Import duty on gold, medical equipments and set up boxes may come down in interim budget

Mumbai  February 5, 2014: Gold importers may get some relief soon as the government proposes to announce a cut in import duties in its ensuing vote on account session. 

Similarly, the import duty on set up boxes for direct to home (DTH) services is also expected to come down.  Besides, the government proposes to bring many life saving drugs and medical equipments and prosthetics in its zero import duty net. 

According to sources, the government may not wait till end of the financial year as the current account deficit has improved. Besides, the worrisome factor is that various filed formation in customs are reporting rampant gold smuggling. Currently the import duty on gold is ruling around 15% after three tranches of hikes last year.

Similarly, the other item that may see duty cut is set up boxes where the government had increased the import duty from five% to 10%.  However the industry lamented it to be a burden owing to the target of complete digitalisation of home cables by 2014.    With almost, 100%  of the set top boxes being imported, this affected  not only the operators but also the consumers as the cost rise was passed  on to them, eventually Official sources added that there are many life saving drugs under the zero tax net currently. However there are many life saving medical equipments especially prosthetics (medical aids for disabled persons) which attract duty. The zero import duty net may be enlarged by including such items, said a source.

Meanwhile, the government recently slashed the import tariff value on gold and silver to $404 per ten grams and $635 per kg, respectively, taking into account the volatility in the global prices.

Import tariff value is the base price at which customs duty is determined to prevent under-invoicing. The tariff value is revised on a fortnightly basis after analysing the global price trend. 

Gold is the second largest import item for India after petroleum. However, gold imports are expected to decline this year as government has taken several measures to curb shipments to address the high current account deficit. According to the jewellers’ body, total gold imports may decline to below 500 tonnes this fiscal due to these restrictions, from 845 tonnes in the last fiscal reportedly.

Courtesy: The Business Standard