investment destination for Indians.

Custom Duty Before Budget 2024:

There are certain limitations in carrying gold from Dubai to India. As per the guidelines, currently, if an Indian traveller has stayed in Dubai for more than six months, he or she is allowed to carry up to 1 kg of gold in baggage which will be after payment of duty. Also, they are still liable to pay customs duties for carrying above the duty-free gold limit.

Only two items are permitted in yellow metal to carry from Dubai. These are gold coins and gold bars. The duty-free gold limit varies for male and female travellers.

For male passengers, from Dubai, 20 grams of gold with a maximum value of Rs 50,000 are allowed in India without paying any customs duty. If the passenger exceeds this limit then they will have to pay customs duty which is --- 3% for gold quantities between 20 grams to 50 grams; 6% for a quantity between 50 grams to 100 grams; and lastly 10% for gold quantities above 100 grams.

For Indian female passengers, from Dubai, the duty-free gold limit is higher than the males to the tune of 40 grams with a value of Rs 1 lakh. The options can be jewellery, bars or coins. If the limit is exceeded then a customs duty of 3% is applicable on gold quantities between 40 grams to 100 grams. The custom duty rate is higher at 6% on gold quantities between 100 grams to 200 grams. Lastly, the rate is 10% on gold quantity of over 200 grams.

A duty-free gold limit is also applicable for children. They are allowed to bring gold ornaments of up to 40 grams. The custom duty rate is similar to female passengers if the limit is exceeded.

Custom Duty Cut In Gold In India:

On July 23, Finance Minister Nirmala Sitharaman more than halved custom duty on gold and silver to 6% from earlier 15%. Duty on silver and gold dore has also been sharply trimmed to 5.35% from earlier 14.35%. The announcement was made on July 23. With the latest custom duty cut, gold from Dubai to India is most likely to witness the change in duty payout as well.

Post Budget, Raghvendra Nath, MD, Ladderup Wealth Management said, "Reductions in customs duties on gold and silver are anticipated to benefit domestic companies by potentially lowering the prices of these precious metals."