Govt Hikes Import Tax On Gold From 7.5% To 12.5% Amid Declining Rupee

Mumbai: The central government has raised the basic import tax on gold to 12.5% from 7.5% as the Indian rupee declined to a record low. India, the world’s second-biggest consumer of gold, imported gold worth $6.03 billion in May, a nine-fold rise from a year earlier.

India, the world’s second-largest consumer of gold, is currently witnessing higher trade and current account deficit amid volatile global macroeconomic conditions. Also Read: Govt Increases Export Duty On Petrol By ₹6 Per Litre, Diesel By ₹13 Per Litre

In May, the country’s trade deficit widened to a record level of $ 24.29 billion. India imported gold worth $6.03 billion in May, nine times more than a year ago.

India imported gold last year, the highest in a decade, as demand recovered after the pandemic. Raising import duties on goods is a way of curbing imports by making them costlier. The move is in contrast to last year’s when the Center slashed the tax to 7.5 per cent in the budget.

Earlier in the year, the country’s leading jewellers urged the government to reduce import duty on gold from 7.5 per cent to four per cent in Budget 2022 to reduce the smuggling of gold.

Countries such as China, USA and Singapore had done away with the import duty on gold to strengthen the domestic market.

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