New Delhi: Giving a kick to the sale of Gold and Silver, finance minister Nirmala Sitharaman in her Union Budget 2021 speech announced to reduce customs duty on aforementioned precious metals. Notably, custom duty on gold has been reduced to 7.5 per cent.
Sitharaman said, “Gold and silver presently attract a basic customs duty of 12.5%. Since the duty was raised from 10% in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalising customs duty on gold and silver.”
To note, the increase in prices of the precious metals was brought as high customs duty on gold helps the government in reducing gold imports, which is good as it keeps trade deficit under check.
The move to cut down the custom duty was expected to be introduced in FY21 Budget as many surveys indicated that gold emerged as a “safe-haven investment” in the backdrop of the pandemic-induced economic uncertainties, with prices increasing by 26.2% in November 2020 as compared to December 2019.
“From January 2020 onwards, gold prices have sharply increased with the sharp rise in the GEPU [Global Economic Policy Uncertainty]. In fact, compared to other assets, gold had returns during the year that were considerably higher,” a survey suggested.