Govt hikes import duty on gold; prices to go up

Govt hikes import duty on gold; prices to go up New Delhi: The government Monday hiked the import duty on gold and platinum to 6 percent from 4 percent with immediate effect - a move aimed at curbing imports of the precious metals to check the widening current account deficit.

"Government has decided to increase import duty on gold and platinum from 4 percent to 6 percent with immediate effect," Department of Economic Affairs Secretary Arvind Mayaram told reporters.

He further said the government will link Gold Exchange Traded Fund (ETF) with gold deposit scheme, which will enable mutual funds to unlock their physical gold and invest in gold- linked schemes offered by banks.

"The changes proposed to the Gold deposit scheme will make it attractive for individuals to deposit their idle gold with the banks under the Gold deposit scheme," Mayaram said.

He said the changes would help moderate import of gold and help in bridging the current account deficit (CAD).

Gold imports in 2011-12 amounted to USD 56.5 billion and in the current financial year, till December, they are estimated at USD 38 billion.

PTI