Finance Minister Nirmala Sitharaman announced a substantial reduction in the customs duty on gold and silver while pressenting the Budget on Tuesday. This cut has led to a sharp decline in prices, benefiting consumers and boosting demand in the market. The Finance Minister has reduced the import duty on gold and silver from 15% to 6%. This includes a decrease in the Basic Customs Duty (BCD) from 10% to 5% and the Agricultural Infrastructure Development Cess (AIDC) from 5% to 1%.Moreover, experts believe the impact will lower the price of gold and silver.
Henceforth. Hareesh V, Head of Commodities, Geojit Financial Services, says, "Customs duty on gold and silver has been reduced to 6% which may lead to a decline in domestic prices and perhaps lift demand. The existing duty on gold and silver is 15% which comprises 10% of basic customs duty and 5% as Agricultural Infrastructure Development cess."Gold prices on the MCX hovered at Rs 72,838 per 10 grams on Tuesday, hitting an intraday low of Rs 68,500. In the international market, prices maintained a similar trend, hovering around $2397.13 per ounce.
This indicates a certain level of stability in the gold market. In the silver market, the price on the MCX hovered at Rs 88,995 per kg and hit an intraday low of Rs 84,275.Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said, "In the Budget, the Finance Minister announced a reduction on Basic Custom Duty on gold and silver from 10% to 6%. Adding 5% AIDC, which remains unchanged, the total import duty on gold and silver is reduced from 15% to 11% now. As a result, the price of gold reacted lower in MCX by more than Rs 4000 to Rs 68,500, and silver by Rs 2500 to Rs 84,275 as the market prices in the lower import duty gap of 4%. The broad view remains volatile and weak as Comex gold stays below $2415."