New Delhi: The Union government has reduced the gold duty drawback rate. The duty drawback rate is an amount aimed to reimburse exporters for the customs duties paid for imported inputs. It is intended to ensure that goods meant for exports are not impacted by domestic taxes. These rates are adjusted according to import duties on gold and silver as mentioned in the budget.
According to the new notification, for gold jewellery, the duty drawback rate has been reduced from Rs 704.1 per gram of net gold content (with a purity of .995 or more) to Rs335.50 per gram. The rate for silver jewellery and other silver items has been cut from Rs 8,949 per kilogram (.999 purity) to Rs 4,468.10 per kilogram.
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Finance Minister Nirmala Sitharaman in Budget 2024 on July 23, proposed to cut custom duty on gold and silver to 6%. She further cut down custom duty on platinum to 6.4%. However, during the Budget 2024 presentation, no changes were introduced to the gold duty drawback rate. This have resulted in gold and silver importers to get in the raw materials at a lower price and eventually get a higher drawback duty on exports. The revised duty drawback will fix this issue.
Meanwhile, gold imports rose to $48.8 billion in FY 2024 from $33.6 billion in FY 2019, an increase of 45.2%. India’s gold exports have also rose from $6.59 billion in FY 2021 to $10.99 billion in FY 2022, $12.29 billion in FY 2023, and $13.24 billion in FY 2024.
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