Union Budget 2010 Impact on metal sector

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While the costs of precious metals continue to mount, the Finance minister in his Budget 2010 speech proposed various index rates for gold, platinum and silver. He also recommended few steps that are expected to leave immense impact on metal sector of India and trigger its production.

Union Budget 2010 Impact on metal sector

While gold and platinum prices have been increased from ` 200 to ` 300 on every gram by the FM, the silver price has also been hiked from ` 1, 000 to ` 1, 500 on every kg.

In the Gems and jewelry sector, the basic customs tariff on Rhodium – a valuable metal has been reduce by 2% and will currently be charged at 10%. To trigger in-house refining capacity for gold, the FM reduced basic custom tariff on gold ore and laid more emphasis to specific duty rather than the 2% ad valorem. The specific tariff will be charged at ` 140 on every 10 grams of gold with full tax exclusion from exclusive extra tariff.

In addition, the excise tariff on concentrated gold is reduced to ` 280 on every 10 grams of gold content.

Union Budget 2010 feedbacks from gems & jewelry sector of India

Following the proposals announced by the FM, Gems and Jewellery Exports Promotion Council expressed their anguish over the hike in customs tariff. Previously, custom tariff of ` 200 was charged on gold when the cost of the metal was ` 12,000 on every gram and now as per new proposals the dury has been increased to ` 300 with a cost of ` 17,000 on every 10 grams. However the percentage has not been touched.

At the time when the industry was gearing up to emerge from the downturn, the Budget announcement arrived as a bolt from the blue. The sector expected a 2 year tax exemption to recover from the crisis which it had suffered during the recession.

Last updated on : 15-05-2011

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