Govt Likely to Revise Customs Duties on Gold, Other Items

Customs duties are often tweaked in annual budgets with clear objectives

- Rajeev Jayaswal

The government is reviewing customs duties on over two-dozen items, including gold, and may raise the levy on the yellow metal if the recent duty reduction raised consumption instead of achieving the stated policy objective of domestic value addition, two people aware of the development said.

Customs duties are often tweaked in annual budgets with clear objectives—to shield citizens from inflation, to ensure sufficient supplies of essential commodities, to eliminate duty inversion, and to encourage domestic manufacturing by reducing taxes on inputs compared to finished goods. In case of gold, import of the precious metal surged after the duty reduction in July, but export of finished goods such as gems and jewellery contracted, they said.