Customs duty slashed on gold to be reviewed

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

- Rajeev Jayaswal

NEW DELHI:

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 the case of gold, imports of the precious metal surged after a sharp duty reduction in July last year, but exports of finished goods such as gem and jewellery contracted, the people said, requesting anonymity.