NEW DELHI, JULY 13:
If the Finance Ministry’s import and import duty collections data for the first three-months are an indicator, then gold appears to be losing its shine. The provisional data of the tax authorities showed a decline of around 8 per cent, and a 15 per cent decline in value terms.
Interestingly, the Commerce Ministry data for the first two months show a surge in imports.
According to the tax authorities’ data, gold import during April-June quarter stood at 203 tonne against 221 tonne during the corresponding period of the last fiscal. Value of imported gold was recorded at around ₹46,000 crore, much lower than ₹54,800 crore of last fiscal.
“Lower quantity combined with depreciating price resulted in lower duty collection,” a senior Tax Department official told BusinessLine.
He said that a little over ₹3,300 crore was collected as import duty on gold as against around ₹4,900 crore in the corresponding period of the last fiscal.
Gold attracts import duty at the rate of 10 per cent and is one of the major contributors in total custom duty collection.
The overall custom duty collection grew by 20 per cent during April-June period of the current fiscal.
Gold prices in the international market came down from $1300/ounce in July last year to $1200/ounce in the beginning of 2015 and now it is hovering around $1150-1160. In fact price has seen an over 11 per cent decline over a year.
At the same time, industrial demand for gold has also been subdued contributing to lower gold import.
In fact, trade data from the Commerce Ministry shows that export of gold and other precious metal registered a decline of around 15 per cent during the April-May period. However, the data also showed that gold import during the first two months (April-May) of the current fiscal grew by around 50 per cent in rupee terms.
Data for June and for the first three months are expected this week. Still, unless there is a big slump in June, the Finance Ministry data will match with the Commerce Ministry’s data.
Rise in smuggling
Though there is decline in the legal import (as Finance Ministry data shows), gold smuggling is still increasing.
Another Finance Ministry official said that the sea route from Sri Lanka to Tamil Nadu is being used to smuggle gold into the country.
It is believed that gold smuggling is almost one-fifth of the legal import.
The World Gold Council estimated that around 175 tonne of gold was smuggled into the country during 2014 while legal import was around 850 tonne.
[“source – thehindubusinessline.com”]