Zoom News : Feb 01, 2021, 05:32 PM
New Delhi: Finance Minister Nirmala Sitharaman in Budget 2021 proposals said that the government will rationalise customs duty on gold and silver. Currently, gold attracts 12.5% import duty. The government announced cut in customs duty on gold and silver to 7.5% from 12.5%. Indian imports bulk of its gold and silver requirements.Since the duty was raised from 10% in July 2019, prices of precious metals have risen sharply and to bring it closer to previous levels, we are rationalizing custom duty on gold and silver, the finance minister said.On MCX, gold futures slumped 3% or about ₹1,500 per 10 gram to ₹47918. In comparison, gold prices were 1.2% higher in global markets at $1872.4 an ounce."Reducing import duty on gold to 7.5% is a step in the right direction and in line with the long-standing demand of the gems and jewellery industry. Higher import duty was not only indirectly promoting illegal gold transactions but also eroding government’s revenue. The import duty reduction will make trade compliance. Moreover, the government should also focus on strengthening the e-governance system to beef up the tracking mechanism of illegal transactions of gold. All in all, a transparent trade always boosts consumer confidence," said Ahammed MP, Chairman, Malabar Gold & Diamonds.However, an Agriculture Infrastructure and Development Cess (AIDC) has been proposed on import of specified goods. To ensure that imposition of cess does not lead to additional burden in most of these items on the consumer, the basic customs duty rates has been lowered, the government said. This cess shall be used to finance the improvement of agriculture infrastructure and other development expenditure.So silver and gold (including imports by eligible passengers) will attract basic customs duty of 7.5% and AIDC of 2.5%.Silver futures on MCX were off day's high but were trading 5.5% higher at ₹73,508 per kg tracking a 10% jump in global markets amid a GameStop-style squeeze.