India’s Minister of State Ruled Out Any Plans to Slash Gold Import Duty Now.

NEW DELHI : Just weeks after the Finance minster of India assured to review the proposal of easing gold import duty, the Minister of State (Revenue) ruled out any plans to consider the same. In a written reply in Lok Sabha on Friday, Mr. J.D. Seelam, the Union State Minister for Finance informed that presently the Govt. is not considering to ease the gold import duty as they are focused on reducing the ballooning current account deficit of the country.

In the views of the increasing current account deficit (CAD) of the country, Mr. Seelam told the Lower House of Parliament last day that they are looking out for ways to reduce CAD which has touched the record of $ 88.2 billion in the period of 2012-13. Govt. is at present targeted in pulling down the CAD to $ 50 billion, after which they will be considering on easing the gold import. Until then, the Govt. has no plan to slash the current import duty.

With the intention of curbing the swelling CAD of the country, the RBI had issued various regulatory measures that could reduce gold import. The import duty on gold was hiked thrice over the year, increasing it from 2 % to 10 % in 2013. The series of regulations paved way for decline in gold import, which according to the jewelers and traders in India affected their business badly. As a result, scarcity of gold failed to satisfy the gold appetite of the customers, when the wedding season in India was at full swing.

Gold import that spiked 162 tonnes in May 2013, dropped by 19.3 tonnes within 4 months of inducing the10 % import duty hike. As per reports, Govt. collected revenue of Rs. 75.9 billion in the form of import duty in the last six month of 2013. At the same time, Gold smuggling also increased uncontrollably in India over the year.

Source : metal.com