Gold worth Rs. 1.34 crore seized at Mumbai airport

The gold was reportedly concealed in various items such as watch dial, pen refills, bra hooks, foils and handles of bag, coat hooks, shoe buckles and sandals.

Post By : IJ News Service On 02 January 2016 10:56 AM
This is the second time that the government has raised the import duty on the yellow metal in a desperate attempt to curb imports. In January, the government had raised the duty to 6 per cent from 4 per cent. %% The rise in import duty is likely to weigh on earnings outlook of these companies as well as margins, according to analysts. India is the world's biggest buyer of bullion and the government is seeking to halt a surge in demand. %% Jewellers and bullion traders say that nearly 200 -250 ton of gold may be smuggled into India this year following the Reserve Bank of India's moves to check the metal's shipments.%% Bachhraj Bamalwa, director of Nemichand Bamalwa, said, "Currently, smaller jewellers are paying a premium of Rs 500-600 per 10 gram for spot delivery of gold. Even then, gold is not available. This new set of rules will discourage banks to import gold and therefore there will be a shortage in the market. This will push up premiums." He added the import duty, the value-added tax and premiums for spot delivery would only lead to a rise in smuggling. Gold traders indicated that retail prices may go up because the landed cost of the metal will increase.%% "The increase was announced a day after the central bank acted to force domestic jewellers to buy only on a cash basis and is also expected to slash imports, which hit 162 tons in May, twice the monthly average of 2011 when they reached a record," quoted in a report. % The Indian rupee has been on a free-fall on record current account deficit, which touched a record high of 6.7 per cent of the GDP in the December quarter. Shares in jewellery companies such as Tara Jewels, Goenka Diamonds, TBZ slipped one to five per cent in morning trade after the government increased import duty on gold by a third to 8 percent to control current account deficit. %% The rupee hit the key psychological level of 57 to a dollar, to a near one-year low on the back of weakness in equity markets and continued dollar demand from oil importers. %% Haresh Soni, chairman, All India Gem and Jewellery Trade Federation, said the new restrictions will dampen gold demand. "There is uncertainty in the market due to these restrictions. Domestic jewellers will have to pay upfront to the bank which at times will become difficult for them. Moreover, they will have to place orders with the banks in advance. If a sudden demand emerges due to falling prices, jewellers will not be in a position to meet it instantly. They will have to wait till banks provide the metal."%% The Maharashtra Government has decided to raise the value-added tax on gold, silver and diamond jewellery. Besides, it has also slapped a four percentage point hike in equipment to manufacture jewellery.

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