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Tuesday, January 17, 2012

Government hikes the import duty on Gold, Silver



In the wake of rising trade deficit government of India raised the import duty on precious metals gold and silver today. Earlier duty was applicable on the weight which now shall be applicable on the value of the transaction.

Earlier
Gold
Rs. 300 per 10 Gram
Silver
Rs. 1500 per Kilo

Now
Gold
2% of the transaction value
Silver
6% of the transaction value

If we take today’s gold price Rs. 28,000 per 10 gram, import duty comes out to be Rs 560 per 10 gm which was Rs.300 per gram earlier.
Similarly for silver @ 52,000/kg import duty comes out to be Rs. 3120 per Kilogram in comparison with the earlier figure which was Rs. 1500 per kilogram.
With gold and silver becoming essential constituents of individual’s portfolio, channeling of black money into precious metals, increasing consumption for making jewellery are some of factors responsible for rising gold import in India.

As gold is purchased in dollar, rising import was resulting in massive outflow of dollars from the Indian economy making Indian rupee weaker.
This was another reason apart from dollar outflow by oil marketing companies which was making Indian rupee weaker. To curb the depreciating rupee, Indian government has hiked the import duty.

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