The prices of gold and silver saw a rapid movement in the national capital, Delhi after the Union Finance Minister Nirmala Sitharaman announced acut in import duty on the metals in Budget 2021. According to HDFC Securities, gold prices declined Rs 1,324 to Rs 47,520 per 10 gram on Monday. The precious metal in the previous trade had closed at Rs 48,844 per 10 gram. On the other hand, silver prices jumped Rs 3,461 to Rs 72,470 per kilogram, compared to Rs 69,009 per kilogram in the previous trade.
Both gold and silver were trading in green in the international market. Gold stood at USD 1,871 per ounce while silver quoted USD 29.88 per ounce.
Presenting the Budget 2021, the Finance Minister announced a cut in import duty on gold and silver. The step has been taken to help bring down prices of these metals in the domestic market and boost exports of gems and jewellery.
Sitharaman said that because the customs duty was raised from 10 per cent in July 2019, prices of metals have witnessed a sharp increase. Gold and silver presently attract a basic customs duty of 12.5 per cent. Therefore, to reduce the cost and bring the rates back to previous levels, the government has decided to rationalise customsduty on the metals. Now, the customs duty on gold and silver has been reduced to 7.5 per cent.
The Finance Minister also proposed Agriculture infrastructure and development cess at the rate of 2.5 per cent and social welfare surcharge of 10 per cent. After the inclusion of GST i.e. Goods and Services Tax, the total tax on gold and silver would be around 13.75 per cent, which was earlier at 15.50 per cent.
The decision was made to meet the industrial demand as theywere demanding a reduction in import duty on gold and GST to 7 per cent to curb the large-scale gold smuggling in the country, boost gold trade, as well as to strengthen demand for gold jewellery.