Gold import duty raised from 7.5% to 12.5% in India
The rate hike acts as a reversal to the original rates
Here are the details
Gold imports attract duty and GST
Originally, the duty was 12.5%
It had been reduced to 7.5% in last year's Union Budget
What has happened?
In a strange turn of events, import duty is back to 12.5%
This is an attempt to cut demand amid a depreciating rupee
This will lead to an increase in gold prices in India
As mentioned, gold price is expected to shoot up over next few days
Demand for gold during festive season could be low
Reportedly, this might lead to spike in illegal imports due to arbitrage
Market in numbers
India imported 1,678 tonnes of gold in 2021
The value of imports were almost $35 billion last year
Total tax burden: 12.5% duty + 2.5% agri cess + 0.75% SW surcharge + 3% GST
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