Increase in import duty on gold and silver and removal of certain entries in previous notifications prompted customs officials and the market to assume that duty would now have to be calculated on the basis of transaction value. This created confusion and several importers put their orders on hold.
However, instead of issuing any clarification on the confusion, late last evening another non-tariff notification was issued, in which the tariff value revised. Tariff revision usually comes around the 14th or 15th, and at the end or beginning of every month. Interestingly, the mid-month tariff revision notification mentioned gold and silver, but retained their tariff values as per the June 28 notification.
The notification issued yesterday makes it clear that duty calculation method remains the same. Import via official channels, however, will be limited due to low demand in July, a lean month. Prevailing high prices and duty will also stifle demand.
Standard Gold price had surged by Rs 811 to close at Rs 34,738 per 10 grams, from the previous day’s Rs 33,928 in Mumbai’s spot market. But the price fell again today, to Rs 34,096, which is quite near the pre-budget level, wiping out the effect of duty increase. The decline follows a correction in international prices of the metal.