GJF Urges to Curb Customs Import Duty on Gold By 4%

NEW DELHI (Scrap Monster): GJF (All India Gems and Jewelry Trade Federation) has recommended the government to reduce the customs duty by four percent and to curb only gold of beyond the optimum quantity needed to make jewelry.

GJF called for import duty reduction by at least four percent from the current 10 percent for maintaining a 10 percent difference between the import duties of finished gold and silver ornaments, when compared to raw materials. This is to discourage the entry of low quality jewelry into the nation.

The federation also sought to apply the 80:20 rule only on the gold beyond 55 tonnes, which is minimum required per month for making jewelry. For making jewelry, India needs about 650 tonnes of gold per year.

Gold alone cannot be blamed for the rising current account deficit. GJF added in a statement that the imports of gold in dollar terms decreased significantly to US$ 30 billion levels in the period 2013-14 from the level of US$ 50 billion in 2011-12. Haresh Soni, GJF Chairman stated that the gold imports has decreased by about 20 -25 pct in dollar terms.

Restriction on gold will not only lead tom revenue loss but also encourage a parallel economy that will exert pressure on the rupee as more dollars are required to ensure the supply of smuggled products. GJF representatives added that due to the regulated channel cartel and illegal supply of gold, small jewelers would not get their supply without giving a heavy premium of about 15 to 18 pct. This will put the small jewelers out of their business.