As part of measures to contain the current account deficit, the customs duty on gold has been revised upwards periodically in the past two years. Prior to 17th January 2012, the import duty on standard gold (of purity 99.5% & above) was Rs. 300 per 10 gm. The duty was raised to 2% w.e.f. 17th January 2012; thereafter, it was raised to 4% in the Budget 2012-13. The duty was further raised to 6% w.e.f. 21st January 2013 and thereafter, it was increased to 8% w.e.f. 5th June 2013. The duty on gold was last revised on 13th August 2013, when the duty was increased to 10%. The customs duty on silver which was Rs. 1,500 per kg prior to 17th January 2012, was raised to 6% w.e.f. 17th January 2012. The duty was further raised to 10% w.e.f. 13th August 2013.
The customs duty on platinum has been revised periodically in tandem with the duty on gold.
The customs duty on articles of jewellery and on goldsmiths™ or silversmiths™ wares has, however, not been revised upwards in line with the changes in the duty rates on gold, silver and platinum. The duty on articles of jewellery and on goldsmiths™ or silversmiths™ wares has remained unchanged at 10% although, as mentioned above, the duty on gold, silver and platinum has been revised periodically since 17th January 2012. Thus, at present, the customs duty on primary metal and articles of jewellery/goldsmiths™ or silversmiths™ wares is same, i.e. 10%.
Jewellery making is a labour intensive industry. Millions of artisans are dependent on this sector for their livelihood. In the absence of any duty differential between articles of jewellery and primary metal, which was 8% in the case of gold jewellery and 4% in the case of silver jewellery in January 2012, there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India. To protect the interests of small artisans, the customs duty on articles of jewellery and of goldsmiths™ or silversmiths™ wares and parts thereof is being increased from 10% to 15%.
A notification notifying the revised rates of customs duty on articles of jewellery and of goldsmiths™ or silversmiths™ wares and parts thereof has been issued today.
Tags: Current account, Gold, India, January 2012, Jewellery, Precious metal, Silver, Tariff