Hyderabad: The jewellery traders have reacted negatively to finance minister Nirmala Sitharaman's Budget proposal to increase the customs duty on gold.
The government has revised the import duty on gold and expensive metals to 12.5 per cent from the existing 10 per cent and this will shoot up the prices of gold in the local market.
Mr Satish Agarwal, secretary of Gems and Jewellers Association, Hyderabad, called this an unfavourable move and said, “The increase in customs duty will tempt people to indulge in more smuggling. There is an organised network of gold smugglers who operate from Dubai, Nepal and Sri Lanka which gives a reward of around `4.5 lakh to the smuggler for 1 kg of gold. The government will lose forex, customs duty and international buyers because of this move. The jewellers’ lobby has been asking government to reduce the duty to 5 per cent as this will motivate people to invest more in gold.”
Local small-scale jewellers and gold investors were seen celebrating the move. Mr Mahaveer Saraf, a gold trader, said, “Most of the gold purchased is for investment and this move is going to benefit all those buyers who have been investing in gold. Gold is in our culture and no matter what the prices will be, people will buy it.” Prices went up by `540 and gold was trading at `34,800 per 10 grams on Friday.
