Import Duty On Gold: How To Save Money On New Gold Jewellery As Yellow Metal Gets Costly?

Gold Rate in India: The gold rate in India again rose to over Rs 53,000 after the government announced a hike in the import duty on the yellow metal. Thinking of getting new gold jewellery? Read on

Import Duty on Gold in India | New Delhi: The government of India announced a hike in the import duty on gold to 15 per cent from 10.75 per cent on June 30, 2022. The change has been made with immediate effect. With this, the gold jewellery is all set to get costly. It is disheartening news for Indians as they are one of the biggest buyers of gold in the world. The gold rate hike is further expected to put more pressure on customers’ pockets which have been reeling under the high inflation.

Gold rates in India have remained elevated since the start of the Covid-19 pandemic. In August 2020, it touched a high of as much as Rs 56,000, according to MCX. Currently, it is hovering around Rs 53,000 per 10 grams. The demand for metal rises in difficult times as it is considered to be a safe investment.

The latest hike has taken India a step back. In Budget 2021, the government cut the customs duty from 12.5 per cent to 7.5 per cent. With the latest hike, the import duty on gold is back to square one.

Why was the import duty on gold hiked?

The gold imports in India have been rising for the past few months. In May, India imported 107 tonnes of gold. In June too, the imports have been significant. This puts pressure on the current account deficit (CAD) of the government. As India imports, most of the gold, the rise in imports leads to erosion of the current account surplus. To contain this, the government has hiked the taxes again.

How to protect yourself from import duty hikes?

• The simplest method to save some money in these times is to stop purchasing gold altogether.
• Other alternatives like ETFs and Gold Bonds can be purchased. But, physical gold should not be bought for a while.
• Also, for jewellery, one can get the older ornaments redesigned.
• Or, if one has gold bricks/biscuits, they can be converted to new jewellery.