Finance Minister Nirmala Sitharaman has asked the commerce ministry to issue a notification on restricting imports of platinum alloy, sources told CNBC TV18 on Wednesday.
According to sources, the Finance Minister asked the Director-General of Foreign Trade (DGFT) to issue notification in order to remove disparity on import of Gold and Platinum alloy.
India is the world’s second biggest consumer of gold after China. An alloy containing 98 percent gold and 2 percent Platinum is considered as platinum alloy, leaving scope for importers to import 'Platinum alloy to meet increased gold demand.
However, the use of platinum alloys by a section of bullion importers has been a cause of concern. Such trade malpractices threaten to derail the progress of the industry towards price and quality standardisation and ethical practices.
On October 3, last year, the government raised the Customs duty on platinum to 15.4 percent from 10.75 percent after noting misuse of import of Platinum Alloy to address demand of Gold at reduced import duties.
Earlier in July, the government had raised the import duty on gold to 15 percent while maintaining the import duty on platinum at 10.75 percent.
Due to the duty differential, certain importers of bullion were able to import refined gold that was masked as platinum alloy by paying a lesser charge of 10.75 percent.
Sources had told CNBC-TV18 that there had been several import cases where platinum alloys with just 4 percent platinum and the rest were gold, and they were being cleared at the reduced rate of 11 percent.
Industrial Platinum and palladium are used in manufacturing precious metal chemicals, compounds (noble metal compounds and solutions), and catalytic converters continue to attract low import duty.
(Edited by : Pradeep John)
