India increases import duty on gold and silver findings, coins of precious metals to 15%

NEW DELHI : The Finance Ministry has increased import duties on gold and silver findings, as well as coins of precious metals, to 15%. This comprises a Basic Customs Duty (BCD) of 10% and an additional 5% under the Agri Infrastructure Development Cess (AIDC), with an exemption from the Social Welfare Surcharge (SWS). Earlier, duty was 10 per cent. “Gold or silver findings’ means a small component such as hook, clasp, clamp, pin, catch, and screw back used to hold the whole or a part of a piece of jewellery in place.

The Ministry has also hiked import duty on spent catalysts containing precious metals to 14.35 per cent (BCD at 10 per cent and AIDC at the rate of 4.35 per cent). There will be SWS. Spent organic-based catalysts that contain precious metals have traditionally been treated by incineration to recover their precious metal content.

Earlier rates on all these were 10 per cent and there were no AIDC. New rates have been made effective from January 22, the notification added. A Finance Ministry official said that the move aims to prevent circumvention of the duty on gold and silver bars after a surge in imports in the last two months of gold findings: hooks, clasps and other components used to make jewellery.

“The imposition of agriculture, infrastructure and development cess on Gold and Silver Findings is to bring them at parity with the overall customs duty rates on gold and silver,” Gunjan Prabhakaran, Partner with BDO India said.

India is the world’s second biggest consumer of gold, which is supplied almost entirely through imports

The objective is to prevent evasion of duties on gold and silver bars, following a recent uptick in imports of gold findings such as hooks, clasps, and other components used in jewellery crafting, the report said quoting a government official. 

India holds the position of being the world’s second-largest consumer of gold, with almost all supplies coming from imports. 

Gold Prices

Gold prices experienced an upward movement during the morning session of trading in the domestic futures market on Tuesday, January 23, influenced by favourable global cues.

In international markets, gold prices saw an increase as the US dollar dipped, with investors eagerly anticipating interest rate decisions from various central banks and a cascade of economic data scheduled for release in the United States later in the week.

As gold is priced in dollars, its weakness is positive for the yellow metal. Besides, the expectations of rate cuts underpin gold prices. In the case of low interest rates, the opportunity cost of holding gold is also lower, making gold more attractive.

Around 10:05 am, MCX Gold traded 0.12 per cent higher at ₹61,964 per 10 grams.