Govt hikes import duty on gold jewellery to 15%

The government yesterday announced an increase in the import duty on imported gold jewellery, to 15 per cent from the existing 10 per cent, in a bid to help jewellery makers in the country withstand competition from cheap imports and reduce the country's widening current account deficit.

As part of the measures to contain the current account deficit, the government has been periodically raising customs duty on gold upwards in the past two years.

However, the customs duty on articles of jewellery and on goldsmiths' or silversmiths' wares has not been revised upwards in line with the changes in the duty rates on gold, silver and platinum.

The duty on articles of jewellery and on goldsmiths' or silversmiths' wares has remained unchanged at 10 per cent although the duty on gold, silver and platinum has been revised periodically since 17 January 2012.

As of now, the customs duty on primary metal and articles of jewellery/goldsmiths' or silversmiths' wares is 10 per cent.

The import duty on gold jewellery was 8 per cent and 4 per cent in the case of silver jewellery in January 2012.

Since jewellery making in India continues to be a labour-intensive industry, employing millions of artisans, the government said that in the absence of any duty differential between articles of jewellery and primary metal, there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India.

To protect the interests of small artisans, the customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof is being increased from 10 per cent to 15 per cent.

A notification revising the rates of customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof has been issued today.

Prior to 17 January 2012, the import duty on standard gold (of purity 99.5 per cent and above) stood at Rs300 per 10 gm. It was raised to 2 per cent on 17 January 2012 and thereafter to 4 per cent in the Budget 2012-13.

The duty was further raised to 6 per cent on 21 January 2013 and thereafter, it was increased to 8 per cent on 5 June 2013. The duty on gold was last revised on 13 August 2013, when the duty was increased to 10 per cent.

 The customs duty on silver, which was Rs1,500 per kg prior to 17 January 2012, was raised to 6 per cent on 17 January 2012. It was further raised to 10 per cent on 13 August 2013.

The customs duty on platinum has been revised periodically in tandem with the duty on gold.

India's current account deficit touched all time high of 4.8 per cent of the GDP in 2012-13.

India, the world's top consumer of gold, imported gold valued at $650 million and $2.2 billion, in August and July, respectively.

Finance minister P Chidambaram had earlier said gold import would be contained below 845 tonnes shipped in last fiscal.