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Jewellery traders have reacted to the Centre's decision to raise customs duty on gold and silver from 6 per cent to 15 per cent, saying the move has sharply increased prices and may affect business in the bullion trade.
Kailash Mittal, President, Jaipur Bullion Traders Committee, told ANI that gold and silver prices rose by around 10 per cent after the duty revision, adding that market activity was already weak before the increase. "The central government suddenly announced at night that customs duty on both gold and silver had been increased from 6 per cent to 15 per cent. As a result, gold prices surged by 10 per cent and silver prices also rose by 10 per cent at the same time," he said. He said trade had already fallen by nearly 50 per cent and estimated that another 25 per cent of business could decline, particularly after the wedding season. Mittal said the government could consider bringing gold already lying with the public into formal circulation. "India already has a huge amount of undeclared gold lying with the public. If the government brings a scheme for that gold, then the country's gold can be utilized within the country itself," he said. He also suggested that banks could purchase such gold under a scheme. "The government should introduce a scheme under which banks purchase that gold without questioning its source, and a nominal tax could be imposed to convert it into white income," he said. RC Mittal, Bullion Trader, said the increase may add pressure on ordinary buyers. "The government has increased the duty on gold imports from 6 per cent to 15 per cent to discourage buying gold from foreign countries," he said. He said while purchases linked to investment may reduce, family-related purchases such as weddings would continue. Another trader said the increase in duty would have a wider effect on the jewellery sector and related work. "Our industry is a very big industry. There are crores of people involved in this. There is a lot of co-related work, like boxes, displays. It is a very big negative point for the industry," he said. He added, "Customers have definitely stopped buying. If they want 10 grams, they will hardly be able to take 5-6 grams. This is definitely going to be a big shock to the industry." The reaction came after the Centre revised customs duty on precious metals like gold, platinum and silver, citing the need to conserve foreign exchange and protect the economy from growing global pressures stemming from the ongoing West Asia crisis. Import duty on gold and silver has been raised from 6 per cent to 15 per cent, while platinum will now attract a duty of 15.4 per cent, up from 6.4 per cent. The changes also apply to related items such as gold and silver dore and coins. (ANI)
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