The Central Government today has cut the import tariff value of gold from USD 573 per 10 grams to USD 530 per 10 grams, while for silver the tariff value has been kept unchanged at $1,036 per kg. After crude oil, gold is the most imported commodity in India in terms of value.
The tariff value which is released fortnightly by The Central Board of Excise and Customs (CBEC), is the base price on which the customs duty is determined to prevent under-invoicing and discourage import of gold to ease pressure on balance of payments.The import duty on gold was fixed at 2 per cent of the value instead of the earlier rate of Rs 300 per 10 grams. On silver, the import duty was pegged at 6% as against Rs 1,500 per kg earlier. India, the world's biggest gold consumer imported 967 tonnes of the yellow metal in 2011, the government has sought to curb consumption through fiscal measures.
Bullion traders and Jewellers have opposed the recent hikes in tariff value as it would hit demand as the increased costs have to be passed on to consumers. To check the trend of rising gold imports early this year, the government had changed the duty structure on gold and silver from specific to value-linked, making precious metals more expensive.
In the Budget for 2012-13, the government has further tweaked the duty structure and hiked the basic customs duty on standard gold bars from 2 per cent to 4 per cent and that on non-standard gold from 5 per cent to 10 per cent.
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