Two days after a downward revision in the tariff value of bullion in view of the slump in global prices, the government, on Thursday, slashed the rates further for gold to $449 per 10 grams and silver to $762 a kg to match the extreme price volatility in international markets.
The reduction in tariff value, according to an official release here, has been announced through a notification by the Central Board of Excise and Customs (CBEC).
With bullion prices plummeting earlier this week, it was on April 16 that the tariff value which, in effect, is the base price on which the customs duty is determined to prevent under-invoicing in imports, was scaled down to $499 per 10 grams for gold and to $890 a kg for silver.
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While gold was ruling at $1,337.86 an ounce in Singapore on Thursday, the price of the yellow metal here was also down to Rs.26,600 per 10 grams, after having declined sharply over the last few trading sessions.
The worry for the government is that while a fall in gold prices is a positive for containing the current account deficit (CAD) as lower prices will act as a disincentive for investment, a slump in prices may lead to a fresh boost in domestic demand and a larger volume of imports.