Hike in Import Duty for Gold and Silver, Another Highlight of India's 2010 Budget
India's Union Budget for the year 2010-11 has gained both positive and negative reviews, and most points included in the budget have become issues of massive debates. Another such point is the increase of import duty on gold and silver, especially with both the metals now becoming more and more expensive with each passing day.
While the import duty on gold has been hiked to Rs. 300 per gram, from Rs. 200 a gram, that on silver has been taken from Rs. 1,000 per kilogram to Rs. 1,500 per kilogram.
While experts feel that the increase is not huge enough to have a definite impact, jewelry makers have been worried as the rise in import duty might push the prices of the metals even further. But this is not very likely as the import duty on gold was levied when the price of the metal was between Rs. 10,000 and Rs. 11,000 a gram, which is presently somewhere around Rs. 16,000 to Rs. 17,000 a gram.
Also, on its part, the Government has tried to balance the increases out by offering a few benefits, like the basic customers duty on rhodium, a precious metal used to polish jewelry, has been reduced to a mere 2% from 10%.
There are some who feel that the Government should have provided more benefits to even out the increase in duty, especially since the jewelry industry is recovering from the recession.
“With unprecedented recession faced in the recent past, the industry, which is now in a recovery mode, has posted $25 billion of exports in 2008-09. It needs constant support and aid from the ministry. One way the government could have helped the industry was by lowering the rate of presumptive profit under the benign tax procedure, which has been our demand for a while now, as it would have helped India truly establish itself as an international hub for diamonds, gems and jeweler", said Vasant Mehta, Chairman of Gems & Jewellery Export Promotion Council (GJEPC).