- Import duty increased from the current 10% to 12.5%
- India is the second biggest consumer of gold after China
- India imports almost all of its gold
Customs duty on gold and other precious metals were raised for the first time in six years today as Finance Minister Nirmala Sitharaman announced an increase in import duty from the current 10 per cent to 12.5 per cent while presenting her first Budget. India is the second biggest consumer of gold after China.
Gold prices shot up by Rs 590 to Rs 34,800 per 10 gram in Delhi after the Finance Minister's announcement. Meanwhile, shares of jewellery makers such as Titan and PC Jeweller fell by as much as five per cent, news agency Reuters reported.
"The increase of custom duty has led to rise in gold prices and it will have no impact on consumption of gold," news agency PTI quoted Surendra Jain, Vice President of All India Sarafa Association, as saying.
Globally, gold was trading steady at USD 1,413 an ounce in New York.
In 2013, the customs duty on gold was raised thrice, Bloomberg has reported. India imports almost all of its gold.
The Finance Minister also announced that the special additional excise duty and road cess on petrol and diesel are being raised by Re 1 per litre each.
Custom duty has also been hiked on products like CCTV camera, digital and video recorder, auto spare parts and synthetic rubber.
An excise duty of Rs 5 per 1,000 has also been imposed on cigarettes of length exceeding 65 mm, while 0.5 per cent duty has been levied on chewing tobacco, zarda and tobacco extracts and essence.
With inputs from agencies