India Raises Precious Metal Duty

by Mary Swire, Tax-News.com, Hong Kong

25 January 2012

India has raised the import duty on silver and gold, in a move set to increase revenues with prices for the precious metals expected to remain buoyant.

Gold import duty was raised by 90% to 2% of value whereas tax on silver doubled to 6% of value, according to a government statement. Previously, gold duty was charged at flat INR300 (USD5.99) per 10 grams and silver at INR1,500 per kilogram

The price of gold has soared in recent months, with the metal hitting USD1,920.30 per ounce on the international market last September; a new record.

The change in duty would mean paying approximately INR570 per 10 grams for gold, and almost INR3,000 per kg for silver.

The last time import duty on precious metals was raised was in February 2010, although it has had minimal impact on demand. There have, however, been concerns that another hike may result in a boost in smuggling.

The duty hike comes as India's government attempts to meet its fiscal deficit target after increasing outlays across the country.

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