Kathmandu, November 10
The government has raised the customs duty on imported gold and silver citing it as necessary to prevent possible smuggling of the precious metals from Nepal to India and vice-versa.
With gold price rising in recent months, the government move is certain to make the yellow metal dearer in the domestic market.
A recent Cabinet meeting on the recommendation of the Ministry of Finance raised customs duty on import of raw gold to Rs 7,500 per 10 grams for up to 50 grams and to Rs 8,500 per 10 grams for imports of above 50 grams and up to 100 grams. As per the prevailing law, individuals could bring up to 100 grams of raw gold while returning from abroad. Previously, the government was levying customs duty of Rs 6,200 per 10 grams for up to 50 grams and Rs 7,200 per 10 grams on additional 50 grams of the imported raw gold.
In case of gold jewellery, the government has raised customs duty to Rs 8,500 per 10 grams for up to 50 grams from Rs 7,200 and to Rs 10,000 per 10 grams for additional import of up to 100 grams from Rs 9,000.
Customs duty on silver has also been raised — to Rs 75 per 10 grams from Rs 56 per 10 grams.
The Department of Customs has stated that reviewing the customs duty of such precious metals in line with their price in the Indian market is necessary to control possible smuggling of these metals between the two nations.
“Customs duty on gold and silver has been raised to match the market price of these metals in both Nepal and India. Gap in prices of bullion in the two markets has been promoting smuggling as the two nations share an open border,” said Sishir Ghimire, information officer at DoC.
The decision to raise customs duty on gold is also backed by unusual rise in transaction of gold during Dashain and Tihar though the business of gold jewellery remained tepid during Teej this year.
India levies 13 per cent import duty on gold on the value of gold submitted at the customs while Nepal imposes customs duty based on volume. As of today, fine gold costs Rs 60,870 per tola in Nepal and INR 38,250 (Rs 61,200) per tola in the Indian market.
However, jewellers said rise in customs duty of the precious metals would not only further raise the price of gold and silver in the domestic market but also hit hard the jewellery business as the jewellery market had already been hit by a rise in global gold price.
“Instead of increasing customs duty, the government should have used other ways to control smuggling of the precious metals,” said Mani Ratna Shakya, former president of the Federation of
Nepal Gold and Silver Dealers’ Association.
A version of this article appears in print on November 11, 2019 of The Himalayan Times.