India imposes gold sales tax on top of record import duty


By Rejendra Jadhav
Tuesday, March 1, 2016

MUMBAI -- India has reintroduced a local sales tax on gold jewellery after a gap of four years, on top of record import duty, in a move officials hope will dampen demand for the precious metal in the world's second biggest consumer.

Successive governments in Asia's third largest economy have struggled to curb Indian appetite for gold despite the imposition of a 10 percent import duty in 2013 and other restrictions introduced from time to time.

Annual imports of up to 1,000 tonnes of gold, accounting for about a quarter of India's trade deficit, have also prompted the government to launch a scheme to mobilise a pool of more than 20,000 tonnes of the metal lying idle in homes and temples.

Finance Minister Arun Jaitley, presenting his third budget on Monday, announced an excise duty of 1 percent on gold and diamond jewellery. A report from his ministry on Friday said gold was under-taxed in the country, where the richest 20 percent account for roughly 80 percent of gold purchases. ...

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