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India has increased customs and excise duties on gold, platinum, and silver as the Government again attempts to bring the current account deficit (CAD) under control.
Imports of gold and silver have continued to rise in recent months. The latest figures for the four months from April to July show an 87 percent surge in gold imports over the same period in 2012. The rush to import silver was even more marked, increasing by nearly 200 percent.
In an effort to dampen demand the Government has announced that the duty on gold and platinum has now gone up from 8 percent to 10 percent, and that on silver from 6 percent to 10 percent. Also unveiled is that gold dore bars and gold ore/concentrate are to attract additional customs duties at 8 percent, while the duty on silver dore bars has risen from 3 percent to 7 percent.
The excise duty on refined gold bars produced from gold ore or concentrate has been increased from 7 percent to 9 percent. Similarly, the excise duty on silver manufactured from silver ore or concentrate, together with silver or gold dore bars made via copper, zinc or lead smelting, has been doubled, to 8 percent.
The Government has been trying to drive the CAD down through changes to duty and excise rates for over a year. In particular, it has striven to curb gold imports, and has hiked the import duty on standard gold four times since January, 2012.
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