The World Gold Council (WGC), on Tuesday said that the hike in import duty of gold, which was announced by the Finance Minister in the Union Budget, may lead to additional gold smuggling, especially when there is high demand especially during the festival season. In the Union Budget for 2009-10, Pranab Mukherjee, announced a hike of 100 per cent in the customs duty on serially-numbered gold bars as well as gold coins to Rs 200 per 10 grams.
Moreover, the customs duty on other forms of gold and silver also has been doubled to Rs 500 per 10 grams while Rs 1,000 per kilogram, respectively.
"We hope that this higher duty rate does not add to significant trading through non-official channels.
The difference in price between the internationally-sourced gold and Indian domestic gold widens to 3-3.5 per cent per 10 grams due to additional taxation and this could lead to additional smuggling, especially during periods of high demand during festival season," WGC said in a statement in Mumbai.
Moreover, WGC has warned that the hike in the import duty of gold would put added pressure on the gold market.
The Indian Government in its recent Union budget announced that it will invest more in the agricultural as well as industrial and social sectors in an effort to boost consumer confidence and drive economic growth, which resulting in a budget increase of 36 per cent. To help pay for this package, the gold industry has become a tax target, WGC said.
Moreover, the customs duty on other forms of gold and silver also has been doubled to Rs 500 per 10 grams while Rs 1,000 per kilogram, respectively.
"We hope that this higher duty rate does not add to significant trading through non-official channels.
The difference in price between the internationally-sourced gold and Indian domestic gold widens to 3-3.5 per cent per 10 grams due to additional taxation and this could lead to additional smuggling, especially during periods of high demand during festival season," WGC said in a statement in Mumbai.
Moreover, WGC has warned that the hike in the import duty of gold would put added pressure on the gold market.
The Indian Government in its recent Union budget announced that it will invest more in the agricultural as well as industrial and social sectors in an effort to boost consumer confidence and drive economic growth, which resulting in a budget increase of 36 per cent. To help pay for this package, the gold industry has become a tax target, WGC said.
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