HUBBALLI: Gold and silver prices are set to fall as the Finance Minister Nirmala Sitharaman announced a 5% cut in the import duty on the precious metals in the Union Budget for 2021-22 on Monday, February 1, 2021.
Sitharaman announced the reduction in the import duty from the existing 12.5% to 7.5%. However, she said that the government will levy a 2.5% agriculture infrastructure and development cess on gold imports.
Presently, gold customers have to pay a 12.5% import duty and a 3% GST. The total works out to 15.5%. Customers buying jewellery have to pay making (and wastage) charges over and above this.
The high taxation, coupled with a slowing economy, had spooked gold buyers. As a result, gold jewellery demand slumped to a record slow.
The budget announcement had an immediate effect: the prices of gold have fallen down. A gram of 22-carat gold is now retailing at Rs 4,550 at Malabar.
