The Central government has raised the basic import duty on gold by 5 percent. The basic import duty has now become 12.5 percent from 7.5 percent yesterday. The decision was reportedly taken in view of the dropping Indian currency against the US dollar. The country fulfils most of its gold demand through import.
On Thursday, gold prices had fallen by Rs 29 to Rs 50,700 per 10 grams. Globally, gold was trading 0.12 per cent lower at USD 1,815.40 per ounce in New York. However, after the new announcement, it is certain the gold rates will increase at least by five percent.
The total import duty levied on gold in India comprises three components -- base duty, agricultural cess and social service surcharge. While the agricultural cess is unchanged at 2.5 percent, the surcharge has been discontinued. The net import duty now stands at 15.75 percent.
Surenedra Mehta, Secretary, IBJA, told Zee Business, " The way rupee has been dropping against the dollar, a gold rate hike was expected, but we didn't expect the government to announce it so soon".
He said an increase of Rs 2500 per 10 grams is expected in the future.
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