Government hikes import duty on gold and silver to 10%
Posted on: 14/Aug/2013 12:36:37 PM
The government on Tuesday raised import duties on gold, silver and platinum as part of its strategy to squeeze non-essential imports in order to reduce the pressure on the current account deficit.Despite fears of triggering an increase in gold smuggling, this marks the fourth round of customs duty hikes on the yellow metal in the last 20 months.Finance minister P. Chidambaram indicated on Monday that the government is likely to announce more measures to curb other non-essential imports, including luxury items, as it looks to contain the current account deficit to 3.7% of gross domestic product (GDP) in 2013-14 compared with 4.8% of GDP in the last fiscal year.
While the import duty on gold and platinum has been increased to 10% from 8%, the duty on silver has been raised by 4 percentage points to 10%, Chidambaram informed Parliament. He said the government plans to restrict gold imports to 850 tons this fiscal against 950 tons last fiscal.
The finance minister announced a slew of measures to ensure adequate capital inflows into the country, including asking public sector financial institutions to raise funds abroad through quasi-sovereign bonds, liberalizing external commercial borrowing guidelines and NRE (non-resident external account)/FCNR (foreign currency non-resident) deposit schemes.
The government expects revenue of Rs.4,830 crores from the duty hikes for the rest of the fiscal year ending 31 March 2014,
