Import duty on gold, platinum hiked to 6% in India as govt battles imports, CAD
Simultaneously, the government also raised the duty on platinum by a similar percentage from 4 to 6, Economic Affairs Secretary Arvind Mayaram told reporters here as government appealed to the people to moderate their demand for gold.
Shortly after news of the duty hike, gold prices shot up by Rs 315 to Rs 31,250 per 10 grams and markets sources say it may go up to Rs 700 per 10 grams in the short term.
For the second time in a year, the import duty on gold has been hiked to check the spiralling trend of gold imports leading to a record current account deficit that has a cascading effect on various economic fronts including distorting the balance of trade.
Finance Minister P Chidambaram had on January 2 indicated the coming hike in duty when he said the government would be left with no choice but to make import of gold a little more expensive.
In a bid to channelise gold holdings into institutional channels, Government also proposed providing a link between Gold Exchange Traded Fund and Gold Deposit Scheme.
The objective is to unfreeze or release a part of the gold physically held by mutual funds under Gold ETFs and enable them to deposit the metal with the bank under GDS.
The government had in the Union Budget for 2012-13 raised import
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