Calcutta, Feb. 26: Gold, silver and platinum will cost more following Pranab Mukherjee’s decision to hike custom duty by 50 per cent on precious metals. This may lead to smuggling, recycling and a drastic fall in the import of the yellow metal this year.
In his budget speech, Mukherjee has proposed a hike in custom duty of Rs 300 per 10 gram on gold from the current Rs 200. He has also proposed to hike customs duty on silver from the current Rs 1000 to Rs 1500 per kilogram. The levy on rhodium, used in polishing jewellery, has been cut to 2 per cent from 10 per cent.
“Increase in custom duty will certainly be passed on to customers and so they have to be ready to pay more for the precious metals. However, reduction in raw material tax will push up refinery production, leading to greater circulation of used gold and decline in gold imports,” said a city-based bullion company.
Though prices are likely to go up, it is unlikely to crimp demand. Gold prices zoomed to a high of Rs 18,700 per 10 gm during November-December. It is now hovering around Rs 16,500-16700 per 10 gram.
Pankaj Parekh, eastern regional chairperson of the Gems and Jewellery Exports Promotion Council, said the hike in customs duty was “not very exciting news”.
“Earlier there was a customs duty of Rs 200 for gold, when the price of the yellow metal was Rs 12,000 per 10 grams. Now the duty is Rs 300 when the price of gold is Rs 17,000 per 10 grams. The percentage remains the same,” Parekh told The Telegraph.
