Union Finance Minister Nirmala Sitharaman, while presenting Budget 2021, on Monday brought cheer for the gems and jewelry sector by cutting customs duty on the import of gold and silver.
Gold and silver presently attract a basic customs duty of 12.5 percent. After 3 percent GST, it works out to 15.5 percent in levies.
While the cut on duties is at 7.5 percent for gold and silver but there is an additional agriculture infrastructure and development cess at the rate of 2.5 percent.
Meanwhile, the duty for gold dore bar has been reduced to 6.9 percent from 11.85 percent, while silver dore bar would attract 6.1 percent from 11 percent earlier. The gold and silver dore bars also attract 2.5 percent agri cess.
The cut in duty would help curb large-scale gold smuggling, boost gold trade and also boost demand.
The gems and jewelry sector had sought a duty cut to 4 percent. The jewelry sector contributes 29 percent to global jewelry consumption and with the higher cost of making has been under pressure.
India's import duty with the cut today is still the highest in the world. Countries like US, China, Most Middle East countries and many more have cut import duty to zero to encourage imports.
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First Published: Feb 1, 2021 12:51 PM IST
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