Gold imports increase in 2016, after govt earns 25,000 crore in Apr-Dec 2015

Since the imposition of the import duty on gold in 2013, industry analysts on several occasions asked the government to reduce the duty on yellow metal as it has resulted in gold smuggling The Dollar Business Bureau

Gold imports up again in 2016, after govt earns Rs.25,000 crore in April-December 2015

In the Budget ‘16, Arun Jaitely had announced a 12.5% excise duty on gems & jewellery industry with input credit, 1% excise duty on the industry without input credit

After a significant decline in gold imports during the period April-December 2015-16, the inbound shipments of yellow metal surged by 62% in January and 85% in the subsequent month. During the first three quarters of the current financial year, the government managed to save Rs.25,000 crore due to less imports of gold and the imposition of a 10% import duty on the metal in 2013. This also helped the government reduce its current account deficit (CAD) by a considerable margin. A less import of yellow metal, together with a sharp decline in global crude prices which has helped the government slash its import bill by about Rs.1.5 lakh crore, have resulted in India reducing its CAD during the financial year 2015-16. Since the imposition of the import duty in 2013, industry experts on several occasions have asked the government to reduce the duty on yellow metal as it has resulted in gold smuggling. The government, however had turned down their demand, saying the smuggled gold was insignificant as compared to the country’s average imports of about 1,100 tonnes of gold per year. Since the NDA-led government came into power in May 2014, it has taken a slew of initiatives to reduce the country’s import bill. These being the introduction of the Gold Monetisation Scheme, along with Sovereign Gold Bond Scheme, Gold Coin and Bullion Scheme, that were aimed at channelising gold stashed in homes and temples across the domestic market. The government believes that the country has more than 20,000 tonnes of gold stashed in its domestic households, trusts and temples. In order to attract and encourage people to earn interest on the gold by making deposits in the banks, the Govt. simplifies the schemes periodically. In the Union Budget 2016, Finance Minister Arun Jaitely announced the imposition of a 12.5% excise duty on gems & jewellery industry with input credit and a 1% excise duty on the industry without input credit, a move which the industry says, can’t comply with the industry. Presently the All India Gem and Jewellery Trade Federation (GJF) and India Bullion & Jewellers Association (IBJA), along with over 3 lakh jewellery manufacturers and artisans, are on a strike against the newly-proposed excise duty regulations.

March 07, 2016 | 03:05pm IST

Related Topics:

The Dollar Business Bureau - Mar 07, 2016 09:46 IST

Gold imports increase in 2016, after govt earns 25,000 crore in Apr-Dec 2015

We like you just the way you are.