The Central Board of Indirect Taxes and Customs (CBIC) has notified the increase in basic customs duty on import of gold to 12.5 per cent from 7.5 per cent. The step has been taken in an effort to curb imports, as the rupee slumped to a record low.
The Board issued a notification on Thursday said that “the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), No. 50/2017-Customs, dated the 30th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 785(E), dated the 30th June, 2017, namely :- In the said notification, in the Table, – (i) against S. No. 354, in Column (4), for the entry “6.9%”, the entry “11.85%” shall be substituted; (ii) against S. No. 356, in Column (4), for the entry “7.5%”, at both the places, the entry “12.5%” shall be substituted; (iii) against S. No. 357A, in Column (4), for the entry “7.5%”, the entry “12.5%” shall be substituted.”
India, the world’s second biggest consumer of gold, is currently staring at higher trade and current account deficits amid volatile global macroeconomic conditions.
India had imported the most amount of gold in a decade last year, as demand recovered after the pandemic. Raising import duties on goods is one way to curb imports by making them costlier. This step is a reversal of last year when Centre cut the tax to 7.5 per cent in the budget.
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