Duty on gold import hiked

KATHMANDU; The cabinet today decided to increase customs duty on gold by Rs 340 per 10 gram. In the wake of the decision to raise customs duty on gold from Rs 130 per 10 gram to Rs 470 per 10 gram, gold traders here expressed satisfaction at the cabinet decision even the new hike was Rs 10 less than what had been suggested by the traders.

“The customs duty on gold has been raised so as to control excessive gold import and dollar deficit in the country,” said Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank (NRB). After a hike of Rs 480 per 10 gram by the Indian budget, gold traders here had been insisting on import duty equal to India’s customs as the price of gold in the Indian market became Rs 350 more than in Nepal, which could cause gold smuggling due to open border and dollar flight.

According to Manandhar, with Indian customs rate of Rs 480 per 10 gram and Nepal’s Rs 130 per 10 gram may have caused an alarming situation as it could have given rise to black marketing. he said that now that the new customs rate of the two countries are more or less similar, it will definitely curb excessive gold import and smuggling too. He added that now the trading price of gold might increase but it will be according to the international market price only.

However, Tej Ratna Shakya, president of Nepal Gold and Silver Dealers’ Association (NEGOSIDA), said that along with the decision for price adjustment of gold with the Indian customs duty, the government should also increase the inflow of Indian currency (IC).

“ There must be a balance between IC and US dollar as shortage of IC can create black marketing which in turn would lead to hike in the price of gold and also different items,” said Shakya adding that there is a need for currency circulation as there is interrelation between gold and IC.

Talking about the procedure to be opted for the import of gold now onwards, Shakya said that the association has urged the government to allow gold import through hand carry process so that there won’t be excessive import as one can only import 20-25 kilos of gold per day through hand carry. “Now the gold import process and the domestic market trading will be more systematic,” said Shakya.

According to NEGOSIDA, the gold market on Sunday opened at Rs 27,695 per 10 gram while silver opened at Rs 424.50 per 10 gram. The international trading price of gold on Sunday was $1,101.10 per ounce which closed at $1,113 per ounce on Friday.