No move to cut gold import duty: commerce minister
10 September 2014
Commerce minister Nirmala Sitharaman today said the government was not considering any immediate cut in the import duty on gold, which was increased to 10 per cent last year to check a widening current account deficit (CAD).
While jewellers have been demanding a reduction in gold import duty amidst a spurt in smuggling of the precious metal into the country in order to skirt the high tax rate, the government has been rather unmindful of their pleas.
''I cannot say that gold smuggling has increased because of hike in import duty. CAD has come down, but there is no thought to lower the import duty immediately,'' Sitharaman said.
Following a sudden spurt in gold import in the beginning of 2013, the government had hiked the import duty on the precious metal to 10 per cent in phases (See: RBI weighs further curbs on gold imports).
The Reserve Bank had also imposed certain other restrictions on its shipments, including linking of imports to exports to prevent the outgo of the foreign exchange.
These helped reduce imports of the precious metal to 638 tonnes in 2013-14 from 845 tonnes in the previous fiscal.
The import curbs also helped bring down the CAD to $32.4 billion or 1.7 per cent of GDP in 2013-14, from a high $88.2 billion or 4.7 per cent of GDP in 2012-13.
However, the restrictions are perceived to have increased instances of smuggling.
Government agencies have detected 2,441 cases of gold smuggling in 2013-14, against 869 cases in 2012-13 and 500 cases in 2011-12.