The Cost of Smuggling Gold

India’s Finance Minister asked to review GST and cut down import taxes on gold to brace illegal gold imports

Post By : IJ News Service On 07 December 2022 12:20 PM

Government trade statics revealed that gold imports dropped by a whopping 23% in the time spanning July 2022 to September 2022.

In 2021 in the month of September, gold bars provisional imports were valued at INR1,613.31 and in the previous year in 2020 at INR1082.11. July of 2021 valued provisional import of gold bars at INR972.99 and in 2020 they were valued at INR198.99. India’s FY 2022 imports have already reached INR3,440.94 from last year’s import valued at INR2,542.88 (for 2021) creating a wide trade deficit. After China, India is the largest consumer of gold. Imports figures are mostly affected by demand of gold jewellery. this year however the demand for silver jewellery has seen an upsurge.

As trade figures dropped to 23% in the past 3 months, the commerce ministry is considering to reduce import taxes on gold to control the impact of illegal imports. According to Bloomberg gems and jewellery industry bigwigs have collectively asked the finance ministry to reduce the tariff to about 10% from the current 12.5%. Finance Minister Nirmala Sitharaman, had raised tariffs in July due to which India’s purchases fell. She is aware of the widening trade deficit, yet illegal imports have claimed high amounts of the government’s revenue in the past 3 months. Bloomberg reported that the Gems & Jewellery Domestic Council is seeking a reversal of the increased GST to 1.25% from the current 3%.

News courtesy Bloomberg.

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