In the budget, the custom duty on gold is increased from 10% to 12.5% to bring down the fiscal deficit and also to recapitalize the banks.
The WGC has reported that up to 95 tonnes of gold were smuggled into India in 2018
- While Jewellery trade associations were expecting a cut in custom duty, this new policy came as a shocking move for them.
- It is reported that an increase in custom duty can prompt customers to buy jewelry from some informal jewelers who use smuggled gold to make ornaments.
- Hence with this new policy, it is expected that gold price will be raised to 35,000 rupees per 10 grams.
- With the augmentation in the gold price, it is believed that demand in the market will be affected.
- Strict vigilance is the need of the hour to check on smuggling of gold in the country.