Gold, silver to cost more; govt changes duties to net Rs 600 crore

NEW DELHI: Gold and silver will become costlier with the government on Tuesday tweaking the customs and excise duty structure on precious metals, a step which will make government richer by Rs 600 crore in the next two-and-half months itself.

On account of changes in duty structure from specific to value-linked, traders said the gold will become expensive by about Rs 250 per 10 gm, silver by Rs 1,600 per kg and imported diamond by 2 per cent. Platinum too will cost more.

As per the changes, customs and excise duty will now be levied on the value of the precious metals instead of a fixed amount, meaning that the incidence of duty will move up with the rise in prices of the goods.

According to finance ministry notifications, the import duty on gold has been fixed at 2 per cent of the value, instead of the earlier rate of Rs 300 per 10 grams. On silver, the import duty has been pegged at 6 per cent against Rs 1,500 per kg earlier. The government has imposed import duty of 2 per cent on diamond.

With respect to excise, the duty on gold has been fixed at 1.5 per cent of the value against the earlier fixed rate of Rs 200 per 10 grams. Silver will attract excise of 4 per cent compared to a fixed duty of Rs 1,000 per kg.

"The old rates were fixed 4-5 years ago. In the last few years, prices have increased substantially so the change has been made to bring duties in line with market prices," Central Board of Excise and Customs ( CBEC) chairman S K Goel said.

India is the largest consumer of the yellow metal. With rising gold prices, its imports shot up by 54 per cent during the nine-month period ending December, 2011, to USD 45.5 billion (Rs 2.3 lakh crore).

Gold firmed up by Rs 35 to Rs 27,925 per 10 grams, while silver gained Rs 575 to Rs 52,725 per kg in bullion market here. 

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Mankad (Pune)
18 Jan, 2012 12:34 AM
This is not a good move. Government is discouraging savings. For all its faults, India has one major advantage over Western countries in that Indians are prone to save a lot and invest for their future. Investment in gold can be sold anyday to pay for retirement, children's education, marriage etc. Now by discouraging investment in gold government is beginning to tax family savings.

Naadodi (Chennai)
18 Jan, 2012 12:22 AM
If people are trying to save money through any investment, government will put some 'funda' on the investment so that people will loose more money. How people will save and survive? Government is making money out of people sweat instead of doing some good thing in India. Bravo Congress...

SR (columbus)
17 Jan, 2012 10:16 PM
Instead if they stop the black marketting of gold ..govt will get Rs 6000 crore more

Raaaj (Mumbai)
17 Jan, 2012 10:11 PM
This Govt. if full of IDIOTS !

bhushan (india)
17 Jan, 2012 10:02 PM
the govt could consider a new entertainment tax on all happy tunes ( there by the music industry will be encouraged to produce only sad songs/ music )

Mehul (USA)
17 Jan, 2012 09:57 PM
This is what I call penny wise and pound foolish. India is going to loose in Big way on exports ! God Save INDIA

dips (mumbai)
17 Jan, 2012 09:39 PM
Govt. will suck last blood out of middle class via the taxes it seems!! welcome to democracy!! LINK
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