India Considers Cutting Duty Rates for Gold, Other Metals
India is considering a “sharp” cut in import duties on gold and a decrease in the Goods and Services Tax on other “precious metals,” according to a May 3 report from the India Brand Equity Foundation. The cuts would reduce import duties on gold from 10 percent to 4 percent, the report said, but it is unclear how much a proposed tax change would cut duties on other metals. India’s current GST for precious metals is 3percent, the report said.
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The changes are being reviewed by India’s Central Board of Indirect Taxes and Customs as a way to “plug ‘unofficial channels of import,’” according to the report. "At the end of the day, our revenue should not be hurt,” an Indian government official said, according to the report. “We are examining rationalisation of the GST rate and basic customs duty on gold.” The report referenced a 2018 government study that concluded it was important to keep the customs duty low. "A reduction in the customs duty in the past has been argued to support tax compliance, coupled with a significant reduction in the quantum of gold smuggled into India,” the study said, according to the report.