Govt slashes import tariff on gold, silver

The government has slashed the import tariff on gold to $408 per 10 gram from $424 and silver to $617 per kg from $650 per kg, in line with global rates of the precious metals, which could lead to some softening in the prices. Tariff value or the base price is set to determine the customs duty on the precious metal and to prevent under invoicing. The government revises import tariff value on a fortnightly basis taking into account the volatility in global metal prices. During the recent months, global gold prices have been declinilng as positive US economic data backed the latest Federal Reserve’s move to keep on reducing monetary stimulus which has dimmed the precious metal's appeal. Taking global cues, domestic gold rates in the national capital Delhi declined to 11-month low at Rs 27,400 per 10 grams. Gold is the second largest import item for India after crude oil. The government had taken various measures like high customs duty of 10% and 80/20 rule to curb gold shipments to check country’s widening current account deficit (CAD). Gold and silver imports fell by 40.02% to $33.46 billion in FY14 due to these stern Government’s norms. Low gold imports also helped India to contain current account deficit (CAD) at 1.7 percent of GDP or $32.4 billion in FY 14 as compared to $87.8 billion, or 4.7 percent of GDP in FY13.