Not Considering Any Proposal to Cut Gold Import Duty: FinMin - The New Indian Express

Not Considering Any Proposal to Cut Gold Import Duty: FinMin

Published: 07th February 2014 03:55 PM

Last Updated: 07th February 2014 03:55 PM

Finance Ministry today said it is not considering any proposal to slash import duty on gold in view of country's Current Account Deficit (CAD) position.

"At present, there is no proposal under consideration to reduce the import duty on gold, taking into account the likely impact on the Current Account Deficit," Minister of State for Finance J D Seelam told the Lok Sabha in a written reply.

In 2013, the government hiked import duty thrice to 10 per cent on import of gold in wake of high CAD which in turn was impacting the value of the rupee. The Reserve Bank too imposed a series of curbs to restrict gold imports.

The CAD had touched a record high of USD 88.2 billion in 2012-13. However, following series of measures, by both the RBI and the government, CAD is likely to fall below USD 50 billion in the current financial year ending March 31.

Gold imports, which had peaked to 162 tonne in May, came down to 19.3 tonne in November after the government hiked import duty thrice in 2013, taking it to 10 per cent.

Finance Minister P Chidambaram had recently said the restrictions on gold imports will be reviewed by March end.

Government collected Rs 7,590 crore revenue in form of import duty on gold during April-December 2013. In 2012-13 fiscal, the collection was Rs 10,463 crore.

Authorities have admitted that curbs were leading to gold smuggling. There has been about 1-3 tonne of gold smuggled into the country every month following the restrictions imposed on shipment last year.

In value terms, gold and silver imports in April-December period declined 30.3 per cent to USD 27.3 billion from USD 39.2 billion during the same period a year earlier.

In the first half (April-September) of current fiscal, CAD narrowed to USD 26.9 billion (3.1 per cent), from USD 37.9 billion (4.5 per cent) in the first half of 2012-13.

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