Photo: Mamta Badkar
India, the world’s largest importer of gold announced today that it is planning on doubling its duty on gold.India’s finance minister Pranab Mukherjee revealed India’s 2012-2013 budget today, which called for an increase in taxes on gold. This would be the second time this year that India increased its import duty on gold.
In his speech Mukherjee said the nearly 50 per cent increase in gold and other precious metal imports has been one of the primary drivers of the current account deficit.
- Customs duty on standard gold bars and coins of purity exceeding 99.5 per cent will be increased from 2 per cent to 4 per cent.
- Customs duty on non-standard gold (gold in unusual forms) will be increased from 5 per cent to 10 per cent.
- Basic duty on gold ore, concentrate and dore bars (semi-pre alloy of gold and silver) for refining will be increased from 1 per cent to 2 per cent.
- Duty on refined gold is also being doubled from 1.5 per cent to 3 per cent.
Last month we reported that India’s demand for gold jewelry fell 44 per cent in the fourth quarter, impacted by the weak rupee and gold volatility. India imported a record 969 metric tons of gold last year, a number that is sure to fall. It now seems more likely than ever that China will take over India’s position as the world’s biggest gold market.