In a bid to contain the widening current account deficit and soaring inflation, the government today raised the tariff value of gold to discourage its imports.
Despite Finance Minister P Chidambaram virtually ruling out hike in import duty on the yellow metal, the tariff value of gold has been raised to USD 521 per ten gms from USD 516 per ten gms.
Tariff value is the base price on which customs duty is determined.
Given the turmoil in global economy, gold has always been seen as a safe haven and a hedge against soaring inflation. In January, import tax on gold was raised to 6 percent to curb purchases. However, according to market experts this move did not yield expected results.
However, the tariff value for silver has been lowered to USD 920 per kg from USD 930 a kg. Meanwhile, Chidambaram indicated to Reuters in Tokyo that the government is unlikely to raise the import duty on gold to make it dearer.
"We did raise tariffs from four per cent to six per cent. But there are limits to which tariffs can be raised on gold because if you raise tariff prohibitively gold smuggling will increase," he told the agency.
At present gold prices are ruling at USD 1,597.90 per ounce in Singapore, while silver stood at USD 27.92 per ounce. Gold was quoted at Rs 30,100 per ten gms, while silver was quoted at Rs 53,200 per kg in Delhi.
High gold import has been one of the main factors responsible for the shooting up of the Current Account Deficit (CAD), which soared to a record 6.7 per cent of the GDP for the quarter ending December.
Tariff value is the base price on which customs duty is determined.
Given the turmoil in global economy, gold has always been seen as a safe haven and a hedge against soaring inflation. In January, import tax on gold was raised to 6 percent to curb purchases. However, according to market experts this move did not yield expected results.
However, the tariff value for silver has been lowered to USD 920 per kg from USD 930 a kg. Meanwhile, Chidambaram indicated to Reuters in Tokyo that the government is unlikely to raise the import duty on gold to make it dearer.
"We did raise tariffs from four per cent to six per cent. But there are limits to which tariffs can be raised on gold because if you raise tariff prohibitively gold smuggling will increase," he told the agency.
At present gold prices are ruling at USD 1,597.90 per ounce in Singapore, while silver stood at USD 27.92 per ounce. Gold was quoted at Rs 30,100 per ten gms, while silver was quoted at Rs 53,200 per kg in Delhi.
High gold import has been one of the main factors responsible for the shooting up of the Current Account Deficit (CAD), which soared to a record 6.7 per cent of the GDP for the quarter ending December.
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