India has raised the tax on precious metal coins and gold findings to 15% to manage the import bill and boost competitiveness in the jewelry export market.
Gold buyers in India currently face an 18% tax, covering basic customs duty, agriculture infrastructure cess, and GST, leading to a rise in illegal gold imports.
The recent budget also increased duty on silver bars, with basic customs duty up to 10% and Agriculture Infrastructure Development Cess increased to 5%.
The government incentivizes gold trade by waiving capital gains tax on converting physical gold into Electronic Gold Receipts and vice versa.
This move aims to promote the use of domestically available gold through recycling, contributing to India‘s jewelry industry, a major player in employment, trade, and foreign exchange earnings.
India, a significant global exporter of gold jewelry, holds a substantial share of the international market.
The tax hike on precious metals may positively impact gold prices amid global economic instability from ongoing geopolitical tensions.
The repercussions on the Indian jewelry industry and gold prices are yet to unfold, making it essential to monitor the outcomes of this tax adjustment.
