Decision to cut "too high" import duty on gold will help contain smuggling, boost exports: CBIC

The decision to cut “too high” import duty on gold will help in containing smuggling and boost the country’s exports of gems and jewellery, CBIC Chairman Sanjay Kumar Malhotra said on Wednesday.

In the last financial year, seizures of gold made by Customs formation and the DRI together were around 4.8 tonnes, up from 3.5 tonnes in 2022-23.

The Budget has announced a drastic cut in import duty on the precious metal to 6 per cent from 15 per cent.

The Central Board of Indirect Taxes and Customs (CBIC) Chairman said that the duty was hiked in July 2022 as at that time there was a worsening current account deficit (CAD) due to the geo-political situation.

To cut down on the non-essential imports, the duty was increased.

CAD in 2022-23 was 2 per cent of GDP, which came down to 0.7 per cent in 2023-24. In the March quarter, it was a surplus.

“In that count the position is now better,” he said, adding that “15 per cent is too high a rate of duty on gold”.