Wednesday, September 18, 2013

India to Further Raise Gold Tax

The numbers really are quite amazing. India's current account deficit in fiscal 2012-2013 was $88 billion or 4.8% of GDP. Of the CAD, $48 billion was gold imports. The country is importing gold to the tune of 2.62% of GDP; the same percentage in the U.S. would be $436 billion, a lot of money to sit idle.

And idle a lot of it is, with just one of the country's temples, the Tirupati temple, receiving  around 90 kilograms of gold per month in offerings, almost 1.1 tonnes of gold per year!
Front futures $1297.70 last.
From the Economic Times:

Import duty on gold jewellery likely to be hiked to 15%
NEW DELHI: The government is likely to increase import duty on jewellery from 10 per cent to 15 per cent with a view to check inward shipment of gold besides protecting domestic manufacturers.

According to sources, a notification to this effect is likely to be issued shortly.

Besides containing import of gold, the proposed hike in jewellery duty seeks to provide level playing field to domestic jewellery makers.

The government had last month hiked import duty on gold for the third time in 2013 to 10 per cent. Duties for silver and platinum were also increased to 10 per cent. Besides, customs duty on gold dore bars, ore or concentrate were raised to 8 per cent from 6 per cent.  ...MORE