Business Daily from THE HINDU group of publications
Friday, Feb 23, 2007
ePaper
Business Daily from THE HINDU group of publications Friday, Feb 23, 2007 ePaper |
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Agri-Biz & Commodities
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Gold & Silver Industry & Economy - Excise and Customs Extra duty on gold could help raise Rs 700 cr G. Chandrashekhar
An increase in Customs duty of Rs 100 per 10 g on gold imports can potentially generate over Rs 700 crore in revenue for the exchequer. The current rate of duty of Rs 100 was fixed three years ago when gold prices were ruling at Rs 4,500-5,000 per 10 g. International gold prices have appreciated considerably since 2005, and have almost doubled. Currently, gold prices in the country are as high as Rs 9,500-9,600 per 10 g. Despite high prices, demand conditions continue to be healthy. High and volatile prices do impact demand, but it is likely that consumers are getting used to high prices. Sustained economic growth drives demand up. The total value of annual gold imports in last three fiscals was $10 billion (nearly Rs 45,000 crore). India continues to be the world's largest importer and consumer of the yellow metal. The country imports over 700 tonnes a year. Bullion traders say that the extant Customs duty of Rs 100 is applicable to "numbered TT bars". On other gold imports (in non-numbered form), the rate of duty is Rs 250 per 10 g. It is reported that 40-50 tonnes of gold coins are imported into the country on which lower Customs duty of Rs 100 is levied, leading to loss of revenue.
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