The government has hiked import duty on silver dore (raw form of silver), bars and articles in line with gold and platinum to 14.35 per cent from 9.21 per cent.
Late last year, the government increased the import duty on gold bars and gold dore. Tabling, it decided to increase the duty on articles made from gold, silver and platinum to bridge the duty differential. The move is expected to push up prices in the domestic market when demand has dipped due to high prices.
Vipul Shah, Chairman, GJEPC, said while the increase in duty on jewellery made of precious metals such as gold, silver and platinum is a relief, the import duty on dores which are the raw material in character for manufacture of jewellery needs a clarification from the government.
The current duty hike will push up the duty by 5 percentage points for silver resulting in an increase of price for silver products domestically, he said.
The Council will continue to pursue the same with the government for the overall welfare of the industry, he added.
Hamped by smuggling
Saiyam Mehra, Chairman, All India Gem and Jewellery Domestic Council, said the industry had expected a cut in gold custom duty as the industry was severely hampered due to smuggling and grey market.
The hike in duty on silver will adversely affect the masses. GJC will continue to represent this important issue of the Industry at the meeting with FM on Saturday, he said.
Somasundaram PR, Regional CEO, India at World Gold Council, said high taxes will impede efforts of the industry to make gold an asset class, particularly at a time when gold prices have risen globally. Moreover, the thriving grey market has diluted efforts to reduce cash transactions and penalises organised and compliant players, he said.
Though the Finance Minister had cut the basic duty on gold bars to 10 per cent from 12.5 per cent, it has increased the Agri Infrastructure Development Cess (AIDC) to 5 per cent from 2.5 per cent. In fact, the basic customs duty on gold dore, platinum, silver bar and dore has been pegged uniformly at 10 per cent. The AIDC on gold and silver bars is 5 per cent, while for both dores it is 4.35 per cent. In the case of platinum, the AIDC is 5.4 per cent.
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