Customs duty on gold import to go up
KATHMANDU: The government, to control the rampant import of gold in the domestic market and avoid shortage of dollars, is planning to increase customs charge on gold import.
Currently, gold importers are being charged Rs 130 per 10 gram of imported gold. According to Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association (NEGOSIDA), the government intends to increase the customs charge to prevent bulk import of gold and control the market. "To bring market effectiveness and control gold import, the government is taking the step," said Shakya adding that until then importers will be allowed to import gold through hand carry system.
As there is restriction on gold import through direct medium, importers here under mutual understanding with the government are currently allowed to import small quantity of gold by hand carry system. After a month of restriction on gold import, some small firms and companies with government permission are importing gold through hand carry. The government has restricted gold import since January 15. Till date, eight importers have imported about 131 kg of gold. On February 9, the total gold import through hand carry was 45 kg. On February 10, it was 60 kg and on February 12 it was 56 kg.
Gold can be imported either through general LC, TT Draft, Bank Guarantee or hand carry process but since there are some restrictions some small firms and some companies are importing gold through hand carry, a less hazardous and expensive process. Maximum quantity of gold is imported from Dubai while some of it also comes from Honkong and Australia, Shakya informed. On a mutual understanding basis, a maximum of 10-25 kg of gold can be imported through hand carry system. Meanwhile, there was total import of 12,635 kg of gold till mid-January.
Gold is being traded for Rs 32,100 per tola, said Shakya. Due to the scarcity of gold and expensive import process, gold dealers have been re compelled to hike the price of gold. After government restrictions on import of gold, transaction has plunged to 50 per cent of the total demand in the market. Nepal Rastra Bank (NRB) has introduced new measures for importing gold in Nepal. NRB has introduced the provision of 40 per cent guarantee on import of gold. As per the new regulation, an importer of gold must deposit 40 per cent cash for getting the standby letter of credit (LC) from Friday onwards. Banks can open LCs after depositing 40 per cent of the total LC amount.
The decision was taken to reduce the import of gold so that the nation will not have to face shortage of dollars.
Around 10 tonnes of gold was imported during the first five months of the present fiscal year -- mid July to mid December. Earlier, it used to be six tonnes annually, according to NEGOSIDA. Last year, the total gold import in Nepal was worth Rs 35 billion.
According to the central bank's data, gold worth Rs 60 billion is likely to be imported this year. Nepali financial institutions have already imported gold worth Rs 15 billion in the first quarter of the fiscal year 2009-10.
KATHMANDU: To provide relief to gold traders and keep the domestic market price abreast of the international gold price, Nepal Gold and Silver Dealers’ Association (NEGOSIDA will introduce a dual pricing system soon. NEGOSIDA preident Tej Ratna Shakya said, "By mid-March the association will launch a new system of gold pricing twice a day according to the international market price." He added that the new system of pricing will be done according to the international price at 2:00 pm local time. "We are trying for scientific pricing of gold, this is due to fluctuating gold price in the international market," said Shakya. The price will be adjusted in the daytime if there is a $10 fluctuation in international price