The government has announced an increase in import duties for gold and silver findings, as well as coins made of precious metals. The new duty rate is 15%, which includes a Basic Customs Duty (BCD) of 10% and an Agriculture Infrastructure and Development Cess (AIDC) of 5%. However, this increase does not apply to the Social Welfare Surcharge (SWS) exemption.
Findings are items like hooks, clips, which are components of jewellery making. The government has also raised the import duty for spent catalysts that contain precious metals. The new duty rate is 14.35%, which comprises a 10% Basic Customs Duty (BCD) and an additional 4.35% under the All Industry Duty Drawback (AIDC). Similar to the previous case, there is an exemption from the Social Welfare Surcharge (SWS).
The changes, effective from January 22, 2024, aim to regulate imports and support the domestic economy. The government had increased the import duty on silver dore, bars and articles during the budget 2023, to align them with that on gold and platinum. The basic customs duty on silver was raised to 10% from 7.5% and Agriculture Infrastructure and Development Cess (AIDC) on imports to 5% from 2.5% and on Silver dore it was increased to 10% basic import duty and 4.35% AIDC. The import duty on articles made of precious metals was increased to 25% from 22%. There was no change in import duties on gold.
The increase in import duties is expected to have an impact on the domestic jewellery industry, which relies heavily on imported gold and silver. According to industry experts, the hike will make gold and silver coins more expensive for consumers and may affect the demand for these products. However, some also believe that the move will encourage more recycling of precious metals and reduce the dependence on imports.