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Gold Import Duty: The Ministry of Commerce of India is considering a plan to reduce the tax on gold imports. Through this, efforts will be made to stop illegal smuggling of gold. A person associated with this matter has given information about this. In fact, a recommendation has been made to the Finance Ministry to reduce the duty on gold imports from 12.5 percent to 10 percent, and two people have informed about this on condition of anonymity. Due to high duty on gold import, cases of illegal import of gold and smuggling of gold are increasing.
When will it be announced?
According to a Bloomberg report, no decision has been taken on whether this decision will be announced during the budget or it will be announced before the budget. However, the spokesperson of the Ministry of Finance and the representative of the Ministry of Commerce have not yet given any answer to the questions related to this.
What is the challenge before the Finance Minister?
India is the second largest gold consuming country in the world and most of it is bought from abroad, so there is a dilemma in front of Finance Minister Nirmala Sitharaman to take this decision on gold import. In fact, the challenge before the Finance Minister is that on the one hand, he has to curb the imports so that he can reduce the rising figures of trade deficit. On the other hand, there is also the matter of increasing smuggling of gold in front of them, which is reducing the much needed revenue of the government.
gold purchases decreased after import duty increased
The Finance Ministry had increased the duty on gold imports in July, after which there has been a big decline in the purchase of gold in the country. At the same time, the cases of smuggling of gold are increasing. According to the World Gold Council, in the July-September quarter, gold imports fell by 23 per cent as compared to the same quarter last year, and a major reason for this is the increased duty on gold imports.
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Know the expert’s opinion on gold
Ravindra Rao, VP-Head Commodity, Kotak Securities Limited, says that gold prices have risen slightly from yesterday’s $ 1778 an ounce, but it has not seen the same speed as last week. Gold has lost a bit of momentum as the dollar is rising and bond yields are also improving. The US dollar has bounced back from a 5-month low as data on factory output showed a bull run there and services PMI also showed improvement.
In such a situation, the way is more open for the Federal Reserve to increase interest rates, which is not good for non-bond yielding segments like bullion. On the other hand, in terms of prices, Comax Gold is unable to sustain above 252 DMA and it is facing resistance above $1804. And now the next stop will be seen at the rate of $1825. Therefore, we are of the view that gold will trade in a rangebound range and will trade in the range of $1773-1820.
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