Ministry of Trade Urges Reduction in Gold Import Duty

SEATTLE (Scrap Monster): The Ministry of Trade in India has called for reduction in tariffs on gold imports into the country, saying it will help in curbing illegal shipments of the yellow metal into the country.

The Trade Ministry, in its request to the Finance Ministry, has urged reduction of duty on gold imports from current levels of 12.5% to at least 10%. However, one needs to wait to see whether the Finance Ministry will approve the recommendation.

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It must be noted that the Ministry had lifted the tariffs in July this year, in a bid to curb purchases. There has been a drastic reduction in gold import volumes since then. As per official data published by the World Gold Council (WGC), gold imports recorded 23% year-on-year decline in the third quarter of 2022, subsequent to tariff increase.

The All India Gem and Jewellery Domestic Council (GJC) has requested the government to reverse the tax increase implemented in July. In addition, it has also demanded cut in goods and service tax (GST) from 3% to as low as 1.25%.

The higher import tax on gold has dried up gold imports through official channels. At the same time, illegal gold imports have become rampant. GJC urged the government to fix the duty in the range of 4% to 6% in the long term, which in turn could deliver good enough revenue to the government and result in reduced illicit gold trade.