26 Feb 2010
MUMBAI: Get ready to pay more for gold and silver as the union budget has propsed a 50% hike in custom duty on precious metals. The budget speech
has proposed a hike in custom duty of Rs 300 per one gram on gold from the current Rs 200. It has also proposed to hike the customs duty on silver from the current Rs 1000 to Rs 1500 per kg.
"Increase in custom duty will be definitely passed on to customers and so they have to be ready to pay more for the precious metals. However, reduction in raw material tax will push up refinery production, leading to greater circulation of used gold and decline in gold imports," said Prithviraj Kothari, Director, Mumbai-based bullion company Riddhi Sidhi Bullions.
Though the prices are likely to go up, it is unlikelly to crimp demand as consumers have witnessed peak prices in the recent quarters. Gold prices zoomed to as high Rs 18,700 per 10 gm during the November-December quarter. Its now hovering aoround in the range of Rs 16,500-16700 per 10 gm.
"Import prices on gold and silver will go up. However, this will not affect the demand, since people have seen much higher level for precious metals," said Praveen Singh, senior bullion analyst.ET