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The clamour for removal of one per cent excise duty on branded jewellery is likely to grow louder with the Government's move to hike customs duty on imports of gold and silver through a change in the manner of levying the duty, bullion dealers and jewellers said.
The Government today announced it has changed the import duty on gold to two per cent of value from the current system of flat duty of Rs 300 per 10 gm. For silver, the duty has been changed to six per cent compared with Rs 1,500 a kg.
“This move is unlikely to have much of an impact. This would be easily digested by the market,” said Mr Rajesh Mehta, Chairman, Rajesh Exports Ltd. According to him, this move may evoke some “knee-jerk” response but overall the impact would be muted.
Mr Prithviraj Kothari, President, Bombay Bullion Association, also voiced a similar opinion.
“This will not impact demand or prices,” he said.
Although this alteration in duty is mostly seen as having a negligible impact on bullion trade, jewellers may raise the issue of one per cent excise duty on branded jewellery.
This has a more detrimental impact on demand of gold jewellery rather than the duty change, jewellers and bullion dealers said.
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