In a bold move on 23rd July 2024, Finance Minister Nirmala Sitharaman has suggested a significant reduction in customs duties on gold and silver in the Union Budget 2024. The duties on both the precious metals might get slashed to 6%, while platinum might get a reduced duty of 6.4%.
Smt. Sitharaman quoted in her budget speech, “To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent.”
Jateen Trivedi (VP Research Analyst of Commodity and Currency at LKP Securities) noted that the BCD (Basic Customs Duty) on both the precious metals might get cut from 10% to 6%. With the 5% Agriculture Infrastructure and Development Cess (AIDC) remaining unchanged, the total import duty on these metals might decrease from 15% to 11%.
This reduction has already impacted the market, with gold prices dropping over ₹2000 to ₹70,350 on the MCX as the market adjusts to the new duty gap of around 4%. Despite this, the broader market remains unpredictable with Comex gold trading below USD 2415.
How Did The Cut In Customs Duty Impact Gold Prices?
The government slashing import taxes on gold and silver to a sleek 6% in the Union Budget has brought some exciting news for the domestic market. The precious yellow metal has become more affordable to import.
In a strategic move to increase retail demand and prevent smuggling in the world’s second-largest bullion consumer, India is now imposing a 6% basic customs duty cut. The market has responded with enthusiasm. Local MCX gold prices have dropped nearly 6% and hit ₹68,456 per 10 grams - the lowest in the last three months. This is a significant drop from the record high of ₹74,731 earlier this month.
Grab the Golden Opportunity and Buy Gold Digitally
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Disclaimer: The data provided on this blog is for general informational purposes only. It is based on our research and understanding, and we cannot guarantee its accuracy or reliability.