In his speech, the finance minister blamed the high import prices of gold and other precious metals to be primary drivers for current account deficit. The custom duty on standard gold bars, gold coins and platinum of more than 99.5% purity would also attract 4% duty.
The non-standard ones would attract 10% duty from the earlier 5%. “Basic duty on gold ore, concentrate and dore bars for refining is being enhanced from 1% to 2%. On the excise side, duty on refined gold is being increased in the same proportion from 1.5% to 3%,” said Mukherjee.
Meanwhile, the Gems and Jewellery Export Promotion Council (GJEPC) said that the tax environment is driving investments out of India. “The increase in duty (custom duty) will lead to corrupt state of affairs due to greater probabilities of trafficking of gold into the country through illegal channels,” said Rajiv Jain, chairman, GJEPC. “The interest in buying gold jewellery and gold bars will also go down with consumers having to pay more duties.”