Govt may come up with new gold and silver tax rate

The Indian government is contemplating a revision in the tax rates for gold and silver following the failure of existing import duties to curb the volume of imports, according to Rajesh Rokde, Chairman of the Gems & Jewellery Council. Rokde noted that the current duty structure is not proving effective, as it has inadvertently facilitated illegal trade, which has been exacerbated rather than mitigated.

The government initially raised customs duties on gold and silver to 15% from 6% in May, aiming to mitigate the strain on foreign exchange reserves amid geopolitical tensions. However, despite the increased rates, imports have remained largely unchanged, while the grey market for these commodities has expanded significantly. Rokde indicated that the government may yet reconsider this policy, as anticipated higher drops in imports have not materialized.

Rokde confirmed that the decision-making process has been ongoing within the government, though no definitive action has been taken yet. He suggested that the government is waiting for the opportune moment to implement the necessary changes to the tax rates on gold and silver.