Steep Hike in Gold Prices?
AN increase in Customs duty on Gold in India is big news in many countries. The Khaljeet Times reported, "India, the world's biggest bullion consumer, sharply hiked import duties on gold and silver on Tuesday in a move that will raise domestic prices of the precious metals".
What is the hike? Let us do a rough calculation about a passenger who brings with him a kg of gold and a kg of silver. (All values in Rupees)
Description | Value in India | Duty payable before | Tariff value NOW | Duty payable NOW | Difference | |
1 | 1 kg of gold | 28,00,000 | 30,000 | 26,30,000 | 52,600 | 22,600 |
2 | 1 kg of Silver | 53,000 | 1,500 | 47,650 | 2,859 | 1,359 |
TOTAL | 28,53,000 | 31,500 | 26,77,650 | 55459 | 23,959 |
Thus, a passenger coming with gold and silver worth about Rs. 29 lakhs will have to pay an excess duty of Rs. 24,000. Less than 1 percent.
But the problem is - rich educated Indians coming from foreign countries are not prepared to pay this customs duty. They would haggle, fight, persuade, beg or bribe Customs officers to let them go without that duty and would rather smuggle that gold out than pay duty!