The Central Government has cut the import tariff value of gold to $530 from $573 per 10 gram. For silver, however, the tariff value has been kept unchanged at $1,036 a kg.
According to an official release here, the Central Board of Excise and Customs issued a notification to this effect on Thursday.
Announced each fortnight after review of global market rates, the tariff value of gold and silver are the base prices on which the customs duty is levied on the precious metals to guard against under-invoicing and discourage large-scale imports so as to ease the pressure on balance of payments.
With India being the world's biggest gold consumer, as is clear from imports of 967 tonnes of the yellow metal in 2011, the government has sought to curb consumption through fiscal measures. Analysis has shown that in terms of value, gold is the next highest item on the list of imported commodities after crude oil.
To check the trend of rising gold imports earlier this year, the government switched over from specific rates to ad valorem rates of duties. Accordingly, instead of a levy of Rs.300 per 10 gram, the government pegged the import duty on gold at 2 per cent of the value. Likewise, it fixed the import duty on silver at 6 per cent in place of the specific levy of Rs.1,500 a kg.
In the Budget for 2012-13, the government has further tweaked the duty structure and hiked the basic customs duty on standard gold bars from 2 per cent to 4 per cent and that on non-standard gold from 5 per cent to 10 per cent. In protest, bullion traders and jewellers have gone on a strike which has now entered the seventh day as they fear that the increase in duties would impact their business as a pass-through of higher prices would curtail consumer demand.
